“Newbie” Question: What Is Good Value?

Hands down, one of the best uses for Air France/KLM Flying Blue Miles is booking flights during their monthly Promo Awards. During these sales you will find award flights that have been discounted (between 20-50% off) for travel on Air France and KLM.

This morning I posted an article titled “Business Class to Europe for 40k miles” where I highlighted the routes that are currently on sale with Flying Blue Promo Awards.

I said in the article, “this list isn’t anything to get too excited about but if you see something that sparks your interest…GO FOR IT!” After I posted the article, a subscriber that describes themselves as a “newbie” sent me an email that asked if it was “a good use of points?”

I thought this was a good question that deserved another post and could assist other “newbies.”

Before we get started, let me say, there are ways to redeem miles that are good. There are ways to redeem miles that…aren’t as good (from a value standpoint).

TRAVEL GOALS

Everyone has different travel goals. For example, I have a family and a large majority of my points are redeemed for family trips (e.g. Disney World). I assume you have other bucketlist destinations that rank higher than Disney (e.g. The Maldives). I can guarantee that you will extract far more “value” traveling to the Maldives than I ever will traveling to Disney. However, at this point, Disney is far more entertaining and satisfying than the Maldives for my infant daughter so extracting value from my points may be different than yours.

SO WHAT IS GOOD VALUE?

To extract the most “value” from your points, typically, the best route is to use them for a high value award.

EXAMPLE #1: Let’s say you want to fly ECONOMY, one-way from New York (JFK) to Paris (CDG), and the options are 1) pay $300 or 2) redeem 10,000 miles for your flight. If you decide to use your miles, the value that you are receiving is 3 cent per mile (cpm) [$300/10,000 points].

Now, let’s focus on a different example…

EXAMPLE #2: Let’s say you want to fly BUSINESS, one-way from New York (JFK) to Paris (CDG), and the options are 1) pay $3000 or 2) redeem 50,000 miles for your flight. If you decide to use your miles, the value that you are receiving is 6 cent per mile (cpm) [$3000/50,000 points].

In other words, the greater the CPM, the more “value” you are extracting from your miles.

POINTS STRATEGY

In the small world of points and miles, you will hear many people boast about how many CPM they were able to obtain from a redemption. However, it’s difficult to compare CPM’s because airline prices change by the minute.

If the options (in example #2), were instead pay $10,000 or redeem 50,000 miles and you redeemed the miles, you would be receiving 20 CPM.

Am I still sitting in the same seat? Yup.
Did I receive anything extra for the $7000 difference? Nope.
Did I receive a greater “value?” On paper…yes, 20 is greater than 6.
Did I receive a greater “value” in real life? …*Kanye shrug*

For many people, including me, $3000 (or $10,000) is an obscene amount of money for a one-way ticket to ANYWHERE in the world. However, with the right credit card and points strategy, 50,000 miles can secure an aspirational flight product that would otherwise financially be out of reach.

THERE IS NOTHING WRONG WITH FLYING ECONOMY

Let me be clear, redeeming points for a business class (or first class) flight can be great, particularly, if your bank account isn’t setup for a $3000 withdrawl. However, don’t overlook economy.

Let’s revisit PROMO AWARDS list from this morning…

You’ll notice that flying from Boston to Europe (in economy) is on sale for 17,250 miles + taxes. Ironically, I need to fly one-way from Boston to Stockholm during the eligible travel dates. I logged into my Flying Blue account and completed a search and this is what I found…

16,125 miles + ~$100 looks good. Unfortunately, my schedule is not flexible with dates so if I were going to pay cash, these are the lowest prices…

So my options are:

  • $306 on Norwegian UK with an 8 hr layover in London and I still have to pay for bags because it’s a low-cost carrier
  • $595 on Iceland Air with a layover in Iceland or;
  • 16,125 miles + ~$100 for this flight…

I have a friend that recently moved to Paris and with an 8 hour layover, we could catch brunch. Personally, that’s a win-win. I save money, I am able to get brunch with my friend in Paris, and I arrive at my final destination. I’ll go with Air France.

FINAL STAMP

The examples above were a simplification of the process and those numbers are not indicative of the costs for all airlines.

But here is the bottom line…DON’T LET ANYONE DETERMINE WHAT IS GOOD VALUE FOR YOU! Use your miles for YOUR aspirations and bucketlist.

I enjoy flying business class but I also recognize that airlines from around the world have different products so I don’t mind flying in economy.

Internationally, Singapore airlines has, arguably, the best economy product in the world and serves very good food.

Domestically, I fly Southwest Airlines all the time and appreciate the fact that there’s enough legroom for me to open my laptop and pump out a blog or two without a purchasing an ‘economy plus’ or ‘main cabin extra’ product.

It is also worth considering your future travel goals for how you will spend your points. What is more important…quantity or quality?

And if you’re curious about how many points you can obtain from credit cards CLICK HERE.

So what are your goals for your miles? Disney? Maldives? Somewhere else?

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