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-   -   BA miles redemption tax versus AA (https://www.flyertalk.com/forum/milesbuzz/1028017-ba-miles-redemption-tax-versus-aa.html)

moondog Dec 21, 2009 11:33 pm


Originally Posted by Happy (Post 13033769)
Dont forget most folks in US are NOT accustom to the horrendous fuel surcharges BA imposes on the Brits. So most would redeem their miles on partners who either have a much more reasonable fuel surcharge or does not have fuel surcharge at all. :D

When the deal was still active, I forwarded the link to a bunch of people and the majority of feedback I received pertained to Trans Atlantic travel. Even those who didn't notice the companion certificate offer were drawn in by the "2 tickets to Europe" tagline.

More evidence of this phenomenon:
-there are numerous posters in the main thread that STILL don't have, even a minimal, grasp of the partnership concept
-the companion ticket is often hailed as the biggest fruit within the deal out in the blog world (couldn't bring myself to pen "blogosphere")
-the card bears the BA logo, which has strong brand recognition with respect to travel to/from Europe
-the BA website is programmed to goad the ignorant into flying BA metal, even in cases in which doing so makes no sense at all (e.g. SFO-NRT)
-one can only assume that the majority of cardholders will not stumble upon our chatter here and go with their instincts (i.e. play right into BA's hand)

In short, I have to believe that the deal was designed to make money, but the more our words (especially, "don't spend $30k on the card") get out, the less money they'll make.

Happy Dec 22, 2009 12:04 am


Originally Posted by moondog (Post 13033955)
When the deal was still active, I forwarded the link to a bunch of people and the majority of feedback I received pertained to Trans Atlantic travel. Even those who didn't notice the companion certificate offer were drawn in by the "2 tickets to Europe" tagline.

More evidence of this phenomenon:
-there are numerous posters in the main thread that STILL don't have, even a minimal, grasp of the partnership concept
-the companion ticket is often hailed as the biggest fruit within the deal out in the blog world (couldn't bring myself to pen "blogosphere")
-the card bears the BA logo, which has strong brand recognition with respect to travel to/from Europe
-the BA website is programmed to goad the ignorant into flying BA metal, even in cases in which doing so makes no sense at all (e.g. SFO-NRT)
-one can only assume that the majority of cardholders will not stumble upon our chatter here and go with their instincts (i.e. play right into BA's hand)

In short, I have to believe that the deal was designed to make money, but the more our words (especially, "don't spend $30k on the card") get out, the less money they'll make.

Nah, I am cool with the ignorant and uninitiated to think the 30K two-fer is the greatest thing... Let them redeem on BA metal and leave more inventories on the partner flights for those of us who see the other way. :)

Mr. Bean Dec 22, 2009 11:25 am

even redeeming on partner metal, BA may profit:

I am working on a 20K flight mile oneworld award and indeed, as BA charges the YQs for partners, the trip cost is calculated as 100K miles + about $750 in taxes and fees (about $550 in YQ, rest in taxes).

The worst part is that for intra europe fares, where the base fare is low, one still has to pay the rather high YQs (on IB, MA, AY, etc.), so the difference in cost between a paid ticket and award ticket is relatively small, but no status or miles accrual is possible on the award ticket. e.g., FCO-MAD on IB costs about $80 in taxes&fees (for Y). MAD-JFK is about $180 (YQ is 100 EUR).

Of the partners, QF and IB seem to have the highest surcharges, with RJ a close third. CX, JL, and AY are not bad, but finding AY for TATL legs isn't the easiest.

How does BA profit? Well, as I understand, the YQ is kept by the ticketing carrier (BA in this case) and not passed on to the operating carriers.

Just my experience so far, YMMV.

Prospero Dec 22, 2009 2:20 pm


Originally Posted by HIDDY (Post 13033415)
I think you'll find it's Chase who has the dire need for customers. BA are raking in the cash for otherwise empty seats. ;)

Indeed! With this promo, the BAEC will paid very handsomely by Chase. Infact, I'd be surprised if the BAEC US offices didn't have sign up details plastered on every memo board :p

redtailshark Dec 22, 2009 8:06 pm


Originally Posted by Prospero (Post 13037914)
Indeed! With this promo, the BAEC will paid very handsomely by Chase. Infact, I'd be surprised if the BAEC US offices didn't have sign up details plastered on every memo board :p

They may rethink this when they see the shark's itin, concocted with great artistry from their 100k bonus to maximize the NUC hit :p

Of course, this needs to happen before BA enters administration so that I get full value. The period following the next strike is the most likely, so I have a few months to lock in on CX/JL.

moondog Dec 22, 2009 11:42 pm


Originally Posted by Prospero (Post 13037914)
Indeed! With this promo, the BAEC will paid very handsomely by Chase. Infact, I'd be surprised if the BAEC US offices didn't have sign up details plastered on every memo board :p

What's your source for this? (As I mentioned upthread, I peg the number at .3 cpm or less, which hardly qualifies as "handsome," but I'm interested in information to the contrary.)

beachfan Dec 23, 2009 6:23 pm

I'm trying to do fair math on whether the 30k Chase deal is worth it.

I find that the taxes are a red herring, as they are the same no matter what the airline is (I think). Fly biz, and stay two days in London and wham!, no matter who you fly.

So if the fuel surcharge is the big difference, and I'm allowed (I think) a free stopover in LHR from LAX (on BA), then LAX-FCO on BA with the 30k cert in J would be $410 each in fees beyond what I'd pay via AA. With the new one way flight on AA, it's both 120k. So I'd pay $205 x 2 (for RT) x 2 (for two people) or $820 for a J ticket (vs. AA with no surcharge) worth 120k miles. Around .7 cents a mile.

Is my math right? If so, I'd like to see more of it by other posters.

Likewise, if I'm considering LAX-MLE (Maldives), that would be $820 for the second ticket, for a ticket worth 180k miles (in business class), or about .5 cents a mile. Sweet.

Going first class would make the fees about .3 cents a mile. Not sure I think first is worth the extra miles (even considering the 2 fer) but it does make the fuel charges less of an issue.

There are probably a few other fees to figure in, but isn't that extra LAX-MLE ticket business class ticket cheap even if I have to pay $1400 between taxes and fees for the two tickets?

I think if you talk about the opportunity cost re 2% cashback on the $30k spend ($600), you'd have to compare it to the cash price of the ticket. I think I know how that would come out.

Happy Dec 23, 2009 6:25 pm


Originally Posted by moondog (Post 13040534)


Originally Posted by Prospero (Post 13037914)
Indeed! With this promo, the BAEC will paid very handsomely by Chase. Infact, I'd be surprised if the BAEC US offices didn't have sign up details plastered on every memo board :p

What's your source for this? (As I mentioned upthread, I peg the number at .3 cpm or less, which hardly qualifies as "handsome," but I'm interested in information to the contrary.)

You should see it by now - no matter how the reality is, the Brits would not admit that BA is in dire financial needs... It is all pure speculation with lots of national pride thrown in... about how BA could make out like a bandit... Yeah, right! :rolleyes:

moondog Dec 23, 2009 8:59 pm


Originally Posted by beachfan (Post 13045581)
So I'd pay $205 x 2 (for RT) x 2 (for two people) or $820 for a J ticket (vs. AA with no surcharge) worth 120k miles. Around .7 cents a mile.

.....

I think if you talk about the opportunity cost re 2% cashback on the $30k spend ($600), you'd have to compare it to the cash price of the ticket. I think I know how that would come out.

You should add the $600 to your $805 figure, which puts you just shy of 1.2 cpm.

For the Maldives, I'd be inclined spend an extra 20k miles (2*100k) and get as close as possible on CX or JL. By going this route, I'd be up $600 plus the difference in YQ (between BA and CX/JL), which I'm going to assume is around $200 per ticket. With any luck, I'd be able to make it the rest of the way for $300 pp, which puts me $400 ahead, effectively valuing the additional 20k spent at 2 cpm.

Mr. Bean Dec 23, 2009 9:53 pm


Originally Posted by beachfan (Post 13045581)
I'm trying to do fair math on whether the 30k Chase deal is worth it.

I find that the taxes are a red herring, as they are the same no matter what the airline is (I think). Fly biz, and stay two days in London and wham!, no matter who you fly.

So if the fuel surcharge is the big difference, and I'm allowed (I think) a free stopover in LHR from LAX (on BA), then LAX-FCO on BA with the 30k cert in J would be $410 each in fees beyond what I'd pay via AA. With the new one way flight on AA, it's both 120k. So I'd pay $205 x 2 (for RT) x 2 (for two people) or $820 for a J ticket (vs. AA with no surcharge) worth 120k miles. Around .7 cents a mile.

Is my math right? If so, I'd like to see more of it by other posters.

Likewise, if I'm considering LAX-MLE (Maldives), that would be $820 for the second ticket, for a ticket worth 180k miles (in business class), or about .5 cents a mile. Sweet.

Going first class would make the fees about .3 cents a mile. Not sure I think first is worth the extra miles (even considering the 2 fer) but it does make the fuel charges less of an issue.

There are probably a few other fees to figure in, but isn't that extra LAX-MLE ticket business class ticket cheap even if I have to pay $1400 between taxes and fees for the two tickets?

I think if you talk about the opportunity cost re 2% cashback on the $30k spend ($600), you'd have to compare it to the cash price of the ticket. I think I know how that would come out.

Don't forget that you have to transit between LHR and LGW for LAX-MLE. Unless you're stopping over twice in LON, it isn't the most pleasant trip up/down the M25. Nor is it particularly cheap.

beachfan Dec 23, 2009 11:55 pm

[QUOTE=moondog

beachfan Dec 23, 2009 11:56 pm


Originally Posted by Mr. Bean (Post 13046432)
Don't forget that you have to transit between LHR and LGW for LAX-MLE. Unless you're stopping over twice in LON, it isn't the most pleasant trip up/down the M25. Nor is it particularly cheap.

Thanks. I knew that. Figure it would be a true stopover once and a 23 hour stay the other time in London. I'd be happy to stopover twice but the taxes drive it up.

moondog Dec 24, 2009 12:28 am


Originally Posted by beachfan (Post 13046813)
Appreciate the thought, but seems like a couple of flaws:
1) My source of BA miles is credit card spend. So in order to get the extra 20k, I'd have to spend about an additional $16k on the card.

Hmm. I assumed you had two 100k cards and we're planning on spending the miles. I'm not fond of the idea of spending to get more in this current climate in which better offers are aplenty.


2) $300 pp in business class from the Indian subcontinent to maldives? I'd be surprised if you could do it for double that. And it's an extra stop. And who wants to transfer in India if it isn't necessary (I was there last year and know exactly what's involved).
Since I was suggesting CX, you'd be coming from from the other direction (HKG or another logical connecting point). Honestly, I have no idea what it costs to get from there to there, but when I was living in PEK, I frequently saw Maldives vacation packages for around $1000.


If I am doing the 2% cashback addition, and add in the $75 credit card fee, I'm still getting TWO business class tickets for $1480 plus tax plus the existing 50k miles I currently have. I gotta think thats still a great deal. Not many options to MLE. Don't know how to search for best prices on that route, but it lists for $13,729 for two on BA.COM for dates in June (there were more expensive busienss class options)
You seem to be on the right track. While I couldn't dream of going for a companion cert (added mom and gmom at 100k each), it might work well in your case.

beachfan Dec 24, 2009 9:42 am

I was denied a card because of CitiAdvantage card churning. My wife got one. Otherwise I wouldn't due the spend either.

I agree with the 2% opportunity cost, but for me, the real opportunity cost would be 30k starwood points, as for the the travel I do, free hotels beats the 2%.

ajnaro Dec 24, 2009 3:47 pm


Originally Posted by beachfan (Post 13048389)

I agree with the 2% opportunity cost, but for me, the real opportunity cost would be 30k starwood points, as for the the travel I do, free hotels beats the 2%.

You lose 30k points (with Starwood AMEX) or $600 (with Schwab VISA), but in addition to the double mileage redemption you also get 37.5k BA miles (potentially usable as 75k BA miles if part of a double redemption). These miles may offset the opportunity cost, without taking into consideration the potential doubling of the 100,000 BA mile initial bonus.


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