The last week I’ve had only one thing on my mind: The World Cup. A few friends and I will be leaving for Rio next week and are planning to catch a couple of games. Although you might not be interested in going to the World Cup, I think this is a great illustration of the benefits and limitations of using miles for trips – and how they can save you a lot of money if you use them correctly.
My method(s) for getting three of us to Brazil
As I noted in my DIY guide to booking award tickets, award seats are generally a function of supply and demand. When you combine two things – North American summer and the World Cup – demand was obviously going to be super high for tickets, and the odds of airlines releasing award space were going to be pretty low. To deal with this, I made sure to try and book tickets the moment the calendars opened up. That meant when I was in Italy last year making sure I was by a computer 330 days (or so) before my desired travel date. To complicate things, I was looking for tickets for both a friend and me.
Well, 330 days before my travel date, in Montepulciano, I logged into my computer at 10 AM, and lo and behold, I was able to snag two award tickets from the United States (Boston and LA) to Rio in business class on US Airways using United miles. Five days later I booked my return flight (when that schedule opened up), and two days after that I booked my friend’s return flight. So in this case, the early bird got the worm. All in all, we each paid 100,000 miles for business class flights to and from Brazil – a real coup in my opinion.
In September, a second friend in our party with about 100,000 combined United miles and Chase Ultimate Rewards points asked if I could help him find a flight. I wasn’t sure if I could find him something, but then one day all of a sudden Copa Airlines opened a bunch of saver award space in business class. I was only able to find him business class seats for the way home (and Copa’s business class is more like domestic first class anyway), so for his flight to Brazil I helped him book a standard award on United. Normally, I don’t recommend booking standard awards since they are more “expensive” miles wise, but for an event like the World Cup I think it’s worth it. He ended up using 105,000 miles total for economy there and business on Copa back.
Booking with miles – saving money?
So, did we save money? Our other friends who are meeting us all bought fares in coach – the lowest they were able to get was about $1600. The cheapest flight as I write this is around $2000. So, doing a little bit of math, all three of us got about 1.5 cents worth of value per mile used. To me, that’s pretty great value – especially for the two of us flying in business class both ways.
My second friend is the easiest example though – he applied for two cards to get the miles he needed – the United Mileage Plus Explorer card (personal) and the Chase Ink Bold (business). He had to do $7000 in spending over three months and earned 112,000 points from that spending. Now, if you calculate that out – he spent 6.25 cents per point earned, so how is that a good deal? Well, it’s a good deal because that’s spending he would have been doing anyway. If he had a card like the Fidelity AMEX, which gives 2% back on everything, he would have earned $140 from that $7000 in spending. So in a sense, he “sacrificed” $140 for his ticket to Brazil – but that is way cheaper than the $1600 he would have had to pay out of pocket – for coach. To put it another way, if you are just earning 2% on your card, you are spending 50 cents per point earned. That is the power of sign up bonuses.
Still want to go? There are limited seats available for miles redemptions – are they worth it?
I decided to write this post because last night I was cruising around the interwebs looking for alternate flights home and noticed there still is a decent amount of award space out there. For starters, there is a ton of “standard” award space on almost all airlines, which they’ll basically let you redeem miles for as long as there is an empty seat. For United, this will cost you 130,000 miles round trip – I think $2000 is probably the better deal here but if you’re miles rich and cash poor it’s an option. American Airlines has tickets available for 110,000 – 150,000 miles. For 110,000 miles, that is getting pretty close to the same value of $2000 in my mind, so that is closer. Delta has standard awards available for 112,500 miles, though you’ll have to find your way to Atlanta too which complicates things.
How do I determine whether using miles is “worth it”? Well, valuations will differ for different people, but I basically use this equation –
(Cash Ticket Value – Taxes/Fees Paid) / (Miles Used – Potential Miles Earned) = cost in cents per mile used
If the equation seems confusing, just think of it like this: money saved divided by miles forfeited = cents per mile. If that value is > 1 cent per mile, then I figure I’m doing better than a 1% cash back card (because I earn 1 cent per dollar spent on one of those cards). Now you also have to decide whether to compare this to a coach ticket value or the ticket in the actual class you are flying – I suggest doing coach because would you really pay $5000 to fly in business class? You can brag about the cents per mile value you are getting by throwing in the business class price, but the coach price is probably a more accurate estimate of how much you’re actually “paying” (assuming you would have taken the trip regardless).
So let’s take a look at these standard awards. I’m going to assume flying from the US to Brazil nets you about 15,000 redeemable miles (assuming you don’t have status) and estimate taxes and fees at about $150. At the current going rate for flights ($2000), you can redeem for standard awards in coach on the three major airlines for the following values:
American = 185,000 cents saved / 125,000 miles forfeited = 1.48 cents per mile
Delta = 185,000 cents saved / 127,500 miles forfeited = 1.45 cents per mile
United = 185,000 cents saved / 150,000 miles forgeited = 1.28 cents per mile
Bottom line: if you want to go to the World Cup, using miles is probably saving you a little bit of money overall.
The nice thing is, if you are flexible, there are saver options to Brazil. I just noticed that United opened up some space between last night and today, while AA has had some economy space and spots of premium cabin space. Delta of course has no saver space but no surprise there. I’m not going to go through everything – if you want to search, I’d recommend starting your searches from Houston, Dulles, and Newark (United) and Miami, Dallas, and JFK (AA). But here are some heat maps for what’s out there – note I searched for two seats each time – there might be even more space if you search for one.
Note: since you can do one way bookings on both United and American, if you have miles in each program, you could always combine to try to maximize legs at saver fares, saving you even more miles.
The lessons from the World Cup apply to all bookings: your first crack at award space is going to be right when the schedule opens up (~330 days out, though it varies by carrier and it pays to do your research). Eventually, no matter how hot the time, there are probably going to be award seats opening up again – but most probably won’t open until close to the actual event/holiday (the World Cup starts June 12th). Still, with patience and steady, systematic checking of award space – saving money on flights to these big events (including Carnivale if Brazil is your thing by the way) – is possible! You’ll get to chance for once in a lifetime experiences and probably save some money along the way. It doesn’t get much better than that.