Frequent Flyer Miles: To Redeem or Not to Redeem

Even when flying with a legacy carrier, air travel is more affordable than it was a decade ago and an increasing number of carriers today are now displaying their advertised fares as "all-in" either as required by law or as a gesture of goodwill. These all-in fares include mandatory charges such as taxes and surcharges imposed by the carrier in their final 'promo' prices. While in many cases, what you see is what you end up paying, it is important to investigate further to better understand the cost breakdown of fares. In the case of frequent flyer mile redemption, it can help save you both money and miles.

Screenshot from the Scandinavian Airlines booking engine
Let us explain why. The price indicated in the image above is an actual fare offered for a one-way Scandinavian Airlines flight from Copenhagen to Paris. The final price amounts to £42.50. That's almost ₱3,000.  Overall, it's not bad for an almost two-hour flight within Europe. But if one looks at the slightly smaller print in more detail, £30.50 or almost 70% of the final price is attributed to mandatory charges such as taxes and carrier imposed fees, while the base fare is a mere £12.

If a carrier is only charging £12 (approximately 900) for a ticket, there is minimal room left for an airline to reduce their ticket prices further. It is already considered a bargain to fly on a legacy carrier for such a rock bottom price. Philippine Airlines used to do this in 2009 when it offered base fares between Manila and Singapore for as little as US$8.

To save money further, passengers often consider redeeming their frequent flyer miles in order to get a free flight. But the real question is whether it is worth it to redeem your valuable accumulated miles to save a minimal amount. In the case of the flight above, it would cost 12,500 miles for this one-way flight, assuming that one-way mileage redemption was permitted. Based on the £12 fare, one is spending 1,042 miles for every £1 saved.

Unfortunately, as most frequent flyers know, these flights are anything but "free." While the flight itself may come at no charge, the passenger is still responsible for paying the mandatory charges such as taxes and airline imposed fees. After all, a government would not want their aviation-related taxes paid in frequent flyer miles. Therefore, if one used their frequent flyer miles for this very same flight, they would still end up paying £30.50 for the flight from Copenhagen to Paris. When surcharges alone account for 70% of the final ticket price, one must question if whether using miles is practical.

To illustrate this point further and highlight the importance of reviewing the breakdown of charges in detail, here are a couple of examples from the KLM and Delta Airlines website for a round-trip flight from Bristol to Amsterdam. These are the exact same flights offered on the exact same dates. Compare the cost of the Delta booking using mileage redemption versus the cost of the KLM flight without mileage redemption:

Screenshot from Delta's booking engine
Using Delta miles for a KLM flight will cost £120, including a £62 fuel surcharge
Screenshot from KLM's booking engine
Paying for a KLM flight with cash costs only £89, including an £18 surcharge
As you can see from the two screenshot examples above, the very purpose of redeeming miles -- to save money -- is undermined by the excessive surcharges imposed by Delta.  KLM, which ironically operates the very same flight, can offer a much better deal without the passenger even having to redeem any miles. In addition, the fuel surcharge is surprisingly considerably lower when you book on KLM, as opposed to through Delta. One would have assumed that it would have been the same given that KLM was operating the flight in either case but this just illustrates the point further that travellers must be diligent and do their homework when booking travel to avoid getting "ripped off."

Overall, when it comes to regional or short haul flights, you may want to reconsider using your frequent flyer miles particularly when you are in a country with a presence of low cost carriers. You might just end up paying more by using the miles. This is particularly true when the actual fare associated with a flight represents less than half of the total amount paid after all surcharges and taxes are factored in.

Even industry experts acknowledge that fuel surcharges have hurt frequent flyer members a lot as they often end up paying just as much if not more than those who booked a regular ticket at a promotional price. In short, before surrendering your hard earned frequent flyer miles, be sure to consider the alternative offers out there and pay attention to the base fare and mandatory surcharges. It might just end up saving you miles and money.

-HybridAce101

Do you need help determining whether to use your frequent flyer miles or not? Share your stories with PFN below and let our community help!

8 comments:

  1. I think the benefits of frequent flyer miles can be maximized if you redeem "free" tickets on long-haul flights. 90,000 miles only for a MNL-LAX-MNL business class ticket on PAL with approximately US$400-500 fuel and other surcharges is already a good deal. Regular ticket costs around US$2,800 (promotional) to US$3,600 (regular discounted)

    ReplyDelete
  2. Assuming that the regular ticket of US$2,800 has a break down of US500 (fuel and other charges) and US$2,300 for the base fare. US$2,300 x PHP45.00/US$ = PHP103,500 / 90,000 miles = P1.15 only per mile.

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  3. its better to use the miles to book business class tickets rather than just economy.

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    Replies
    1. Easier said than done for FFPs that have expiration dates.

      Delete
  4. This comment has been removed by the author.

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  5. The internet is a great place to compare fares. As a general rule that I use:
    1. Compare fares on a per route basis
    2. Compare with a fare using your miles
    3. If you can save more than 25% or can buy a night's worth of hotel accommodation then but the cheaper option.

    Always works for me

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