02
Feb

Using Miles for Domestic Flight Redemption (What are you, crazy?)

Posted By Trav

One of the most common questions surrounding frequent flyer miles and points is “how much are these worth”? And while the idea of value is a major part of every discussion about points and miles, the funny thing is that there is no clear answer.  Each person has different travel goals; one person may wish to use their points to fly to as many destinations as possible, eschewing business and first class to save miles, while another person is equally as content to spend more miles to fly more comfortably.  So, how to value them?

CPM:  The End All and Be All?

Many people will attempt to quantify the value of their miles using cents per mile (CPM).  To do this is, you take how much a ticket would cost if you were to buy it outright and divide that by the amount of miles you must spend instead for that same ticket.  While CPM is a good place to start, it certainly only tells part of the story.

For example, let’s look at flying round trip non-stop from Tokyo to New York in mid-February, a trip I may end up taking.  The cheapest nonstop economy ticket on American Airlines is $1527.  The amount of miles for that same flight is 50,000 since it is off-peak season (September-May).  This would equate to just about 3 cents per mile.  If we look at the same travel parameters for business class, the cost for the cheapest ticket jumps to $9911, whereas the cost in miles doubles to 100,000 miles, giving us almost 10 CPM.  By bumping all the way up to first class, the ticket price skyrockets to $26,588.  The cost in miles for the same flight in first is 125,000, leaving us with a CPM around 21.

If we are only looking for the best value through the lens of CPM, the first class ticket is a no-brainer and the economy ticket isn’t even an afterthought.  However, I would never even remotely consider purchasing a ticket for $9,000, let alone $26,000, which means that CPM alone cannot determine the best value for my travel needs.  Being younger and able to withstand the rigors of travel more easily, I would almost always choose the economy ticket, which would allow me to take the same trip twice for the amount I’d pay to take it once in business class.

Using Miles for Domestic Flights Is Awful Value, Right? 

The discussion of value and the best redemption strategy only intensifies when you begin talking about domestic vs. international.  Almost always, first class international travel will give you the greatest CPM, often by a longshot, simply because first class tickets are soooo expensive (tell me, is anyone actually PAYING for them?).  There are many out there in the travel world that cannot begin to understand why someone would redeem valuable miles for anything less than the optimum CPM, but I would argue that it isn’t always so cut and dry.

A perfect example of this came up while I was planning my winter vacation to Australia.  I booked for flights from Tokyo to Melbourne with Qantas on December 21st for 30,000 miles a person for my wife and I.  However, I ran in to a major logjam in attempting to get tickets home, as all award travel leaving from anywhere on the east coast of Australia was booked solid through January 11th, and I needed to be home the 9th.  I got creative and found flights on Jetstar, Australia’s most popular budget airline, from Cairns to Osaka for $600, leaving January 9th.  And while I’ve become incredible spoiled and always get annoyed by having to pay for flights now, this was my only option.

Now, the problem became getting to Cairns.  I’d be in Sydney on New Year’s and since we wanted 4 days at the Great Barrier Reef, so the latest I could possibly leave Sydney was the morning of January 5th.  Of course, booking tickets during the holiday season only 3 weeks in advance is never an easy (or cheap) task, and even Jetstar, whose tickets between Sydney and Cairns traditionally run at about $130, was going to run us $400 a person.  Shelling out another $800 had me in an awful mood until I had an idea:  what about using miles?

Could using my hard-earned miles on a domestic flight possibly be worth it?  I checked the OneWorld reward chart (I’d be using American Airlines miles but flying Qantas) and was elated to see that a one way domestic ticket within Australia would cost me 10,000 miles a person.  I called, found availability for the evening of January 4th, and booked immediately.  After taxes and the booking fee, the total paid was $90, saving me $710 off the Jetstar price.  Since I was using 20,000 miles, I was getting a 3.5 CPM!  And while this was not the crazy 21 CPM of the above first class example, it is exactly what I NEEDED for MY travel (and pretty good for a domestic flight, to boot!).

So yes, domestic redemption can be worth it, especially when you make use of it at peak times when prices on tickets, even on budget airlines, are inflated.  And remember, it isn’t always the highest CPM that determines the value of your miles, but the best use of those miles for YOUR specific travel.

Three Takeaway Points:

  • CPM is a good place to start when talking about value, but don’t let it completely cloud your thinking.  It can be easily skewed by exorbitant prices on flights you wouldn’t ever think of taking.
  • Domestic travel is often eschewed as “not worthy” of using miles on, but if you use them during peak times, you can actually get a good value (CPM-wise).
  • Use your miles for what works best for YOU.  If you’d rather use your miles to see your grandma in Pittsburgh than lie on a beach in Bora-Bora, then do it.  You’ve earned them, use them how you want!

Have you used miles before on a domestic redemption, and if so, why?  Do you hate the idea of people using miles and not maximizing CPM?  Got a grandma in Pittsburgh?  Comment below!

2 comments

  1. Jack says:

    I drank the Flyer Talk koolaide on this issue some time back, but what is sometimes missing in the discussion is that plenty of travelers can’t or don’t plan their flights months in advance: things come up, both opportunities and needs. A close in domestic flight ticket can be exhorbatant, in in these cases, ( and generally only in these cases) I am willing to consider a reward/points ticket vice a cash purchase ticket, particularly if it is for my wife, since her travel does not get me Elite Qualification Miles anyway.

    1. Trav says:

      I agree. There is no “one size fits all” attitude when it comes to using YOUR miles and points. What is smart for one person isn’t always smart for another person, and so on. While I generally think using miles for domestic redemption isn’t the wisest way, there can be certain times when it makes alot of sense, such as your example and the one I mention in the post. In the end, if you use your miles to make you happy, that is all that really matters.

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