Basic question: miles vs. paying for ticket
 

I'm wondering how to make a decision about using miles. Is there a general principle that you all use?

I'm traveling to Munich in April and can use 60,000 miles from United Mileage Plus, or pay $1,250 for the fare.

Generally, if someone else is paying for the ticket- use cash! If it's for me, use miles, so long as the redemption fee is reasonable (read: NOT BA). :D

The general principle is use the one that's worth less. Generally, 60k UA miles are worth less than $1250.

Most people would say that points are generally worth about 1.25 cents each. Of course, your own value may vary from that. For someone who travels overseas only occasionally but really really hates flying coach on those routes, they might be willing to "pay" $2000 or $2500 or $3000 for an overseas business class ticket, which they can get for 100,000 points (sometimes). For someone like that, it would probably be a mistake to use 25,000 points for a $400 domestic ticket because they are getting "value" of 1.6 cents per point.

Lacking some special consideration though, you are getting reasonably good value for your 60K points. No one here would say you are foolish to use the miles. (But with the miles what will the ticket cost in fees and surcharges? That's a key point. Are you really saving $1250?)

Any use of miles for a value under 1 cent per point is almost always foolish, unless you really see no good redemption opportunities in the future.

It's also always good to have enough points on hand for an emergency. I remember one time before my wife and I got married, she had a sudden surprise 5-day weekend and a last-minute ticket would have been $2000, but there was a 25,000-mile award ticket available. I'd have been REALLY sad if I didn't have 25,000 points around.

When using miles, I generally try to get $.02 in value per mile, vs. the price in $$ I would otherwise have to pay for the ticket.

e.g., faced with a choice of paying less than $500 for a ticket or using 25,000 miles, I will usually pay cash.

Of course there are other variables involved, e.g., DL miles are less valuable to me than AA or UA miles.

[QUOTE=yojimbo;17995272]When using miles, I generally try to get $.02 in value per mile, vs. the price in $$ I would otherwise have to pay for the ticket.

e.g., faced with a choice of paying less than $500 for a ticket or using 25,000 miles, I will usually pay cash.

Well put, $.02 is a good rule of thumb. I wouldn't go less than $.015 and anything over $.02 is very good. Fuel and other charges also have to be figured into it.

I am lucky because I am broke. So any flights I take with miles are flights I never would have been able to get regardless of what the cpm is.

But I still look for 2 cpm at minimum on my awards and since I travel so infrequently and mostly international I am usually around that number.

It is also the intrinsic value of the flight. Intangible factors that make this trip PERSONALLY more valuable because many times cpm does not reflect the impact this trip has on your quality of life.

It is a general rule of thumb but not something to beat yourself up about if you are a 1/2 penny less.

60,000 for this flight isn't a good redemption.

$1250 for this flight is an even worse purchase.

I look at it this way: What is harder to get, the 60,000 miles or the money for the fare? With the exception of nice credit card bonuses, it's a lot easier to come up with the $800 or so that a ticket normally costs. I routinely pay under $500 for tickets between Europe and the US.

Unless you are completely incapable of using flexible travel dates or looking at nearby airports like ZRH or FRA, you have no reason to pay this fare in APRIL!

In simple terms that is OK, i.e., 2 cpm.
Actually it depends on where you are, whether you care about status, if there are double EQMs and if this is a deductible expense.
60000 miles + 100$ fees = 1250$ + 10,000 miles flown +/? elite bonuses and 10,000 EQMs
Assuming non elite, so no double bonuses and no worry about status for next year,
60000 - 10000 miles = 1250-100
or 50000 = 1150 = 2.2 cpm = OK value for use.

This is not a great equation, because the fees are things I PAY, while the miles flown are things I GET. This looks like you're paying the 10000 miles; they should have a minus in the first equation.

Say I have $1250 and 60,000 miles right now. I can either
A) Take the award and have $1150 and no miles.
B) Buy the ticket and have $0 and 70,000 miles.

The real tradeoff is 70000 miles or $1150, roughly 1.65 cpm. That's not great value. I wouldn't do it, because the EQM also have substantial value to me. However, if I had not much cash and didn't worry about EQM, it's not terrible either.

This particular example isn't necessarily a bad idea given the $1250 price tag, but I'm just shocked that the OP has to pay $1250 for that flight.

Flight is economy? If so are you sure you can't find 1 cheaper?

Do you have any AA miles? It would only be 40,000 R/T for an AA Off Peak award if you could still find availability. Maybe you have these points in Ultimate Rewards and haven't transferred to United yet? You might be able to transfer to BA and book an award on AA for slightly less depending on your starting airport.

You need to make whatever decision is right for YOU. The answer to this question mostly breaks down to an opinion. If you are traveling for leisure (ie your company isn't paying for this flight), then why not save $1,250 by burning 60,000 miles which you probably obtained for just 1 inquiry in your credit report and minimal, if any cash.
If it was me, I'd save $1,250 and book with miles. However the poster below does make a good point that flights to Europe in April should be under $1,000 still. I just booked 6 myself in the $800-$900 range...


This is true... I just booked 6 tickets at the end of April r/t to FRA for $800-$900. $1,250 sounds like a summer fare.

Right now, March fares from Washington to at least some German cities are in the $825-$850 range. I'm not sure what city you're travelling from, but I am surprised that April is that much more expensive, unless you are travelling over the Easter weekend. Personally, I would use 60,000 miles rather than pay $1200, but not instead of paying $850.
If you do purchase a ticket and are using a partner airline such as Swiss, Austrian or Lufthansa, be sure that your ticket earns miles. United and Continental have become more restrictive about this in recent months, and even from the East Coast about 9,000 miles are at stake (RT). Lists of eligible fare classes are available on the United and Continental websites; there are, at least for now, some differences between United and Continental in this regard.

Thank you all for your suggestions and calculations on how to figure this out. I really appreciate it.

I will try to find a cheaper ticket, but so far, because I fly from small (and expensive) market MFR, I can't find anything under $1050 to FRA - but then I still have to get to MUC, so that will add at least $100 by train. My miles are on Mileage Plus.

If I can't find a ticket cheaper than $1200, I'll go ahead use the miles.

Personally I factor in also how much $ I have available.
Since I fly the whole family, and not just me, I sometimes buy 1 ticket and use miles for the 2 other to offset the cost of activities on location... I think it all varies based on everyone different current situation, I don't think there is one model that fits all.

I agree with the concept that it's based on so many individual circumstances that what's foolish it to try to apply a one-size-fits-all rule.

Personally, I burn 'em as soon as I get 'em.

I see that a number of people have already given good answers to this. My approach is to look for at least 1.5 cents per mile value on an airline where Im not working towards status or 2 cents on airlines where I am working on getting status. Here's a post I wrote on this:

http://boardingarea.com/blogs/frequentmiler/2011/12/23/when-is-an-award-flight-a-good-deal/

COST OF TICKET: $1250
COST OF MILEAGE TICKET: 60000 miles + $150 + opportunity cost of not earning 12,500.

So the total value is 47,500 miles vs 1100 - 2.3cpm, ok for a coach award


Have you checked Air Berlin out of SFO?

For me it depends on lots of factors. If I am storing up miles for and F or C class long haul to Asia then I would just spend the cash for the MUC flight. If I had more miles than I knew what to do with and no other planned travel in the offing I would probably go ahead and use the miles.

What dates are you flying in April? Kayak.com (great search engine!) has a new "flex month" feature instead of just +- 3days and I punched in a 6-9 day stay from MFR to MUC and there's lots of dates in April for less than $1,000 round trip:

http://www.kayak.com/flights?fid=&tr...calendar-6to10

That said - don't let anyone make your mileage decisions for you. Saving $900 on airfare is still a FANTASTIC deal out of your miles, as it's $800 in savings or so (after taxes for the award). Your call.

I understand the small airport thing, living in Iowa. The nearest airport with more than one airline is 90 miles away. Looks like your 5 hours from Portland and 4+ from Sacramento. Pretty brutal drive to do a long flight. Been there, done that - spend the extra money or miles. Worth it to me.
Personally I'd still burn them, b/c I don't pay for flights :) but you should make your own decision.

I paid right around $1,200 for a midsummer United "W" fare a couple summers ago to use SWU's. Only way I'd ever buy that fare is if I was already sitting on enough SWU's to cover the whole thing and I was also looking at NC availability on both directions' long-haul flights. (Of course judging from the UA board these days, it sounds like the entire SWU environment has changed for the worse since my 1K years.)

Anyway...the thing that surprises me is that you're looking at this very high fare and also seeing standard coach awards available. If for whatever reason, you've hit upon a date where all airlines are selling $1200+ R/Ts to Europe, you've usually found a date where the standard 30k-each-way awards are long gone. There are exceptions of course but that's how I usually see it when I look.

However, if this is truly the situation...you can't do better on fare, you don't have date flexibility, and you're looking at XY availability...then I would go ahead and redeem the miles. UA doesn't hit you with fuel surcharges - only some government taxes. It'll still net out well over 1.5 cpm, even if you're committed enough to United to place a similar value on the future miles you would have gotten by buying the ticket.

The only exception would be if I was placing value on these specific EQM. Hard to get too carried away with this in April unless you have the rest of your year planned, but if I felt like I needed these 10,000+ EQM from the Munich trip to qualify for my 2013 elite tier, then I'd apply some sort of subjective adjusting factor to the math. It would probably depend on the tier.

Miles generally do not get more valuable with age. I'm now using many AA miles as I can't predict the future.

However, my best use of miles is to buy the ticket for money and upgrade with miles.

Works for me.

You may find the Value of Miles section of my website below to be useful. It shows you step by step how to value your miles.

I think what you meant is:

So the total value is 72,500 miles vs $1100 - 1.5cpm, ok for a coach award

I am surprised we don't have a master thread on this topic as this appears to be a common question that crosses all programs.

My current situation (which interestingly is not all that different than OP):

The trip: Business Class TATL (Europe->SFO) during peak summer season, very little flexibility on dates (+/- 3)
Cash cost of tickets: $1150 x 4 persons = $4600 – great itinerary with one connection and lie-flat seats, decent EQN + RDM
Mileage option: 70k miles x 4 = 280k minimum – at least 1 connection and probably 2, plus maybe a $$ positioning flight to the gateway city

At this point there is ZERO award space for <100k per person, though that may change. If I could find space at 70k the redemption value would be .014 per point.

Seems like cash is the right choice, except that I don’t particularly want to shell out $4k and my family does not need the EQN or RDM. On the flip side, I try to redeem for .02+ per point. And we already redeemed 280k for outbound TATL flights in C on LH, which was a big win.

Thoughts?

Pay whenever you can
 

Miles are not getting any easier to acquire, so I pay as often as possible. However, as UA 1k (and AA EXP with a nice pile of AA miles,) I'll use the miles for an award in the future and keep checking for price drops or other options to open up if I want a particular flight or time, as I can cancel the rewards w/o cost or fees.
Other considerations would include being close to a milestone for elite status/UPG's/Million miler status/promos or just accumulating miles for a better (aka Business class) award, as I don't like coach awards for international travel unless absolutely necessary. While elite status is generally not worth the cost and effort these days, there are some worthwhile benefits and may find it useful to hit that.
One other thing to look at is a one way award to Europe, as there are so many deals out of Germany, i.e. LH's $500 RT to many US cities. Sure, not easy to get to your home airport, but with some effort, you may find something that brings down the total cost, in both miles and cash. You can either plan another trip back to Europe, or just toss the return-as a German court recently made this OK to do, invalidating some of LH's T&C's.

A legit J seat, Europe to SFO, for $1150 in the summer?!!?

That seems like a pretty easy call regardless of how useful the EQM/RDM are to the other travelers on the itin. Depending on carrier choices, you might actually be able to credit that to AS and have RDM totals that *do* matter in all four accounts.

Was that an elusive fare you're hesitant to share with the world or something that was available pretty readily? (Believe me, I totally understand if you'd rather keep it quiet.)

One consideration (aside from he miles/$ rate) is if you'll ever use the miles on something else. The more miles you have,
the less they are worth. Can you ever have too many miles? yes.

My theory on biz travel is that it divides sharply between people who get way too much and those who get little to none. Airlines have done their de-vals just in time for Baby Boomers who were saving the miles to use in retirement to get quite a bit less than they thought they were going to get.

Though those of us who were with Continental in the early aughts can remember when they did an "award auction" with things like baseball tickets or travel experiences being put up for bid (with miles). Some reached insane levels.

I've probably earned about 3M miles lifetime and have spent 2.8M of those. Am just glad I spent the 2.8M when I did because they'd buy quite a bit less now.

The $1150 fare was offered by TAP on connections to its new LIS-SFO (lie flat) nonstop that starts this summer. Unfortunately I missed the boat (you snooze you lose!) and the fare is now +$200 but still available for most of the summer. From what I've seen you need to select a connecting flight (mine originates in Italy) or you'll pay +$100.

This fare deal was posted last month on Lucky's OMAAT blog and I think there was also a TAP thread in Premium Fare Deals forum. Sorry for the delay but the good news is that it is still there (albeit a bit higher).

Wow...that's pretty solid. ^

We're flying home from Europe this summer on TAP, originating in MAD, stopover in LIS for 3 nights. 5 of us including two kids so we just took the coach option. $340 one way with bags. (Going over there using Avios on EI.)

Sounds like TAP is trying to grow brand awareness and market share in the U.S. It's one of those airlines I've barely paid attention to until about a year ago. I've been warned that I'm probably going to fall in love with Lisbon and want to go back to Portugal again to see more of the country. So maybe not my last TAP flight...especially since they offer stopovers in any fare bucket they sell.

I usually use miles on either business class or first class redemption from US to South East Asia. I will never pay $5000+ for such trips!

I would rather fly economy on that and use my BA avios to redeem more short-haul O/W tickets.

I would rather buy 10 cheapo economy tickets on WN and use my miles and points to fly TATL in business class. YMMV

I would love to use Avios to redeem to Aer Lingus J, but I can never find it available. EI Y is pretty easy to find, so I just live with that for the 6 to 7 hour flight.

The fees to redeem Avios on the other TATL options are a deal-breaker for me. At that point, I'd just rather look for a good deal on a paid J fare.

If you book with miles you can cancel (at a much lower fare) or rebook for $150 - which might be a good benefit so fare out. Also look to use miles one-way and the return in cash. Sometimes that can be a better deal.

Concur about the heinous surcharges. Accordingly I would only use Avios to redeem for TATL C/F class in conjunction with a Chase 241 cert. I have not had much difficulty finding seats (even from West Coast) if reserved very far in advance of travel but it is hit or miss. Otherwise I think using Avios to book partner awards to South America avoids the surcharges, no?

I think my point is that I would not use for cheapo short flights in Europe on a regular basis but certainly would do so as an add-on or stopover to a TATL (on BA or otherwise). Alas it is at least 10 hours to the West Coast, so Y is no longer an option for me. :)