|

Fly Economy or First Class?

The question has been asked frequently about whether it is more worth it to redeem your hard earned miles for economy or first class. Some people would argue that they rather have more trips, so economy. Others want to be able to redeem for a First Class or Business Class treatment that they would otherwise not pay for normally.

I enjoyed reading a post by fellow Canadian BoardingArea blogger Avery from DCTA entitled Top Three Tips for Points and Miles, especially the tip You’re Probably Better Off Flying in a Premium Cabin. I completely agree that you can get more value when redeeming your miles for first class travel would get you more value than economy travel. Avery does a great job explaining the math. Basically it comes down to, the cost of paying for First Class can be 4 or 5 times more expensive than paying for an Economy fare. However, it may only cost twice as many miles to redeem for a First Class fare than an Economy ticket. That’s the main reason why it is more worthwhile to redeem for a First Class flight if you value this option.

I would like to supplement what he wrote by adding the factor of travel habits.

Depends on How you Earn your Miles

I must admit, I hardly ever earn miles through every day spending. It represents less than 10% of my overall earnings in a year. Most of my miles earned are from sign up bonuses, referral bonuses, surveys and presenting my loyalty card at a sponsor (like Aeroplan at Esso gas stations or Home Hardware). Personally, I do not depending on annual spending to rack up the miles.

Even if I spent $30,000 per year, even if I averaged 1.5 mile per dollar spent, it would come out to 45,000 miles. I have been putting my spending on credit cards that require me to meet a minimum spending threshold instead, to fully qualify for a sign up bonus. Otherwise, my go-to-card has been the Capital One World Elite Aspire Travel MasterCard. I much prefer diversify my portfolio to have some fixed reward options.

Depends on How you Spend your Miles

Let’s say at some point, I will earn 125,000 Aeroplan miles. With that many miles, I have several options:

  • 1 First Class round-trip to Asia 1 destinations (China, Eastern Russia, Hong Kong, Japan, Macau, Mongolia, North Korea, South Korea, Taiwan)
  • 2 Economy Class round-trips to Europe 1 destinations (Austria, Belgium, Denmark, France, Germany, Ireland, Italy, Luxembourg, Netherlands, Norway, Portugal, Spain (incl. Balearic Islands; excl. Canary Islands), Sweden, Switzerland, United Kingdom)
  • 5 Economy Class round-trips to anywhere in Canada & Continental United States (Canada’s 10 provinces & 3 territories; The 48 contiguous US states, plus the District of Columbia and Alaska)

See Aeroplan Award Chart.

Dollar for dollar value, I would probably get more bang for my buck redeem for a First Class ticket. However, I may have a slew of upcoming trips that I rather not pay cash with.

What I do

The question is always, what is the best use of my miles? Redeem for Economy, Premium Economy, Business or First Class travel? The answer for me has always been, save up and be ready for anything!

I redeem my miles based on my travel habits. Furthermore, I really do not like paying full fare. So if I know that I have a slew of upcoming trips, I will be more prone to redeeming for Economy travel, so that I can spread my miles out. If I do not have too many upcoming trips, I would be more willing to spend on Business or First Class travel. It all depends on how many miles I readily have.

I use my fixed rewards to pay for my taxes and fuel surcharges, effectively bringing my costs down to zero, all paid with rewards.

Conclusion

At the end of the day, I must admit that a lot of tedious work is put in to calculate how to get the best return. You just have to do what works best for you. Keep in mind that the more work you put in to calculate optimal options, the more you will be rewarded (pun intended).

4 Comments

  1. Hi

    I have 11000 IHG points from my Capital One IHG credit card Canada that was closed Nov 7th 2016 and it has not been added top my account and I am getting the run around from both IHG and Capital One it would mean that I would lose my Spire Status as I only need 6700 points know when I got to may statement it is not their for nov 7 but shows new balance till dec 7th help anyone

  2. I use the length of the overall flights and any long legs to decide. Anything over 3 hours in the air and I start to consider first class.
    My best experience was Newfoundland to Hawaii a few years ago. Booked first class for only 60,000 points. On some of the legs it was just me up there so I had my own private flight attendant (talk about VIP!) Even had a skysleeper from Honolulu to Vancouver.
    I did a sample booking on the Air Canada website and the flights would have been over $6,000 in first class. My cost was around $200 in security and airport fees etc.
    Interestingly, long before I found this site, I used to describe myself as a “points hog,” and it’s good to know I have company.

    1. That is an awesome way to approach your miles. Glad you sorted out what makes the most sense for you and getting the best value that you can. Thanks for sharing your experiences with us!

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.