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For years, the best deal for booking domestic flights was usually finding award availability via a foreign airline partner and using those British Airways, Virgin Atlantic, or Avianca LifeMiles (for example) to book your domestic tickets on America, Delta, or United. That was either because foreign programs charged fewer miles for the same awards, had better change or cancellation fees, or in many cases both of those things. However, many searches for domestic flights over the past couple of weeks have led me back to a conclusion long-accepted by many who primarily travel domestically: very often, the best programs for booking domestic flights are bank points that can be used to good value to book paid tickets. Awards tickets often just aren’t compelling these days unless cash prices are very high and saver availability also exists. There are some exceptions and some wrinkles in the book-with-bank-points playbook, but overall I am finding it increasingly difficult to turn away from the value of using bank points or cash back to book domestic flights. I found this to be true across each of the major US airlines. While this could obviously vary depending on routes or dates, I was struck by how often it was true based on searches I’ve done recently.
Here are some examples of what I mean.
Delta
One of the challenges from the GUC trip Greg and I are hoping to take is for me to get meaningful Delta elite status from that trip. Assuming that indeed happens, I’ll want to actually fly Delta domestically in order to take advantage of my status (or position myself to move up in status depending on how it works out). Given the various bonuses Delta is offering this year as shortcuts to elite status and the fact that the increased MQMs I could earn this year will roll over to next year, I was considering flying Delta to the west coast for a family wedding this fall. On the dates I searched from my small market home airport to a major west coast airport, here were the prices I encountered in terms of cash, Delta SkyMiles awards, and using Amex Membership Rewards points (prices shown are net prices assuming you have the Business Platinum card and have selected the correct airline) or Chase Ultimate Rewards points (prices shown assume you have the Chase Sapphire Reserve).
Economy class
- Cash price: $157
- Award: 10,500 Delta miles + $5.60
- Amex points: 10,205 with Business Platinum (net)
- Chase points: 10,467 with Sapphire Reserve
Premium economy
- Cash price: $317
- Award: 24K Delta miles + $5.60
- Amex points: 20,605 with Business Platinum (net)
- Chase points: 21,133 with Sapphire Reserve
Business
- Cash: $1807
- Award: 115K + $5.60
- Amex points: 117,455 with Business Platinum (net)
- Chase points: 120,467 with Sapphire Reserve
As you can see above, in all but the business class example, flights cost fewer net points when using either Membership Rewards (with the Business Platinum for that card’s pay-with-points rebate) or Chase Ultimate Rewards. Even in the business class example (where the cash price of this flight was insanely out of whack with the market) the results are still pretty close. I left that crazy business class price in there rather than selecting a more reasonably-priced alternative to make the point that the flexible points were looking good at that outlier end of the spectrum also.
And that’s ignoring the fact that paid tickets earn miles – both redeemable and status miles. In Delta’s case, even award tickets earn credit toward elite status this year and next year, but only paid tickets earn redeemable miles. That would bring the net cost down further yet depending on how you value the miles and whether or not you have status with Delta. This wasn’t an isolated situation, it’s just one example of a phenomenon I saw over and over. I found this particularly interesting with premium economy / Comfort+, where I had thought that Delta awards in the low 20K’s per passenger sounded reasonable to me. Award tickets still weren’t as good a deal as using bank points.
Ok, but that’s just Delta and there are no good partner sweet spots left to book those same flights for fewer miles. How about short-haul American flights or what about United?
American
I expected the story would be a bit different on very short American Airlines flights. British Airways was long the best way to book short nonstop American Airlines itineraries since they used to start prices from 4,500 Avios one-way. However, flights within North America now start at 7,500 Avios one way. Even after that change, Iberia remained your best bet for very short itineraries – even connecting ones – since Iberia charged based on cumulative distance flown (see: From 11K RT on American: A sweet spot for North American flight redemptions for a short trip down memory lane). Unfortunately, while you were sleeping not paying much attention to partner redemptions for domestic economy awards, Iberia stopped pricing cumulatively and increased rates to be the same as British Airways (from 7500 Avios each way). If your next thought is “Hey, Qantas also has a distance-based chart that is useful for short flights”, I’ve got bad news: the shortest ones are 8,000 points in each direction (more than British Airways or Iberia charges).
Still, I had in mind to test a very short itinerary so I stuck with the plan and searched Dallas to Houston on a Friday this fall. The details were nearly identical in the reverse direction.
Economy class
- Cash price: $79
- Award: 6,000 AA miles + $5.60
- Amex points:
5,1354, 472 with Business Platinum (net). (Note: This was available as an “insider fare”) - Chase points: 5,267 with Sapphire Reserve
Premium economy
N/A
Business/First
- Cash: $184
- Award: 16,000 AA miles + $5.60
- Amex points:
11,96010,273 with Business Platinum (net) (Note: This was available as an “insider fare”) - Chase points: 12,267 with Sapphire Reserve
An interesting note to me here was that even if Iberia still had its old award chart where this would price at 11K round trip in economy or 22K in business, Amex or Chase points would still be better in economy class and very close in business. And again you would earn miles booking the cash fare with bank points.
United
United must surely be the exception, right? Since Turkish Miles & Smiles offers United economy for just 7,500 miles one way or business class for 12.5K one way, there must be situations where the award ticket would be the best bet.
Sure enough, Turkish did come out a winner when I tried especially hard to give them an advantage: I found a day in September that has award availability on the nonstop from Los Angeles to Newark in both economy and Polaris business knowing that this would be expensive enough (at least in business class) to balance things out.
Economy class
- Cash price: $119
- Award: 7,500 miles + $5.60 via Turkish (from 9,700 United miles)
- Amex points: 7,735 with Business Platinum (net)
- Chase points: 7,933 with Sapphire Reserve
Premium economy
N/A
Business/First
- Cash: $639
- Award: 12,500 miles + $5.60 via Turkish (35K United miles)
- Amex points: 41,535 with Business Platinum (net)
- Chase points: 42,600 with Sapphire Reserve
Interestingly, Turkish only really shined on the business class flight in this case. In economy class, while you’ll save a few hundred points by booking a Turkish award ticket over using other points to book the ticket, keep in mind that you’ll also pay $5.60 in taxes with Turkish — meaning that the net cost of booking through Amex or Chase is still a bit better even before you factor in the ability to earn miles and elite credit. In fact, if you buy that economy class flight through Amex or Chase and credit it to Turkish, you could earn more than 1200 Turkish miles on the flight paid with your points — making the net cost much better than an award ticket. On the flip side, if this had been a very short-distance flight, the award price through Air Canada’s Aeroplan would have started at 6,000 points. In cases where flights are around a hundred bucks or less, bank points will still be the better deal — but Aeroplan will come out ahead sooner on those short United itineraries. On the flip side of that coin, if the cash price of an economy class ticket is much more than $119 one way, Turkish will beat out bank points all day long when awards are available and bookable.
On the business class flight, it isn’t even close: if you can find business class availability on a premium transcon route, Turkish is impossible to beat. Yes, I did verify that my example flights were showing as available on the Turkish website. Yes, the website is still missing a payment button so you wouldn’t be able to book online. *Sigh*
But the advantage of using bank points isn’t without drawbacks
Based on the above, you might think that I am 100% committed to using bank points on my domestic flights rather than booking award tickets (at least in situations like these where the bank point-purchased tickets cost fewer net points. However, the reality is that it isn’t quite so simple.
First, I made no effort to cherry-pick examples for this post (apart from the United Polaris example where I knew it would give a counterpoint to the trend), but surely there are situations where cash prices will be far more expensive and then award tickets will make more sense. Still, the trend has been clear at least based on my searches. I have been doing a lot more trip-dreaming (can’t really call it planning yet) and searching both award and paid tickets lately and I’ve found this trend has held over many markets and routes. But I know that awards will sometimes be a better deal.
And if you already have airline miles sitting in an airline account (especially one where the miles are in danger of expiring someday), it would certainly make sense to put those to use before using up flexible points when prices are close.
But booking paid flights with bank points instead of booking award tickets with miles comes with another key drawback in terms of flexibility. Whereas the major US airline programs are allowing free cancellation/redeposit on award tickets (in United’s case it requires cancelling 30 days in advance) that will put your miles back in your account to use when and how you please (potentially years down the road and for a family member or friend), cancelled paid tickets don’t yield nearly the same flexibility. Even though most airlines are currently offering free cancellations, you’ll end up with a voucher that has a finite expiration (and perhaps must be used by the original named traveler). In today’s uncertain travel environment, that’s potentially a big gotcha.
In fact, that gotcha has had me hesitating on those Delta flights that I’d kinda like to book this fall. Due to the way Delta is offering increased earnings on flights this year, I’m pretty interested in booking either Comfort+ or First Class for my family’s trip out west for a family wedding (I’m currently sorta booked on Southwest but not really thanks to their shenanigans). My first instinct was to transfer Membership Rewards points to Delta to book award tickets since award tickets are earning MQMs and MQDs. Then I realized that it would save me some Membership Rewards points to book paid flights and I’d also earn redeemable miles. Using fewer points and getting back redeemable points sounded like a no-brainer at first blush. But then I asked myself what happens if we’re not able to travel — either due to one of us getting sick, the wedding getting postponed, or the COVID situation deteriorating to the point where we’re not comfortable flying with our as-yet-ineligible-to-be-vaccinated kids. There are a lot of non-zero-chance things that could go sideways and force us to cancel….and then we’d end up with a big Delta voucher. I’m not terribly excited about trading Membership Rewards points for a Delta voucher that has to be used by 12/31/22, especially not at just 1.5c per point.
As a result, I’m stuck in a moment of inertia — waiting and seeing what happens because I know that the best deal for booking my domestic flights is not booking an award at all but I’m just not sure enough about fall travel yet to commit to paid flights. Indeed, one of my favorite intangible things about award travel in general is the flexibility. I don’t miss the days before I discovered award travel when every trip I booked was a nonrefundable arrangement and that’s the part of bank points that has me spinning my wheels right now. I guess I could go for refundable fares through Amex as an alternative, but then I’m back to the drawing board in doing the math.
Bottom line
There are certainly times where booking an American Airlines award through British Airways or United through Turkish or LifeMiles or maybe even Delta through Virgin Atlantic will be your best bet, particularly at the last minute or other times when cash prices are high and saver awards are available to partners. However, more and more often, I’m finding that with variable award pricing, it is very hard to beat bank points for domestic award tickets. You’d think that this concept must have been much truer during the time of “standard” 12.5K domestic awards and that variable award pricing might have since changed the math on that, but then on the other hand if you read Greg’s posts analyzing the value of airline miles for domestic award tickets you would be less surprised that those miles aren’t beating 1.5c per point. As it stands, banking bank points is your best bet more often than not for domestic award travel.
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We booked business class on Delta to Greece from the US (cancelled due to covid). We paid for the flights via some US dollars and the majority in AMEX Platinum points. Since the payment was done by 2 methods, Delta could not figure out how to issue the refund of approx. $8K. It took them over 6 months to finally get it figured out. Everyone else booked through a travel agent and had a full refund in 1 week. In talking with AMEX customer support and Delta at GREAT length, we discovered it’s better to keep payments in 1 form of currency.
Great article. Because of Covid, I just canceled a trip to Greece this week on Delta. Voucher only. I went all the way up the line (not easy, hard to get anyone on the phone) and they refused to refund. I have 2 more Delta flights coming up and not looking forward to all of these vouchers if I have to cancel. I will say that Chase was fabulous. Even with the non-cancelable hotels they put me on hold and spoke to them – got the refund of points. I regret not using points for the flight.
If you’re not going to use Delta miles in the economy situation, then when would you ever use them? No point accumulating miles if you’re never going to use them. That’s why I heavily bias against paying cash. If you’re frequently choosing to pay cash instead of burning points, then you probably need to reassess your point valuations and redemption floor.
If paying with bank points or cash for a Delta flight, you don’t have to credit the miles to Delta. You could credit to Virgin Atlantic, for example. If crediting to Flying Blue, pay special attention to the gotchas involved when both crediting flight miles and transferring miles into that program.
1) Look at the best schedules on google flights (plus Southwest sometimes). I consider one stop from my closest airport if no nonstops exist and will consider driving to the larger airport 75 minutes away it that means nonstop or a significantly better product.
2) Look up award availability on the airline(s) with the best schedule, also considering price and product. Try to use TK miles if UA first is a good option. BA miles for shorter AA flights and EY miles for 3 cabin AA flights (prices same as 2 cabin). AF miles for Delta first. Or the native program when those are a good value.
3) Pay with miles if that is a better deal. Pay with Chase UR or Amex MR if cash prices are a better value. I bank airline miles with AA, EY, AS, BA, B6, DL, AF, VS, UA, TK, and AV earning primarily through their online shopping portals or/and transferring in from bank programs.
4) These days when booking far out as I usually am, I am likely to book cancellable tickets each direction on more than one airline, then keep the better schedule once it become clear what the schedules will actually be and cancel the other.
5) Monitor prices and get adjustments if prices go down.
My next seven already booked vacations involving airlines (four are international) are all on points. I will do this even if I can use fewer points through the Chase UR portal because to me, the ability to make a trip “go away” if necessary with minimal or no cost is essential until things start to calm down out there. Similarly, all seven trips are nonstop flights to my final destination, which is intentional. Too much uncertainty in the system for my taste right now. I had to cancel many amazing trips due to the virus in the past and have no assurance it won’t happen again in the future.
Yeah, that’s the tough part for me. With two kids, I’m having a hard time knowing whether I’m going to fly with them 2 weeks from now forget about 2 months from now. I assume all of our trips for at least the rest of this year if not longer will be game-time decisions that are hard to predict in advance. I don’t really want to be stuck with a Delta voucher if we cancel stuff since we usually just fly Southwest domestically.
Yes. So IMO Greg’s $50 estimated annual valuation for the AmEx Business Platinum’s 35% pay-with-points rebate on the “Which Premium Credit Cards are Keepers” worksheet is low.
VEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEERY INTERESTING!
“And that’s ignoring the fact that paid tickets earn miles” – I see this often in value discussions. Fair point about status if that’s what you’re seeking, but one mustn’t forget that these miles will have to be redeemed, often for bad value like with Delta, eventually. In other words, if you always choose paid ticket because if this then when are you actually redeeming?
Redeeming the points you’ve earned from paid flights is different than transferring flexible points to book. Like I said in the post, if you have existing miles in one of these airlines it certainly makes sense to use those. For example, if you have Delta miles from paid flights (or cancelled travel), by all means use those before you transfer points from Membership Rewards or book using Membership Rewards points. But if you have a pile of Membership Rewards points and you’re considering a transfer to Delta to book something, keep in mind that you can usually pay fewer points by booking through Amex with your points if you have the Business Platinum card (and you’ll avoid paying the excise tax that Amex charges on transfers to domestic programs, which I didn’t address).
The miles you earn from paid flights are worth *something* even if the value is poor. So if a flight costs 50,000 Delta miles or 50,000 Amex points but by using Amex points to book through Amex Travel you’ll earn 4,000 Delta miles, booking through Amex is clearly the better deal. Since Delta miles never expire, you can keep holding them until you have the miles to get yourself a flight you need and avoid using Membership Rewards points.
I see you avoided Southwest Airlines. While they don’t fly everywhere you need to go, when I need to travel to a Southwest city I skip my happy ass down to Office Depot and buy a gift card with my Chase Ink. This gives me 5X UR points and 2% cash back with Dosh up to $10 per day. (Recently 6%). Southwest also regularly has fare sales which sweeten the pot even more. 2 free checked bags, no change fees, no phone rep fees, plus every seat is first class! At least that’s what they tell me when I ask.
I did because their miles are worth an even more constant less-than-1.5c for domestic flights.
That’s not to say I don’t appreciate Southwest. Many regular readers probably know that I almost exclusively fly Southwest domestically because we’ve been Companion Pass holders for the past 6 years. I’ve written before about how Southwest can offer better value than other airline programs. And your strategy is definitely a good one.
With this post, I was focusing on the 3 major carriers because those are the ones with many foreign partners. Traditionally, using partner miles to book AA, Delta, or United flights was a better deal than using AA, Delta, or United miles and I think many of us trained ourselves to expect the best deals on flights to come through those partner redemptions. However, I’m finding that old “universal truth” is less universally true these days.
Nick — how do you have access to multiple airlines in economy using business platinum with the rebate?
I don’t — I was just providing the example as to what it would cost. I couldn’t do that with all of them — just illustrating how much cheaper it could be if that was your chosen airline (good point that I should clarify that).
Rats! I thought you had some secret trick.
Multiple business platinum cards would be the way (not saying Nick has this, just giving you a way to do it).
I learned a lesson, the hard way, to never book flights using Chase UR travel. NO thanks. They’re Expedia and inept when it comes to cancelling international flights, you may as well kiss your $$ goodbye. Happened to me.
The biggest issue for me is having to deal with Chase UR Travel when cancellations or schedule changes happen. I’ve already given up hours of my life to inept agents overseas who have made airport / date mistakes, calculated credits incorrectly and generally been unhelpful.
The other big advantage to using airlines miles (other than free redeposits for US carries) is that you can cash out/invest UR/MR points. I’m not sure what the breakeven point would be for me to use UR/MR instead, but I think it would probably have to be 50% cheaper to compensate for these 2 advantages in order to use UR/MR instead of airlines miles.
Isn’t this by design, part of the reason for the overhaul of mileage programs a few years ago (from distance to spend$ was to make them profitable in their own right.
When you book with AMEX pay with points do you still earn MR since your card is typically charged and then credited? I know you don’t with Chase.
Also remember Altitude Reserve which definitely earns points on RTR redemptions. A $150 flight costs 10,000 AR points and you earn 450 points for the spend and are booking directly with the airline, no Chase or AMEX OTA.
With the AMEX Pay with Points, AMEX is strange and does an airline charge and an airline credit, which cancel each other out, so you don’t earn any points.