As we get near the last quarter of 2014, I am starting to get a bit less comfortable with the idea that we won’t have any airline status going into next year. I am trying to do the right thing and quantify the decision as to whether we go out of our way to run for status, so what I aim to do here is lay out the cost-benefit analysis that I’ve drawn up for myself and our own travel needs so that you might do the same when faced with a similar decision. This analysis is geared toward bottom tier status, but is absolutely useful when considering going from one level to the next – simply modify the benefits section to account for the incremental differences.
For the past few years, we as a family have enjoyed US Airways Dividend Miles Silver status – including my daughter once she started flying toward the end of 2012. We have enjoyed a pretty significant upgrade rate, somewhere in the neighborhood of 75%, on short haul flights when visiting our family and friends in Philly and DC. We’ve even scored a couple of transcontinental upgrades when choosing off-peak flight times to Phoenix and San Diego. There’s also been the free baggage that has provided plenty of value, now that we have a little one and can’t avoid checked bags.
More recently, we matched with Alaska Airlines at the MVP tier. At the bottom tier, this program offers all of the above plus the ability to credit Delta and American flights for elite qualification, plus a host of other partners if you’re into paying cash for your international flights. The drawback is that routes on Alaska metal, which provide a 5000 mile “discount” for requalification, are thin out of Boston, but still perfectly doable, or so we thought 9 months ago.
We’re impossibly short on miles to requalify with US Airways, and I am perfectly okay with that – consolidation and higher loads have really made their fares less competitive out of PWM and BOS, so I find myself burning Avios or not flying them at all. On the other hand, I am struggling with whether it really makes sense to push for Alaska again, or if I’d come out ahead next year just buying what I want. If you asked me two years ago whether I’d give up my US status, I’d have said no way, but now I’m perfectly willing to let it go. Does status still provide net value for me?
The Cost of Alaska Airlines MVP Status
I’ve previously written about Alaska Airlines Mileage Plan and I’m still in the camp that this is the best domestic frequent flyer program, whether an elite or not. Going forward, the plan is still to credit my American and Delta flights to Alaska, since Alaska miles are very flexible. The decision for now is whether to make a late-year push for MVP status.
Let’s lay this out:
I am currently sitting on 5100 EQM on Alaska metal, and 8200 including partners. That leaves me with 14900 and 16800 needed to re-qualify, respectively. Clearly we’ve made no effort over the course of the year to qualify!
A seasoned mileage runner, possibly of the single or without children variety, could do that in their sleep. I, on the other hand, have some restrictions. First, it needs to be done as a family or not at all – MVP status does not provide for companion upgrades, so it’s more helpful if we all have status. On some airlines, bottom tier status doesn’t provide upgrades as a practical matter, but on Alaska it does – especially on Boston-San Diego – so it’s a part of the value proposition. Second, because it’s done as a family, same day turns and things like 24 hours in the air are out of the question – it’s probably not good for me, definitely not good for a toddler and absolutely not something we’d expect her to be pleasant through. Plus, that’s just not fun. Last, time off is at a premium, so we need to consolidate this into the fewest number of trips.
We’ll have a trip around Christmas to Phoenix, which we can probably route through Seattle to pick up roughly 7000 of those needed EQMs. After running the numbers (I’ve been rounding for readability in this post), that doesn’t get us half way there, so the bummer is that it’s still going to take 3 trips to do. The premium on this BOS-SEA-PHX routing is currently $367 per person over the direct BOS-PHX flight on US metal (also the lowest cost route) – the math on that is a $500 premium per ticket but using a $99 companion pass for the 3rd seat, and it’s that premium cost I’m focused on because this trip is happening no matter what and is thus a sunk cost at the lowest available fare.
With 8000 miles to go, we are thinking two 3-day-weekend type trips in order to requalify for MVP status. One aspect of Alaska fares that tends to be pretty straight forward is that direct flights are almost always cheaper than connecting flights to another destination, even when other airlines are pricing out lower fares for a direct or one stop flight, when going east to west. I attribute this to Alaska’s network and pricing being built to move people intra-West and West-East, rather than East-West, but I doubt I’ll ever know for sure. Still, that helps narrow the shopping to BOS-SEA, BOS-PDX and BOS-SAN, since those are the non-stop Alaska routes out of Boston.
Ideally, we’d complete this before Thanksgiving if we do it at all. Portland, Oregon, has been high on our list of places to visit for a while. The best pricing over weekends seems to be in early November, for $375. We can use another $99 companion fare here, bringing the per-person cost down to $282. I’m going to count that entire price into the requalification cost since I don’t think we’d take this trip this year if we weren’t pushing for status. At 5.56 cents per EQM, that’s a little outside of proper mileage run territory, but still not reaching too far if the objective is to keep status.
Seattle, Washington, where we plan to go next summer, is the other likely option. We’ve been to San Diego a bunch over the past few years, so a trip to Seattle would be something new – and if I’m strongly rationalizing, would allow us to get a feel for the city ahead of our vacation next summer. Something like a FAM trip, except we’re not travel agents and we’re only selling to ourselves. This is solid gold rationalization. There is good availability in October at $306, and if we use the last of our $99 companion fares, it comes out to about $240 per person – 4.8 cents per EQM, which would qualify as a mileage run in the Flyertalk book (under 5 CPM currently). This is again a trip that we wouldn’t otherwise take this year, so the full cost applies.
So there we have it, our cost for requalifying at the MVP status level is roughly $889 per person, or $2,667 for the family, since we’ve already decided it’s all or nothing. This is exclusive of indirect costs like hotels, meals and activities, since I can get the hotel costs down using points and meals+activities wouldn’t be that much over what we’d do at home anyway. It’s a pretty steep price. I have also not added any costs of vacation time since we like to travel, and in that regard, using a day off to go somewhere is a worthwhile use of our time. I could use the same logic to write down some of the costs of this run, but the truth is, we’re picking destinations here based on status requalification – we’d otherwise go to places closer to home.
The Value of Alaska Airlines MVP Status
Knowing what we do about the cost, we need to look at the value of this status to see if the value adds up to make this a worthwhile endeavor. If you are doing your own calculation, the full list of Alaska Airlines MVP Status benefits are described here.
For us, the status benefits to which I’d assign value are the complimentary upgrades on Alaska metal (not Delta, since it’s just not likely to clear), baggage allowance on Alaska and partners, priority check-in and preferred seating on Alaska, American and Delta.
For 2015, I am estimating 4 trips on Alaska, plus 4 on American and 1 on Delta, based on our known plans.
Let’s start with the most difficult status benefit to value, and the most controversial in my household – my wife tends to value these upgrades a lot more than I do, but I will add that it’s really nice to have the extra space with a child.
Off the bat, I am zeroing out the value of upgrades on Delta because I have never received one, although I have been at the top of the losers list more than once.
On Alaska, there is absolutely no way I can just take the difference between economy and first class fares, since there is absolutely no chance we’d pay that – especially not if we take the 4 trips we have estimated for next year. On the other hand, Alaska offers buy-ups at check-in/at the gate for any F seats not otherwise bought or filled by elites. On routes like Boston-San Diego, these seats are usually available, and on a flight over 5 hours I’m likely to buy the seat. If all three of us upgrade on the round trip, that’s $9o0 in seat fees. It’s probably fair to discount that by the baggage allowance that is now complimentary, which we’ll call $100 per round trip (see below), reducing the complimentary upgrade’s value to $800. I’d also take the conservative route and say that we’ll upgrade on two trips of the four anticipated – likely the San Diego visits, but not any of the others, simply because SEA/PDX-BOS are more elite-heavy and the inventory is likely to be gone. Then we have $1600 in value from complimentary upgrades.
We generally check one bag per person per trip, but for this calculation, let’s be conservative and call it two bags for three people since if we were paying cash for bags we’d make a serious effort to consolidate luggage. Alaska otherwise charges $25 for the first bag, as do American and Delta. However, the first bag fee waiver is no longer an MVP status benefit with Delta. At $100 per trip in bag fees ($25 x 2 each way), we’re at $800 in value of status.
Priority Check In
I’ll admit this isn’t a huge deal, but it’s part of the formula to be able to show up relatively late to the airport, drop luggage, and keep moving. It’s of moderate importance to me because we tend to fly in the morning, especially so on transcons where we depart between 7 and 9am in both directions – we’re often running late to the airport and every little bit helps. It is worth noting that Alaska MVP status currently provides priority check in with American and Delta as well. Still, if I had to pay a la carte for this, I’d cap it at $50 per year for the whole family.
Prior to the changes this year, Alaska status of any kind used to get you Main Cabin Extra on American, as well as a discount on international Economy Comfort with Delta. As of today, those benefits are no more – Delta doesn’t provide any kind of Economy Comfort benefit, and American has aligned Alaska elites with its own, offering Main Cabin Extra for MVP Golds and above. MVPs do receive a 50% discount, equivalent to US Airways Silver and American Gold. Alaska itself has no enhanced leg room product.
Today all three airlines reserve some seats as “preferred seats,” usually based on location. On Alaska, it’s sometimes as much as the first 7 rows of Coach, from the bulkhead through the 737 exit rows. The bulkhead on the Alaska 737-800 is particularly good because there is no hard bulkhead wall, just a heavy curtain, leaving you with underseat storage and plenty of leg room. American reserves some preferred, non-MCE seats that Alaska MVPs can still access. These are generally US Airways style preferred seats, meaning aisles or just closer to the front, but sometimes exit rows. Delta also still has preferred seats separate from Economy Comfort, accessible by MVP status, and often includes exit rows.
Overall, I am likely to purchase MCE on American because the extra leg room means a little bit of walking room for my daughter. We’ve done with and without, and she’s definitely happier when there’s some room to get down from the seat. I also like the Alaska bulkhead a lot, but there is no way to access these seats as a non-elite short of purchasing a refundable fare. Delta’s benefit may as well not exist for this analysis because I can’t put a 2 year old in an exit row. If we value these by proxy, I flew on American and United twice combined last year (2013) and bought Economy Plus/MCE for around $200 total, and I would absolutely do it again.
Offsetting Award Travel
All of the above is based on domestic travel, as I have a hard time burning miles for domestic trips. Still, it’s worth mentioning that I have a little over 100k Alaska miles, 200k US Airways miles and about a quarter million Chase Ultimate Rewards points to use for flights or hotels. Simply put, a number of revenue trips next year could be displaced by award travel, but I’ve decided not to deduct these for two reasons. The first is that I’m absolutely unlikely to redeem any miles for domestic travel other than some 9k Avios redemptions for US short hauls, preferring to save my miles and points for a big international trip. The other is that our travel schedule is constrained by our work schedules – time off is at a premium, and we tend to travel when demand is high, such as around the normal work holidays to stretch that vacation time further. Domestic award redemptions are rarely available during these times, if not blacked out entirely, even if we wanted to go that route. For that reason, I’m not going to deduct value for award substitutions. If you’re flexible on dates, though, you may want to adjust your value calculation by the proportion of award versus paid travel that you do.
Missing Factors / Non-Valued Benefits
I realize I haven’t assigned any value at all to priority security or boarding benefits. It used to be that status was the way to get to the front of the security line, but Pre-Check has changed that. While it isn’t the front of the line, screening itself is expedited and generally more convenient than the simple line cut that elite status offers. All three of us have NEXUS, which has yielded 100% success for TSA Pre-Check on our domestic flights since we joined. As a result, I would not spend any additional money for priority security access.
Priority boarding, on the other hand, is generally the opposite of what I want. Even before I had a child, my goal was to get on last, not first. I’ve always prepared for this by packing into soft carry-ons that fit under the seat, so that full overhead bins were not an issue. We still do that today since it doesn’t take much time to install a CARES harness. I will also add that our experience with Alaska has been such that priority boarding is offered to families with small children anyway, so for me where most of my travel is with the family, this benefit already exists or doesn’t matter to me.
I’m not so bad at math, but I do see that I have $2,650 in potential value offset by $2,667 in costs. Still, I think that’s close enough to go for it unless the next week rolls around and we end up using our remaining vacation for sick time or something like that. At the risk of having made up my mind and simply backfilling the reasoning, which is a strong possibility given how much I enjoy travel, I’ll throw in some factors that I didn’t quantify to tip things over the edge.
The first is access to the elite desk when calling customer service – in the event of a delay, this is just about cutting to the front of the line for rebooking, but in other more ordinary circumstances still means less time on hold and in my experience across multiple airlines, a little more courtesy when it comes to one time fee waivers and such.
The second reason is the impact to business travel. On the 2-3 times per year I still travel for work, it’s in coach and usually with Delta. The ability to grab an exit row on an MD-80 is still nice to have. It’s also one of the few times I care at all about priority boarding, since I’m less likely to check a bag on a business trip and I want to get it in the overhead.
Third, I think I was conservative in my assumptions. Because we have family on the west coast, we’re flying out there a few times per year anyway just to see them. This year has been a bit off the mark in that regard, so if anything we’ll do more of it next year. Looking at this right now, the risk of adding a trip is higher than deleting one, so while I acknowledge that even one less trip (especially one of the Alaska trips) really crushes the benefit calculation, I don’t think it’s likely. That alone should requalify us for MVP status without the 4-5 additional round trips estimated, so even if I do end up being a little soft there, it will still amount to not writing this post again next year!
Finally, there’s the redeemable miles (RDM) bonus. Sure, manufacturing miles is the way to go and the balances I listed above are almost entirely from spend/manufacture. Still, a 50% bonus with MVP status is far better than nothing. A typical travel year is 30,000 miles for me, so the extra 15k earned there might be worth close to $300 if we’re really adding things up. I wouldn’t typically run for RDM with Alaska, but I’ll take the bonus. Rather than adding it in, we can call the RDM bonus a 10% margin (fudge factor?) in my analysis.I think we’ll go for it. Where do you stand on elite status for next year? Are you running for the first/next tier? Does status still provide value to you?
You wouldn’t catch me spending $2667 in order to buy status that might devalue. Let’s remember the intrinsic value of money today, and what that could be earning in the interim. Add on that you can take care of most of your travel using points/miles makes signing up to be a customer next year a less desirable thing.
I went back and forth on the conclusion since the analysis was very close to break even. Right now I’m still sticking with it because every calculated benefit was based on fees that I will almost certainly incur next year. One trip in either direction tips it, but its likely to be more than less travel next year.
You’re right that there is opportunity cost on the money. I knew I had that rdm fudge factor for something.
I’d offer (1) – What about a MR to Europe – you could knock out the requisite miles in one foul swoop if you can find a Delta or American flight. (2) – I’m in a similar boat, but Rose (my wife) is likely in a position of having to go to Denver a couple times before the end of the year, so I may just try to fly out to meet her for a trip…. That said, we’ve done some crazy trips: 52 hours in Shanghai, and we’ll be doing 36 hours in Hong Kong. Trips we have and will enjoy, but still crazy.
That said – if you’re just looking for bottom tier status, I really feel like CC’s offer better benefits, but that’s just me. Rose and I are both going for Executive Platinum (100k) status. Spoiled we are.
If I didn’t have a 2 year old, I’d go on a TATL MR of some kind. Realistically, though, I want to limit it to one long flight and no more than 2 segments each way. This way we also get to spend a couple of days at the destination. I’ve never liked pure mileage running mostly because I want to spend time at the return point. Only one of these trips – Seattle – would be purely frivolous. We’ve been meaning to go to PDX for a while as a long weekend, so doing it this year instead of next isn’t that much of a diversion.
To the extent feasible to acquire it, I still think some status is better than no status. Co-branded cards do a nice job filling in some of the gaps, like a free bag or priority access. But even in the grand scheme of frequent travel, of which I’m barely a participant, status has been good to me in a couple of ways – primarily, I get treated (mostly) like a human by customer service, and when something gets delayed, canceled or appears to be moving in that direction, I get to the front of the phone queue and CS is generally more likely to help me out. I alluded to it in another post, but at least once this year status was the difference between getting to an important event versus being one of 100+ in the cancel/rebook queue.
There are definite holes in my analysis, but I tried to stick to elements that I could quantify to some degree. I mentioned customer service as an aspect that is important to me, but I can’t begin to assign a dollar value. It’s just one of those things where if the dollars work out close to break even, that’ll tip me forward.
One thing that I’ll be writing about shortly, since you mentioned EXP, is the idea of deferring ALL of this travel into early 2015 (except Christmas) and realistically going for Alaska MVP Gold next year. AS MVPG is the best mid-tier status anywhere and challenges some top tiers, depending on what you value most. Most fees are waived at that level, and when I start to disclose what I’ve paid in change fees and abandoned fares since my daughter was born, you’re all going to laugh at me.
You forgot one very important factor: the value of the 2x free weekend trips! Thus, as it is, you’re not only covering your costs for next year, but getting 2x free weekend trips. If you valued the weekend trips at 50% (a steep discount in and of itself) of their actual cost, your breakeven point would be $4k in cost for the MRs. As it is, you’re sitting very pretty.
Are you talking about valuing the two trips that would be part of these runs – as in, the enjoyment of SEA/PDX? Interesting thought, because I totally wouldn’t do this if I didn’t already want to go to these places. Or are you talking about the RDMs collected as part of this?
The enjoyment of SEA/PDX. However you value it, it’s certainly not zero! 🙂
I’m curious to see how the math works out compared to opening a few Southwest cards, moving to a carrier that is totally friendly toward your habits where checked bags and cancellations are completely free, and letting Chase pay for your domestic travel. Yes, you’ll be driving from BWI to DC or Philly, but you won’t have to drive to BOS on the other end. And with $5.60 cancellations on BA, those should be Avios routes on AA and US. Via Baltimore or MCO, you can get just about anywhere you’re talking about going with one stop from PWM and save time (and money?) on driving and parking. $2667 can buy a lot of fun on the ground that you won’t be able to do because you’re maintaining the potential for a few upgrades on flights instead. Not meaning to be critical at all, but I think it’s worth looking at from this angle before dropping that kind of money on something that could prove to be of very little value and can’t be turned into anything else useful if some condition changes your travel plans. Miles and points can devalue, but status gets you absolutely nothing if you wind up not using it for a year.
Fair question. I do use Avios for some PWM-PHL/DCA trips, but not on as many as you’d think. Overall, I’m more schedule bound than anything, since my wife and I both work and we have a little kid. Award space may be there, or maybe only one way, sometimes not at all, and in those cases we pay for the tickets. In any case, Southwest largely just doesn’t work for us – there are a lot of surprises in the schedule out of PWM, and the price is generally not competitive here. Take for instance a trip to Seattle, which is likely to be a revenue flight for us next year for the return portion of our trip – that’s two stops on WN and $600 RT per person – call it $1200 with 3 pax and a companion pass, versus $720 for all of us on a non-stop on AS. The real burn, though, is that WN can’t sell me a valid routing on a Sunday from SEA back to PWM, which really does mean that I couldn’t go if that were my only choice. I know I picked one example there, but that’s a trip that is happening for us (the only question is will we go this year too) and in both cases is planned for a Sunday return due to work reasons. I also plugged in PDX and it looks like that service is seasonal. I think the last factor is that I value non-stop service pretty highly, especially now with a little one, and AS + its partners give me a lot of choices there. FWIW, I used to fly WN quite a bit when I lived closer to BWI, but their fares were honestly better then. I know you were just throwing this out as one option and there are others – I’ve considered just saying screw it all and flying JetBlue, who goes from BOS to pretty much anywhere. That option is still on the table I think. The problem is that I know we have at least 15,000 miles planned on AS for next year, so its tempting to retain status into next year knowing that we’ll almost certainly requalify without having this same discussion in September 2015. Another thing I’m considering is pushing these trips into 2015 since we might have a shot at MVP Gold. I should probably change the last part of this post to “Run… maybe.” 🙂
If you’re stuck flying on a schedule that doesn’t work with miles and points, that does change it up. I just see 4X WN cards so each parent can get $1500 which becomes $2250, each year. But it’s no good if you have to fly impossible routings to use it. We’re at 17K AS EQM all on partners this year and 22K DL EQM but we have too much already scheduled to even consider a status run.