A great combination: American Airlines status plus Citi Prestige

Last week, as the clock ticked down towards the last chance to use US Airways Chairman Preferred upgrade certificates, I finally found a reasonably good use for them. My wife and I had been planning a short trip to London where she has a business meeting in May.  Our plan was to buy economy seats and use my wife’s Delta Diamond global upgrade certificates to fly business class.  We were going to leave our son in my mom’s care, which would have been fine, but we still wanted to minimize our time away, so non-stop Delta flights were key.

Then, our son decided that he wanted to go too.  And, what the heck, I asked my mom if she’d like to join us.  Yep!

Our new plan was to use my wife’s Delta upgrades for her and our son while I would use my US Airways upgrades for myself and my mom.  Delta upgrades were readily available, but US Airways upgrades were hard to find.  I used Expert Flyer to search for upgrade space.  Nothing was available to London.  And, due to the merger of the US Airways and American mileage programs, wait-listing wasn’t an option.  I then checked the US Airways Route Map to look for other options.  Back to Expert Flyer, I checked almost every single US Airways transatlantic flight.  I found return upgrade space on a number of routes, but very little outbound.  That made sense.  Almost all outbound flights are overnight, and people value the ability to lie flat and get a few hours sleep, so business class seats on those routes are in high demand.  In the end, I found two options that would work for us: Philadelphia to Athens and Philadelphia to Shannon, Ireland.  Both were similarly priced.  The Athens flight had the benefit of offering more earned miles, but would land us pretty far from London.  The Shannon flight, on the other hand, would get us close to our desired destination, and was a good fit overall time-wise.  I booked the latter with a return flight from Dublin.  I would worry about booking flights between Ireland and London later.

Unfortunately, I hadn’t done all of my homework ahead of time…  When I called to apply my upgrades I learned that the outbound flight to Shannon does not have fully lie flat seats.  Ugh.  Still, I expect that we’ll be substantially more comfortable than in coach.  I realize that, to many, it must sound crazy to book a two-stop route to London just to make use of expiring upgrade certificates.  Yeah, I agree. But, my mom was up for the adventure and it will help me re-up my AA Executive Platinum status for 2016 so I think it’s worth it.

I paid for the US Airways flights with my Citi ThankYou points.  Citi Prestige cardholders automatically get 1.6 cents per point value from ThankYou points when they’re used to book US Airways or AA flights.  The flights I booked weren’t particularly cheap (about $1200 each), but it took only 149,220 ThankYou points to book both flights.  And, we’ll both earn miles for the trip.  Considering that some airlines charge almost that many miles at their saver level for a single round trip business class award flight to Europe, I think we got a great deal.  Delta, for example, would charge at least 125,000 miles per person, plus taxes and fees.  Since ThankYou rewards are tied directly to airfare, it would have been possible to get an even better deal if I had found a lower priced itinerary.

Prestige, plus AA Executive Platinum

Shortly after booking and upgrading our flights to/near London, I logged into my American Airlines account and discovered my US Airways status had already been merged into my AA account – I now had Executive Platinum status!  And, unlike US Airways, AA lets you see your available international upgrade certificates online (www.aa.com/loyalty/profile/summary).  Yep, I had 8 certificates, as expected.  I immediately called AA to apply two of the certificates to my Beijing flight (details about my flight can be found here).  I had booked business class, but hoped to fly in first class.  They were able to upgrade my return flight immediately, but my outbound flight was waitlisted.  I’ve been told that upgrade space often opens up very close to departure, so I’m hopeful.  If it doesn’t clear, I’ll be fine in business class.

The two recent upgrade experiences described above made me realize how valuable it is to have both AA Executive Platinum status and the Citi Prestige card.  With both, I can book economy international flights on AA or US Airways, pay with ThankYou points at a very reasonable rate, and, when lucky, upgrade to business class.

The maps below show many of the international routes that are available.  Complete route maps can be found on AA.com and USAirways.com.

The maps above show excellent coverage of Central and South America, good coverage of Europe, and reasonable coverage of east Asia.  Let’s spot check a few routes to compare the price in ThankYou points to award prices…

To estimate ThankYou point prices, I somewhat arbitrarily picked a middle-ish starting point and a popular summer-ish time of year: I looked at prices in July for flights from Chicago to various destinations.

* Award prices are round-trip MileSAAver level prices (which are not always available).  AAnytime awards tend to be around double in price.

As you can see, above, the cost for each economy flight using ThankYou points is usually less than the cost in AA miles to book business class.  And, in some cases, the cost in ThankYou points is very close to the economy award mileage cost.  Since economy awards are not upgradeable, and since awards booked with miles do not earn miles or elite credit, the flights booked with ThankYou points are considerably more valuable.  That doesn’t even take into account the fact that awards are subject to additional booking fees and fuel surcharges, whereas the ThankYou point price is the all-in price.

To flesh this out a bit, let’s take the route from the table above that shows the least value in ThankYou points compared to AA MileSAAver awards: Chicago to Rome.  There, the ThankYou point price (111K) is higher than economy (60K) and business (100K) awards.  Suppose our goal is to fly to Rome in July in business class.  We already know that the ThankYou point price (for those with a Citi Prestige card) is 111,262.  Most travel dates are currently available at that price and the flight is non-stop.

Now let’s look at business class award availability in July.  A few MileSAAver dates are available for the outbound:

However, the return looks bleak:

Given the above availability, let’s plan to fly July 5th to July 16th.  Unfortunately, outbound flights are on British Airways (which means high fuel surcharges) and they require an overnight stay in London:

Return flights are just as bad:

The final price (not counting the price of hotel stays in London) comes to 100,000 miles plus $645 in fees.  Clearly the 111K all-in ThankYou point option is much better.

We could, of course, go with other airline miles, such as United.  United doesn’t charge any fuel surcharges on awards so the cash portion of a United award would be substantially lower.  Saver award prices for this route would range from 115,000 to 140,000 miles (depending upon whether the transatlantic flights are on United or a partner).  Those prices are higher than the ThankYou point price and would not earn miles.  Plus, very few Saver level awards are available during peak summer travel.

On the other hand…

Overall, I think that the Prestige card paired with AA Executive Platinum status is a killer combination thanks to the ability to book economy flights for any time and any destination and upgrade to business class with systemwide upgrade certificates.  Importantly, those same flights would get you closer to re-upping elite status for the next year.  That said, there are a few downsides..

• Upgrades are not certain.  It appears that AA makes very few seats available for upgrade until very close to departure.  So, most of the time, this approach will be a gamble: book an economy flight and hope to score the upgrade.
• Flights are not changeable / refundable. One big benefit of AA Executive Platinum status is that award change and cancellation fees are waived.  The same is not true of paid nonrefundable flights (which is what you would get when you pay with ThankYou points).
• Awards are not limited to AA and US Airways flights.  Miles can be used to book awards on any of their partner airlines, but paid upgradeable flights must be on AA or US Airways.  So, many more flights are available for mileage awards, and in some cases the experience would be much better as well (via Cathay Pacific, for example).
• Awards can be booked into First Class. If you’re looking to fly in ultimate luxury, booking first class awards is the way to go unless you find an outrageously good price for business class and upgrade from there.

Why the Prestige card?

There are a number of bank credit cards that let you pay with points for airfare, so one might wonder why I’m singling out the Prestige card.  For example, the BarclayCard Arrival Plus card earns two points per dollar on all spend, has a great signup bonus, and it automatically gives you a 10% rebate on points used for travel.  Plus, Arrival points are redeemed after you pay for travel rather than as a means to pay for travel.  Let me explain… cards like the Prestige card let you use points to pay for travel, but to do so you have to go through the bank’s rewards website to find flights and redeem points.  With the Arrival card (and some others, like the Capital One Venture Rewards card), you use your credit card to pay for travel directly, then use points after the fact to pay for those charges.  This means that you would earn both airline miles and Arrival points for flights paid for with Arrival points.  And, you can increase your rewards by going through a portal to an online travel agency (Orbitz, for example) to book your airfare.  With ThankYou points, conversely, you earn only airline miles when using points to pay for flights.  And, don’t forget, the Arrival Plus card costs only $89 per year whereas the Prestige card costs up to $450 per year.  That’s a huge difference!

All of the above are good reasons to prefer the Arrival Plus card over the Prestige card, and that was just one example of a competing card.  I could write an entire post (or three) on alternatives.  Let’s look, though, at the reasons I like the Prestige card and the ThankYou points program…

ThankYou points can be shared.

Points can be transferred, for free, from one account to any other.  This means that not everyone needs to have the Prestige card to benefit from its high value for booking AA flights.  You just need a friend or family member willing to book the flight for you.  Transferred points expire after 90 days, though, so you should not initiate a transfer until you have concrete plans for using the points.

ThankYou points are incredibly easy to get

The Prestige card’s signup bonus goes as high as 60K (found in-branch); the Premier card regularly offers 50K; and the Preferred card often offers 30K.  Each card has category bonuses that increase points earned from spend.  And, it is easy to get very lucrative retention offers.  See: How one call led to a points bonanza and rethought plans and 5X ThankYou offer returns… sort of.

The Prestige card has valuable perks

• Free AA / US Airways lounge access when flying AA / US Airways
• Free Priority Pass Select membership (which, unlike with competing cards allows up to 2 guests in free with you)
• 4th night free hotel rebate
• $100 Global Entry application fee credit
• Complementary golf green fees

The Prestige annual fee can be lowered to $350

When you signup in-branch, it should be possible to qualify for a $350 annual fee.  If you’re stuck with the $450 annual fee, though, you can lower the fee to $350 by signing up for Citigold Checking.  Unfortunately, Citigold Checking has high fees unless you have combined balances of $50K or more.  One work-around, found by Doctor of Credit, is to open a CitiBusiness® Preferred Banking account.  The CitiBusiness account is free when you maintain a $15K average monthly balance, and it gives you Citigold Checking fee-free.  Citigold checking also offers Prestige cardholders a 15% annual relationship bonus.  In this way, it makes your Prestige card more valuable.  Plus, you can often earn ThankYou points for signing up for Citigold checking too.

The Prestige annual fee can be lowered to $100

The Prestige card offers an automatic $250 Air Travel Credit each calendar year.  This means that anytime you use the Prestige card to pay for air travel, your account will be reimbursed up to a total of $250 per year.  Since the card offers 3X points on Air Travel and Hotels, it’s a no-brainer to use this card to pay for flights anyway, so I think of this as an automatic $250 per year rebate on the card’s annual fee.

The Prestige card annual fee can be better than free (if you decide not to keep the card)

If you signup for the Prestige card mid-year and earn your $250 Air Travel Credit both this year and next year, you can still cancel or downgrade the card before paying the next annual fee if you decide you don’t want to keep the card.  That means that the Air Travel credits will have more than paid you back for the annual fee regardless of whether you paid $350 or $450.  Tip: downgrade to the ThankYou Preferred card so as to keep your remaining ThankYou points active and to potentially receive valuable retention offers.

Summary

I currently have AA Executive Platinum status and I carry a Citi Prestige card, and I think that the combination is terrific.  The Prestige card increases the value of my ThankYou points (when I use points to pay for AA airfare); and my Executive Platinum status means that I can book economy, but fly business class.  And those two benefits feed each other:  The Prestige card makes it a better deal to fly AA with paid tickets (paid with ThankYou points) than to use AA miles to book awards.  And, this makes it easier to maintain AA elite status.  In turn, AA elite status makes the Prestige card more valuable because one can book economy flights with ThankYou points, but fly up-front thanks to regional and systemwide upgrades.

For those wondering… no, I’m not trying to “sell” the Prestige card to anyone.  I currently do not have any Citibank affiliate links.  Even if I did – you’re better off signing up for the card in-branch.  I truly believe that the Prestige card is an excellent card, especially for frequent American Airlines travelers.

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