East Coast Alaska Airlines companion fare strategies

As I mentioned last week, In order to get to Maui and back I stitched together 3 legs using a single Alaska Airlines companion ticket. While folks on the West Coast are probably familiar with Alaska and their companion ticket, now that the merger with Virgin America is complete it might be time for residents of some East Coast cities who had ruled out Alaska because of its limited route network to take another look.

Two flavors of Alaska Airlines companion fares

There are technically two flavors of Alaska Airlines companion fares. For the past several years Bank of America has offered a taxes-and-fees-only companion fare to new Alaska Airlines Visa cardmembers after spending $1,000 on the card within 90 days.

Then, on each account anniversary, you’ll receive another companion fare for $99 plus taxes and fees.

Besides the $99 co-pay for anniversary companion fares the two are otherwise identical.

What’s so great about Alaska Airlines companion fares?

Three features make Alaska companion fares unique:

  1. they can be used systemwide;

  2. they can be used on any economy fare;

  3. and both passengers receive mileage credit as if they were both flying on paid tickets.

In fact, the only restriction I’ve ever encountered using a companion fare is that the Bank of America cardholder has to be either one of the two passengers traveling on the fare or have their name on the credit card used to make the reservation.

The fare does not have to be paid for with the Bank of America credit card that triggered the fare. You can even use an authorized user card, as long as it has the name of the Bank of America cardholder, and even that isn’t required if the Bank of America cardholder is one of the passengers.

That means using an Alaska companion fare isn’t mutually exclusive with many methods of payment, for example using a Chase Sapphire or Barclaycard Arrival Plus card for trip delay insurance, or a US Bank Flexperks Travel Rewards card for a Real-Time Rewards redemption.

A final note on fares: since the companion fare can be used to book any economy fare class, and both tickets book into the same fare class, you can use the companion fare to book tickets that are upgradeable using miles or MVP Gold guest upgrades. However, that upgrade space is extremely limited so I would not suggest paying more for an upgradeable fare speculatively if upgrade space is not available at the time of your booking; it likely never will be.

Alaska Airlines routes from the East Coast

Alaska serves a surprisingly large number of cities, especially now that Virgin America’s routes have been integrated into the system, but they are almost entirely reliant on five West Coast hubs: Seattle, Portland, Los Angeles, San Francisco, and San Diego.

That means flying from the East Coast to anywhere in the middle of the country will require backtracking: flying first to the West Coast, then connecting to a flight retracing your steps. You probably won’t want to do that — Seattle is a long way out of the way if you want to fly between Washington, DC, and Cancun.

However, lots of people fly to the West Coast as their final destination, and others fly onward to points West, North, or South, and for those folks the companion fare can still provide a fantastic value.

What I’ve done is break up Alaska Eastern time zone airports into six buckets, based on which of Alaska’s hubs are served from that airport.

Seattle

  • Tampa (TPA)

  • Atlanta (ATL)

  • Charleston (CHS)

  • Indianapolis (IND)

  • Columbus (CMH)

  • Detroit (DTW)

  • Pittsburgh (PIT)

Seattle and San Francisco

  • Raleigh/Durham (RDU)

Seattle, San Francisco, and Los Angeles

  • Fort Lauderdale (FLL)

  • Washington (IAD)

Seattle, Portland, San Francisco, and Los Angeles

  • Washington (DCA)

  • Philadelphia (PHL)

  • New York City (JFK) (plus San Jose and Las Vegas)

Seattle, Portland, San Francisco, and San Diego

  • Orlando (ORL)

Seattle, Portland, San Francisco, Los Angeles, and San Diego

  • Baltimore (BWI)

  • Newark (EWR) (plus San Jose)

  • Boston (BOS)

Three strategies for East Coast companion fares

If you live in or near one of those Eastern cities, I think there are at least three useful ways to judge the value of Alaska Airlines companion fares: connecting onward, backtracking, and non-stops.

Connecting onward is the most obviously high-value use: if you fly to Hawaii or the Pacific coast of Mexico at least once per year, and are willing to do so in economy, the ability to book any economy fare in the system can give you enormous value and flexibility. For example, from Washington, DC, there are no non-stop flights to Hawaii, so you’ll have to make a connection somewhere. If that’s the case, why not Seattle instead of Atlanta? Over the Thanksgiving dates I checked from DC, Alaska flights to Hawaii were already the cheapest options — adding a companion fare is icing on the cake. From New York, Alaska was the cheapest option to every Hawaiian island but Kauai (Delta undercut them by $15).

Backtracking is a less obviously appealing option, as I gestured at above. However, for many destinations in the Mountain West, it can still make sense. For example, my hometown of Missoula, MT, is a notoriously expensive city to fly in and out of (fortunately flights are also very often overbooked, and I received my only $1200 voluntary denied boarding voucher there). Over the Thanksgiving weekend, for example, Delta isn’t selling fares eligible for American Express companion tickets, so two tickets would cost $1,596, while two Alaska tickets would cost just $1,373 with a companion fare. A $223 savings isn’t revolutionary, but it’s still more than the Alaska Airlines Visa’s $75 annual fee.

Finally, obviously a lot of people have perfectly good reasons to fly between the East and West coasts without connecting at all. If you live in Baltimore, New York, or Boston, you might simply use Alaska companion fares to pay for the occasional trip to the West Coast. It’s lovely there!

The point is, the Alaska companion fare is such a good deal it’s worth considering even if you don’t think of yourself as a “typical” Alaska passenger, which is to say someone who commutes up and down the West Coast.

Alaska Companion Fare routing rules

Here I’m leaning entirely on Scott Mackenzie at Travel Codex, who is the authority on all things Alaska Airlines:

“Although the terms and conditions say the fare must be for round-trip travel, this isn’t strictly true. You can book one-way travel. You can book open jaws. You can book multi-city travel between completely different cities. I’ve confirmed that Austin to Seattle, Portland to Maui, and Honolulu to Sacramento — all on different dates — will qualify…

What you can’t do is book travel that is clearly not anything close to round-trip. In the example of AUS-SEA//PDX-OGG//HNL-SMF we flew west and then flew east. Kinda sorta maybe round-trip, even if we never hit the same city twice.”

Since Alaska allows up to 4 entries in a multi-city itinerary (not four legs — Alaska will add connections on its own as necessary), my itinerary IND-PDX-OGG-DCA wasn’t entirely optimized. I could have added a longer stopover in Los Angeles on the way back, or a longer layover in Seattle on our outbound itinerary.

Ultimately, because of Alaska’s strong North-South axis on the West Coast, a truly optimal itinerary would need to include several West Coast stops. For example, this is a valid companion fare itinerary:

  • JFK-SEA//PDX-SFO//LAX-LIH//OGG-LAX

You can put an unlimited amount of time between each of these legs, meaning as Scott points out, these are really “four one-way fares booked on a single ticket.”

Of course, that begs the question: why would you want to book four unrelated one-way fares on a single ticket? First of all, the fares don’t have to be unrelated. Our flights from Indianapolis to Portland, Portland to Maui, and Maui back home were not “unrelated,” after all. But even in the case of totally unrelated fares, there are reasons you might consider it.

Since Alaska prices out all itineraries as one-way fares, it’s not uncommon to find a situation where one leg of your trip is expensive with cash and cheap with miles, while the other leg is cheap with cash and expensive with miles. If the dates and directions all line up properly (no small feat), you could use a single companion fare to book four one-way fares, then fill in the rest of the itinerary with miles or cash as you see fit.

Likewise, especially frequent travelers might consider “nesting” different trips inside a single itinerary. Someone traveling frequently between Washington and Los Angeles, for instance, might book:

  • DCA-LAX//LAX-OGG-LAX//LAX-DCA

If you squint at this just right you see it’s actually two unrelated roundtrips: one between DCA and LAX, and one between LAX and OGG. To make this work you’ll need to book an additional roundtrip between LAX and DCA, of course, but in exchange you get can get two companion fares for the price of one.

Conclusion

Bank of America has added some restrictions in recent years to who is eligible for certain new credit cards, unfortunately including the personal Alaska Airlines Visa card. The business card is supposedly unaffected for now, so even if you don’t have any Bank of America Alaska Airlines cards you should be able to sign up for one personal and at least one business card, naturally conditional on your creditworthiness.

The main effect of those changes should be to discourage folks who already have multiple personal Alaska Airlines cards from cancelling them, unless they’re absolutely certain they won’t be flying Alaska anytime in the near future, since it seems that it will be increasingly difficult to collect new companion fares going forward.

My favorite credit card auxiliary benefits, ranked

I've been thinking lately about the Bank of America Alaska Airlines credit card, since it has a somewhat higher signup bonus than usual, at 30,000 Mileage Plan miles, a $100 statement credit, and a taxes-and-fees-only companion ticket for the first year, instead of the usual $99-plus-taxes-and-fees offer.

Since Alaska companion tickets can be used on any economy fare, and Mileage Plan has last-seat award availability, this is basically a signup bonus of between 1.5 and 2 roundtrips on Alaska or Virgin America, depending on whether you can find low-level award space or have to redeem all 30,000 Mileage Plan miles for a one-way (or possibly a few more if you're flying to Hawaii or Mexico).

Since Bank of America lets you apply for and receive the same card and signup bonus multiple times, it used to be popular to apply for a new Alaska Airlines card every 91 days and then request product changes to the Better Balance Rewards card, which can be automated to spin off $30 every quarter in cash back. I believe that product change is no longer available as the Better Balance Rewards card isn't being offered to new customers, but a product change from a card with a good signup bonus is still likely the best way to get a card like the BankAmericard Travel Rewards card, which only has a standard signup bonus of 20,000 points.

Since ranking stuff is fun, here are a few of my other favorite credit card auxiliary benefits, ranked.

5. Centurion Lounge access

This is technically not one of my favorite auxiliary benefits since I don't have an American Express Platinum or Business Platinum card, but it's one of my favorite auxiliary benefits for other people to have so they can guest me into the lounges.

I've invited subscribers to join me at meetups in the Centurion lounges in Las Vegas, New York La Guardia, and Dallas/Fort Worth, and as someone who would never pay for lounge access I am happy to say they really are terrific lounges. Great food, cocktails, views, seating, and wi-fi. If I lived in or regularly traveled through cities with Centurion Lounges I could certainly see applying for a Business Platinum card. I don't, so I won't, but this benefit still sneaks into the top 5.

4. America Express Delta Platinum and Reserve companion tickets

I don't think the Delta companion tickets, which can both be redeemed for tickets in certain cheap domestic economy fare buckets, and in the case of the Reserve companion ticket in first class, are as valuable as people claim. They essentially function as a not-quite-50% discount on economy tickets, if you are willing to be flexible with your routing and plan far enough in advance, because you still have to pay taxes and fees on the second ticket.

The best value of the companion tickets, of course, is to simply sell them to someone who isn't a travel hacker. That's an easy way to bring down the out-of-pocket cost of your annual fee, if you're primarily interested in the cards in order to earn bonus SkyMiles and waive the Medallion Qualifying Dollar requirements for status.

Finally, Frequent Miler has written about the opportunity to combine Delta companion tickets and the American Express Business Platinum card's 35% Membership Rewards point rebate. Apparently Membership Rewards points can be redeemed against purchases made with the Business Platinum card outside the American Express Travel booking portal. It does require a phone call and is apparently up to the discretion of the phone agent, and I've never tried it, so don't take my word for it. To give a simple example, two $500 tickets with $11.20 in taxes and fees would cost a total of $511.20 if booked with a Delta companion ticket. Since you can pay for Delta companion tickets with any American Express card, you'd then put the charge on your Business Platinum card. Calling into Membership Rewards, you'd redeem 51,120 Membership Rewards points, and eventually receive a rebate of 35% of those points, or 17,892. That would give you a total out-of-pocket cost of 33,228 Membership Rewards points for $1,000 in flights, or 3 cents per Membership Rewards point.

Be careful to note the reason this works: you can't pay for Delta companion tickets with any card that is not an American Express card. If you could, you'd be better off paying with a travel rewards card that you manufacture cheap spend on, or a card that offers free trip delay insurance. But since you have to choose an American Express card, the Business Platinum is the card that lets you leverage the value of your Membership Rewards points against the already-discounted cost of the companion ticket.

3. Trip Delay insurance

Speaking of trip delay insurance, after my experience getting stranded by United in Denver, I've come around to the idea. I'd never pay for it separately, and I probably wouldn't keep a card just because it offers trip delay insurance, but if you already carry a card like the Chase Sapphire Preferred or Barclaycard Arrival+, then you should be booking as many of your flights with it as possible.

That won't always be possible, for example if you're booking tickets using US Bank Flexpoints or Chase Ultimate Rewards points, but for tickets you book with cash, or award tickets that give you a choice of cards to pay with — use the right card! It only takes one claim every few years to pay for many years of $89 or $95 annual fees.

2. Hilton Honors Gold (Diamond) status

Hilton Gold status is notoriously easy to earn, and Hilton Diamond status is notoriously worth little above and beyond the benefits of Gold. Nonetheless, no matter how easy it is to earn, you still want to earn it somehow if Hilton is going to be one of your primary loyalty programs. Personally I carry the American Express Hilton Honors Surpass card, which gives automatic Gold status and Diamond status when you spend $40,000 on the card, although the Citi Hilton Honors Reserve card has the same status earning structure (but earns just 5 Honors points per dollar spent at grocery stores).

1. Hyatt annual free night certificate

The annual free night certificate earned by the Chase Hyatt credit card is the best credit card free night certificate for a few reasons:

  • Unlike the Citi Hilton Honors Reserve free night certificate, it can be used on any day, not just on weekends, and doesn't have a $10,000 spending requirement, allowing that spend to be put on more lucrative credit cards.
  • Unlike the Chase IHG Rewards Club free night certificate, the Hyatt certificate can be combined with valuable World of Hyatt points instead of worthless IHG Rewards Club points. To illustrate this point, a 3-night stay at a top-tier IHG Rewards Club property like the InterContinental Sydney would require the transfer of 120,000 Ultimate Rewards points to IHG Rewards Club, plus the use of an annual free night certificate. A 3-night stay at a top-tier Hyatt property requires just 90,000 Ultimate Rewards points — no certificate required! The corollary of that is the ability to save valuable World of Hyatt points at lower-tier properties by swapping in the free Category 1-4 certificate. The credit card's $75 annual fee buys you a free night certificate worth between $50 and $150 in Ultimate Rewards points.
  • Unlike the Chase Marriott Rewards Premier free night certificate, the Hyatt free night certificate can be used at properties you actually want to stay at. The Marriott Rewards Premier certificate can be used at properties up to Category 5, which would cost 25,000 Marriott Rewards points, if you could find one to stay at. But while Marriott has so totally gutted their categories that there's no reason to count on finding a Category 5 property that's worth an $85 annual fee, there are still plentiful Category 4 Hyatt properties where paying a $75 annual fee will get you a reasonable discount.

Conclusion

Naturally, your ranking should differ based on your own travel needs:

  • if you travel often enough that you are desperate for lounge access, the premium airline credit cards will offer it;
  • likewise Hawaiian travelers may get value from the Barclaycard Hawaiian Airlines credit card's companion ticket;
  • and if you stay at a lot of Sheratons the American Express Starwood Preferred Guest Business card gives Sheraton Club Lounge access (I've never stayed at a Sheraton or visited a Sheraton Club Lounge but I'm sure they're nice).

But for my own travel needs, these are the five benefits I value the most.

My good Delta companion certificate redemption proves how bad companion certificates are

I rarely pretend that my posts are supposed to be "timely," but since the new Bank of America Alaska Airlines Visa Signature credit card, with its $0 base fare companion ticket, instead of the $99 base fare companion ticket the card has traditionally offered, has occupied the blogosphere for the last few weeks, and since I just received and redeemed my American Express Delta Platinum Business credit card companion certificate, this seems as timely a moment as any to revisit the issue.

The problem with Delta companion certificates

There are two conflicting issues when redeeming the Delta companion certificates offered by the American Express personal and business Delta Platinum and Reserve credit cards:

  • Certificates can only be redeemed for flights in fare classes L, U, T, X, and V. Those are, naturally, the cheapest 5 fare classes (plus E), which sell out first as people book their tickets and the departure date approaches.
  • Flights in those fare classes are, as you'd expect, cheaper than flights in the more expensive fare buckets.

In other words, Delta and American Express have contrived to "cap" the cost of offering free companion tickets by allowing their redemption only on flights that are far enough in the future, and empty enough, that they're unlikely to cost very much.

To maximize the value of a Delta companion ticket redemption, therefore, you'd want to find a flight sufficiently far in the future that "cheap" fare buckets are still available, but to an expensive destination in the continental United States.

My Delta companion certificate redemption was close to ideal

Fortunately, I grew up in Montana and while my hometown is served by several airlines, including Delta, tickets there are unspeakably expensive. I've been watching tickets home for the Western Montana Fair for the last month or so, until my companion fare certificate finally posted last week to my Delta account (the last two years, my companion certificate has posted on May 4, while my anniversary statement closes on May 20; do with this information what you will).

On May 4 the two tickets I needed were retailing for $774, which meant I could redeem my companion certificate and get $1,548 in airfare for $824 (after taxes and fees are applied to the second ticket).

Of course, I'm also due to pay a $195 annual fee for the credit card, bringing my total out-of-pocket expense to $1,019, roughly a 34% discount off the retail price of both tickets.

Not bad! Unless you're a travel hacker.

I overpaid by $219

The key insight travel hacking provides is that two $774 tickets are not worth $1,548. They're worth $800. That's because I can redeem 40,000 US Bank Flexperks Travel Rewards Flexpoints for each ticket, or I can redeem those points for 1 cent each, i.e., $800 in total. In other words, I paid $1,019 for $800 in airfare.

What companion certificates are and aren't good for

I stand by my decision to redeem this particular companion certificate for this particular flight, primarily because Delta companion certificates are so difficult to use, given the fare class restrictions, that there's no certainty of being able to redeem them at all (I have tried, unsuccessfully, to pawn off my certificates to family members in the past).

There's a sort of core logic to redeeming your most restrictive travel instruments (free night certificates, companion certificates) where possible before redeeming more flexible instruments (miles, points, and fixed-value award currencies).

And indeed, by securing a "mere" 34% discount on this pair of flights, I'm left with the same 80,000 Flexpoints, worth up to $1,600 in airfare, that I would have otherwise redeemed. I haven't "lost" anything by redeeming the companion certificate instead.

However. This game of rolling forward "more valuable" points currencies while redeeming "less valuable" travel instruments is just another way of keeping large, unredeemed (and therefore worthless) points balances and reducing your total return on your travel hacking practice. Your travel hacking objective should not be to get the most value possible from your least valuable rewards, but to identify and get the most value possible from your most valuable rewards!

Conclusion

The point of this post isn't to say that "companion tickets are worthless." Companion tickets aren't worthless, but they're valuable only to the extent they can be integrated into a coherent travel hacking practice.

That means, for the most part, that they're best redeemed for cheaper, rather than more expensive flights. The logic should be obvious: more expensive flights are more target rich environments, where airline miles and fixed-value currencies like US Bank Flexpoints are likely to shine.

Cheaper flights pose a real problem: you can redeem fixed-value currencies like Chase Ultimate Rewards for 1.25 cents each, or Membership Rewards points for 2 cents each (for certain American Express Business Platinum customers), but those are also currencies with more potential upside on more expensive tickets and other kinds of travel redemptions.

Paying $200 for two $200 tickets won't save you much cash, because it's hard to save much cash on tickets that cheap. However, it's likely to be a better use of a companion certificate than a 34% discount on an $800 ticket, for the simple reason that on an $800 ticket you can do better.

Quick hits: hijinks booking Mileage Plan awards on Virgin America

In the last few months I've written a couple posts about booking award travel on Virgin America, with Alaska Airlines Mileage Plan miles and with HawaiianMiles, mentioning a few things I had come across doing everyday research.

Lo and behold, I actually just had occasion to book a Virgin America ticket with Mileage Plan, and found a quirk that might cost you thousands of Mileage Plan miles if you aren't paying attention.

Virgin America sometimes only makes one First Class award seat available to Mileage Plan at a time

I was searching for two tickets between the East Coast and San Francisco for June, and saw two First Class seats available for 60,000 Mileage Plan miles on Virgin America's nonstop flight:

After running the dates by my partner, I decided to just book one ticket for myself and book hers later. After running a search for one passenger, I found a First Class ticket available for just 25,000 miles:

While selecting my seat, I noticed that the First Class cabin was completely empty. After booking my ticket, I decided that booking a refundable 60,000-mile ticket for my partner made sense to make sure we were on the same flight. But when I searched again, another First Class ticket had become available at the 25,000-mile level!

Then I remembered that all Alaska Airlines tickets are refundable greater than 60 days before departure, so I went ahead and booked her a low-level ticket as well.

Out of curiosity, I searched again and yet another 25,000-mile ticket had become available. In other words, Alaska Airlines was only showing one low-level First Class award seat at time, but immediately made an additional seat available each time one was booked.

This doesn't seem to be a universal phenomenon, since I was able to find 7 First Class seats simultaneously on the same route on January 18, 2018, but it does seem fairly common for dates in June, when I'm planning my trip.

Since Alaska award tickets are refundable within 24 hours of booking, and outside of 60 days, there's no risk booking low-level award tickets one at a time to see if additional seats become available. If they don't, and you'd like to make different plans, you can quickly cancel all the reservations you were able to make.

The Mileage Plan search engine shows incorrect fees on Virgin America

For some reason the Mileage Plan search engine shows fees and charges of $19, but once you select a flight and continue the correct fees and charges, in this case $5.60, are shown.

My only theory is that the engine might be adding half the $25 partner booking fee, $12.50, to the security fee of $5.60, and rounding up to $19.

In any case, when you proceed to checkout you'll see the correct, lower fee before paying.

Booking Virgin America to Hawaii: the bad, the good, and one weird old trick

While Virgin America doesn't have very many flights from where I live, I was still intrigued by the new, as of January 9, 2017, ability to book Virgin America flights using Alaska Airlines Mileage Plan miles, since I still have a slew of them left over from the days of the Bank of America Alaska Airlines debit card and Alaska's generous status match.

I don't need any help getting around the continental United States, but Virgin America flies to Hawaii and Mexico, so I decided to see what their award availability looked like.

As regular readers might expect, I took a brute force approach: for every date between January 10 and February 10, and between November 7 and December 7, 2017, I checked to see if there was at least one first class seat available from San Francisco to Honolulu and from San Francisco to Maui. I didn't check return flights.

In other words, I'm not trying to plan a trip, but just trying to get a sense of what kind of award space might be available for future reference.

Searching Alaska is the worst

Since Virgin America Elevate redemptions are revenue-based, it's not possible to search Virgin America's website for low-level award availability — you have to use Alaska's website instead.

The problem with this is two-fold. First, Alaska's award calendar doesn't allow you to filter by the number of stops you're willing to make, so the award calendar will show you the lowest award rate available across every possible itinerary.

That wouldn't be so bad except, additionally, Alaska doesn't allow you to filter by the cabin of service available for the entire trip. That means most dates will have at least one seat's worth of "low-level" first class award availability, since a combination of a short first class hop and long main cabin flight will price as a "low-level" award and appear on the award calendar.

To illustrate this, here's the November, 2017, calendar for first class flights between San Francisco and Honolulu:

And here's the actual 40,000-mile first class itinerary that Alaska returns:

The results

With that out of the way, let's see the results.

Here are the results of my search for a single first class award seat on the non-stop Virgin America flight between San Francisco and Honolulu:

  • November 7-December 7, 2017: 1 date (December 7)
  • January 10-February 10, 2017: 15 dates

And here are the results of my search for a single first class award seat between San Francisco and Maui:

  • November 7-December 7, 2017: 1 date (December 7)
  • January 10-February 10, 2017: 16 dates

I don't know anything about the flow of tourists between the Bay Area and Hawaii, so maybe late November is the high season and late January is the low season. Alternatively, Virgin America might open up a lot of first class award seats within 30 days of departure, which would be good to know if you have a flexible travel schedule.

One weird old trick to book Virgin America first class award seats

You may have noticed above I indicated the specific date, December 7, on which I was able to find a first class award seat to Hawaii. That date is significant because it's outside the Alaska calendar booking window (as of this writing; when you read this December 8 will serve the same function):

Once you view flights available on December 6, however, the engine is suddenly able to show flights on the December 7 as well:

I found this interesting enough that I searched for a number of other international destinations from San Francisco, and was able to find a first class award seat on every route I searched.

My tentative hypothesis is that people watching for the booking calendar to open up in order to book awards may not realize this extra day is available.

My alternate hypothesis is that Thursday, December 7, is some kind of holy day on which residents of the Bay Area are forbidden to travel, thus opening up more award seats than are otherwise available.

Conclusion

So, what have we learned?

  • First class award availability on Virgin America between the West Coast and Hawaii is fairly easy to find either in late January, or within 30 days of departure.
  • First class award availability between the West Coast and Hawaii and Mexico is fairly easy to find either one day after the Alaska "search" calendar ends, or on Thursday, December 7, 2017.

I don't buy points, but maybe you should!

Every major loyalty program sells their points for cash, normally at a fixed rate through the industry-sponsored site Points.com.

For example, you can buy up to 60,000 Delta SkyMiles per calendar year for 3.76 cents each, up to 75,000 United MileagePlus miles for 3.76 cents each, up to 150,000 American AAdvantage miles for 3.19 cents each, and up to 60,000 Alaska Mileage Plan miles for 2.96 cents each.

Hotel programs likewise sell their points currencies for cash, with IHG Rewards Club selling up to 60,000 points for 1.15 cents each, Hilton HHonors selling 80,000 points for one cent each, Marriott Rewards selling up to 50,000 points for 1.25 cents each, Starwood Preferred Guest selling up to 30,000 points for 3.5 cents each, and Hyatt Gold Passport selling up to 55,000 points for 2.4 cents each.

Purchased points are too expensive for me

I don't personally buy miles or points because it's a more expensive way of acquiring miles and points than the other methods I have available.

United MileagePlus miles and Hyatt Gold Passport points cost just 1 cent each when purchased with Ultimate Rewards points transferred from a Chase Ink Plus account.

I happen to have a Citi AAdvantage Platinum Select MasterCard, so if I ever needed to stock up on AAdvantage miles, I can do so for 2.105 cents each — the cash back I'd earn manufacturing the same unbonused spend on my Barclaycard Arrival+ MasterCard.

And of course I earn 6 HHonors points per dollar spent with my American Express Hilton HHonors Surpass card at grocery stores, so even compared to an "optimal" redemption rate of 2 cents per US Bank Flexpoint, I'm already buying HHonors points at a mere 0.67 cents each, 33% less than the 1 cent per point Hilton wants to charge.

Purchased points may make sense for you

As the examples above make clear, the decision whether to purchase miles and points or manufacture them rightly depends upon your next best alternative: your opportunity cost.

If you're currently manufacturing the bulk of your otherwise-unbonused spend on a 5% cash back card like the Wells Fargo Rewards Visa during the introductory promotional period, then manufacturing spend on a one-mile-per-dollar card costs not 2.105 cents per mile, but 5 cents per mile, 57% more than, for example, American is willing to sell them!

Likewise, if you have $100,000 on deposit with Bank of America, you might be earning 2.625% cash back with a BankAmericard Travel Rewards card. That may make purchasing Hyatt Gold Passport points at 2.4 cents each worthwhile, compared to manufacturing spend on a Chase Hyatt credit card.

Purchase small numbers of points for high-value, upcoming redemptions

While you usually see affiliate bloggers advocate buying large numbers of points speculatively when loyalty programs offer the highest bonuses on purchased points (bringing down the cost per point), I have exactly the opposite view.

If you find yourself with an upcoming, high-value redemption, and don't have the time to manufacture the required points, then go ahead and buy them. Paying "too much" per point, if it drastically brings down your total out-of-pocket cost, makes perfect sense: the goal isn't to pay as little as possible per point, it's to spend as little money as possible on the trips you actually want to take!

But the money you spend speculatively buying miles for redemptions you don't actually have planned could almost invariably be better spent building a credit card and manufacturing spend strategy that generates the trips you want to take at far lower out-of-pocket expense.

Excited about Ultimate Rewards transfers to Flying Blue? Let's talk about it

In case you've been staying in a buddhist travel hacker monastery for the last week, the big news to come out of the loyalty world this week was the unannounced addition of Flying Blue, the loyalty program of Air France and KLM, as a transfer partner for "flexible" Chase Ultimate Rewards points.

This post is going to come across as a bit cynical, so in the hopes of heading off sniping in the comments, let me first explain why this is phenomenal news.

Korean Airlines is not a great Skyteam program

While it's true that Ultimate Rewards already had transfer partners in oneworld (British Airways), Star Alliance (United), and Skyteam (Korean Airlines), Korean Airlines SKYPASS is a notoriously complex program to work with, with the gaping drawback that you can only book award tickets for relatives — and if you take them at their word, that even excludes stepchildren!

By contrast, Flying Blue has an online award search engine that allows you to book award tickets for anyone you like (as long as you don't get caught in one of their fraud traps).

Ultimate Rewards is a vibrant and growing program

Any expansion of a loyalty program to include new ways to earn or redeem points is an objective positive. If I never book a Flying Blue award ticket, I'll still be glad to know that it's someone's job at Chase to hunt down loyalty programs, negotiate transfer agreements, and implement the technology required to expand our Ultimate Rewards redemption options. To me that's a sign that the program still has a degree of vibrancy and is not yet ready to stagnate, like American Express Membership Rewards.

With that out of the way, let's talk about Flying Blue redemptions.

Delta makes life as hard as possible for their partners

To understand how difficult it is to redeem Flying Blue miles on Delta, it's important to understand how Delta makes award space available to its own members and to partners.

Delta dynamically prices awards for its own members. It's no longer rare to find cases where the constituent flights on a connecting award ticket are more or less expensive than the complete itinerary. Here's an itinerary connecting in Minneapolis that's more expensive than either of the constituent flights on their own:

The constituent flights price at 12,500 SkyMiles:

And 11,500 SkyMiles:

Unrelated to SkyMiles pricing for their own members, Delta makes some seats on some flights available to partners for awards.

Let's see those same three searches using Alaska Airlines Mileage Plan. Here's the first leg (it's 25,000 instead of 12,500 because I'm searching for one-way flights):

Here's the second leg:

Here's the catch: Delta doesn't make that complete itinerary available to partners, which we can only surmise is because it prices higher at the 15,500-mile level. Here are the only options Alaska shows when doing a one-way search between BWI and MSO on September 19:

Fortunately, Alaska allows you to construct your own Delta routing as a "Multi-city" flight search. By feeding Alaska the flights I know have award space (because I checked earlier), I can easily produce my desired award:

It's important to understand exactly what's happening here: Delta is making its cheapest award space available to its own members and to partners on individual segments, but charging its own members more on the complete itinerary and not making that complete itinerary available to partners. The reason the Alaska workaround works is that Alaska is willing to search for each leg individually in a multi-city search, and then price the entire itinerary according to its own routing rules, which make it a valid one-way itinerary.

Flying Blue does not allow multi-city awards to be booked online

This is what Flying Blue's multi-city search engine looks like:

Flying Blue doesn't let you construct Delta itineraries online because your final destination must be your originating airport.

I assume you could construct this itinerary over the phone

Good luck with that.

Conclusion: how I'll be using Flying Blue

So Flying Blue isn't the key to unlimited cheap flights on Delta. That doesn't mean it's useless! On the contrary, it's going to be one of my first stops along with Alaska, British Airways, and United, each time I start planning a new trip. The search engine makes it easy to see at a glance whether there are award seats available, and if there are, they will usually be among the cheapest, not because of their great award chart or their low fuel surcharges (on the contrary, they have a fairly standard award chart and pass along fuel surcharges to customers), but because the miles themselves are so cheap when transferred from a Chase Ultimate Rewards account.

To make the same point another way, a redemption of 12,500 SkyMiles manufactured with a Delta Platinum American Express card costs $188 in opportunity cost ($8,929 manufactured on a 2.105% cash back card), while a 12,500-mile Flying Blue redemption costs just $125 in Ultimate Rewards points: a 33.5% discount.

I don't expect those redemption to be very frequent — but I do expect to make them each and every time the opportunity presents itself!

Starting from scratch: airline tickets

Travel hacking is an iterative game: the options you have available today are restricted by the decisions you made in the past. That's one reason I avoid giving advice whenever possible: your situation is different from mine, not just depending on the merchants you have available geographically, but also depending on which banks you have relationships with, which products you've already had or lost, and the amount of time you have available to dedicate to the game.

Having said that, I do sometimes think about how I would design a travel hacking strategy from scratch: with a blank slate, what approach would I take to the loyalty ecosystem to get the most value for my travel hacking dollar?

Today's post is about how I would approach booking airline tickets if I were starting from scratch. Tomorrow's will be about hotel stays.

Revenue versus award

Starting from scratch, there's a basic decision you have to make about how to pay for the flights you're responsible for securing each year: will you book revenue tickets or award tickets? Once you're deeply involved in the game you may have large balances across a range of programs you can deploy for their optimal uses. But when you're just getting started, it's much easier to focus on this stark choice.

When booking revenue tickets, you'll usually get a fixed return on your travel hacking dollar, or one that falls in a relatively narrow band: US Bank Flexpoints are worth 1.33 to 2 cents each, Chase Ultimate Rewards points in a premium (Ink Plus or Sapphire Preferred) account are worth a fixed 1.25 cents each, and Citi ThankYou points are worth between 1.25 cents and 1.6 cents depending on whether you have a Premier or Prestige card, and the airline marketing the flight.

When booking award tickets, there's no such band of values: points can range in value from a fraction of a penny up to 10 cents or so depending both on the cash price of the flight and the number of miles required to book it.

Note that neither of these options is any more or less "free" than the other. Since you should be manufacturing spend furiously, you're paying acquisition and liquidation fees for whichever currency you happen to choose. The only question is which strategy will bring the cost of your travel down the most.

Revenue tickets are cheap

On the revenue side, there are lots of good options depending on your situation:

  • Citi ThankYou Premier. A fixed 3.75 cents in airfare per dollar spent at gas stations. At $5.75 in "all-in" cost for $505 in spend, a 69.6% discount off retail.
  • US Bank Flexperks Travel Rewards. Up to 4 cents in airfare per dollar spent at grocery stores or gas stations (wherever you spend more each month). At $6.30 in "all-in" cost for $506 in spend, an "up to" 68.9% discount off retail.
  • BankAmericard Travel Rewards. For those with $100,000 on deposit with Bank of America, Merrill Lynch, and MerrillEdge, a fixed 2.625 cents in airfare per dollar spent everywhere. At $4.30 in "all-in" cost for $504 in spend, a 67.5% discount off retail.
  • Chase Ink Plus. For small business owners, a fixed 6.25 cents in airfare per dollar spent at office supply stores (and 2.5 cents per dollar spent at gas stations). At $9.18 in "all-in" cost for $309 in office supply spend, a 52.5% discount off retail.

When I say "depending on your situation," I mean to draw attention to the fact that you when starting from scratch, you shouldn't pursue all four options! If you don't have access to gas station manufactured spend, the Citi ThankYou Premier won't work for you. If you don't have access to grocery store manufactured spend, the Flexperks Travel Rewards card isn't for you. If you don't have access to $100,000, the BankAmericard Travel Rewards card won't give you the same value it will someone who does. And if you don't own a small business, Chase probably won't give you an Ink Plus.

Award tickets are cheap and (can be) hedged

On the award side, the picture looks radically different. Three of the four major domestic airlines offer some form of "last-seat" availability on their own flights: Delta, American, and Alaska will sell almost any seat on almost any date for some number of miles, while United reserves last-seat "standard" availability to their co-branded Chase credit cardholders. Thus there are three pots airline rewards currencies fall into:

  • Delta. When starting from scratch, there are two main ways into the Delta ecosystem: their own co-branded credit cards, and American Express Membership Rewards co-branded credit cards. Unfortunately, neither of them is cheap. The American Express Delta Platinum and Reserve credit cards offer 1.4 (Platinum) and 1.5 (Reserve) SkyMiles per dollar spent everywhere when you spend exactly $25,000 (Platinum) and $30,000 (Reserve) and $50,000 (Platinum) and $60,000 (Reserve) each calendar year. But the Delta Platinum card costs $195 per year and the Reserve $450 per year! Meanwhile, the American Express Premier Rewards Gold costs $175 per year and earns 2 Membership Rewards points per dollar spent at gas stations and supermarkets. Those points can then be transferred to Delta on a 1-to-1 basis. Moreover, Membership Rewards points let you hedge your downside risk: if a particular Delta award redemption gives you less than 1 cent per Membership Rewards point, you can book it as a revenue ticket. If it gives you more than 1 cent per point, you can book it as an award ticket.
  • Alaska and American. Advanced travel hackers muck about with applying for Alaska and American co-branded credit cards over and over again at various intervals. But when starting from scratch, there's a simple way into both ecosystems at the same time: with the Starwood Preferred Guest American Express. When transferred to either Alaska or American, the card earns 1.25 miles per dollar spent everywhere, which is higher than the amount you can earn directly with either airline's co-branded credit card. Like Membership Rewards points, Starwood Preferred Guest also offers a hedged downside risk, since you can redeem their points for between 1 and 1.43 cents per point for revenue tickets using "SPG Flights."
  • United. If you're able to make United your main airline, then you'll never do better than with a Chase Ink Plus small business credit card, because of its bonused earning rate at office supply stores and 1-to-1 transfer ratio to United MileagePlus. But if you can't get a small business credit card, then you have some hard decisions to make. You could get a Chase Freedom Unlimited, which earns 1.5 Ultimate Rewards points everywhere, and a Chase Sapphire Preferred, which enables the transfer of Ultimate Rewards points to United, but that combination comes with a $95 annual fee. Alternatively, a Chase United MileagePlus Club card earns 1.5 United miles on all purchases but has a $450 annual fee. That's the kind of up-front expense that's not precisely crazy, but needs to be well-justified before taking it on.

Your situation should drive your decision between revenue and award tickets

As I mentioned, I try not to give advice.

Your situation is different from mine: your award availability, typical revenue flight prices, and airline service have nothing to do with mine.

But in my experience, for many people, much of the time, a focus on revenue tickets will generate bigger savings than a focus on award tickets, and if I were starting from scratch, that's where I'd start.

Fortunately, you don't need to take my word for it: all the numbers are above. Look at your own travel needs and it should quickly become obvious whether revenue flights or award flights will generate more value for your travel hacking dollar.

Tomorrow, I'll take the same approach to hotels: starting from scratch, are award nights really cheaper than just paying for your hotel stays?

Pro tip: keep your free bags when crediting Delta flights to Alaska

Background

From my local airport, Delta is by far the most convenient airline to fly. With daily flights to Salt Lake City, Detroit, Minneapolis, Atlanta, and New York City, it's possible to fly virtually anywhere in the country or world with a single stop (although our New York flight is to La Guardia, so a bus transfer is sometimes required).

Moreover, with an American Express Delta Platinum credit card it's easy to reach Silver Medallion status each year by manufacturing $50,000 in spend and earning 20,000 bonus Medallion Qualification Miles (and simultaneously dodging Medallion Qualification Dollar requirements).

Unfortunately, Delta gutted their redeemable mileage earning this year by linking it to the price of your purchased airfares.

Fortunately, Alaska has continued to allow Delta flights to be credited to Mileage Plan based on distance flown, at a lower rate for discount economy fares and a higher rate for first class fares.

I love checking bags

If you just read travel bloggers, you might get the impression that airlines only remain in business out of glee at losing checked bags. Sure, it happens sometimes, but I love being able to throw any old thing I think of into my biggest suitcase and pick it up at my destination.

And I especially love doing it for free, which Delta Silver Medallion status lets me do, for up to 9 people traveling on the same reservation.

On outbound flights free checked bags are easy

Even if you plan to actually fly on your Alaska Airlines Mileage Plan number, it's easy to take advantage of Delta Medallion status to check bags for free on your outbound flights: simply check in with your SkyMiles number on your reservation, then once the airline has possession of your bags change the frequent flyer number on your reservation to your Mileage Plan number (note that this is impossible if you've requested a Medallion Complimentary Upgrade).

On return flights it's slightly trickier

Once "travel has commenced," that is to say, once you've actually boarded any flight on a single Delta reservation, you can no longer change the frequent flyer number linked to your reservation.

What I discovered on my return flight from Salt Lake City after Christmas was that check-in agents are able to honor the free checked bags you receive for having a co-branded American Express credit card, even if you aren't flying under your SkyMiles account number.

To do this, after checking in on a Delta terminal, choose however many checked bags you wish, and when prompted for payment choose to "pay with cash." You can then show the baggage check agent your co-branded American Express card and ask them to honor the free checked bag.

Conclusion

I'm sure there are agents at some stations that are either unwilling or simply don't know how to waive checked bag fees for co-branded cardholders flying on non-SkyMiles frequent flyer numbers.

But I'll be using this technique whenever possible to check my bags for free when I find myself flying on Delta roundtrip itineraries.

Loyalty is an expensive, annoying trap

I shared on Monday that over the weekend I was the proud recipient of $1,300 in Delta voluntary denied boarding compensation, and reflected on some of the possible consequences for the miles and points I'd budgeted for my upcoming travel.

Since I booked some speculative hotel rooms in Eastern Europe for next summer before the latest Club Carlson devaluation, but haven't booked our flights yet, I thought that would be a good place to see how far $1,300 in Delta transportation would get me.

The answer, it turns out, is pretty far! I was able to find this great itinerary flying into Prague and out of Frankfurt, for example, for $1,294, marketed and operated by Delta:

Since there are two of us going, I decided I'd use my Delta transportation voucher to fully pay for my ticket (since the voucher was issued in my name), then redeem FlexPoints or even SkyMiles for the other (if low-level award space opens up — fat chance!).

Silver Medallion status has (a few) privileges

Then I remembered: as a Silver Medallion, I get to choose Comfort+ seats within 24 hours of departure on Delta-operated flights for myself and companions flying on the same itinerary. If I book my partner and I on separate itineraries, I won't be able to select a Comfort+ seat for her without paying $129 for the outbound leg and $99 for the return.

Alternatively, I can book the two tickets on Delta's website, using the transportation voucher to cover the first $1,300 and paying cash for the balance. That would be way too expensive, even if I used my Arrival+ MasterCard to pay the the balance.

On domestic flights, you may or may not care about Comfort+ seating, but on two long-haul international flights, I don't think it's unreasonable to want some additional legroom in economy.

Loyalty makes easy decisions harder

I'll grant that this sounds like a corner case – a curiosity – and not a real problem. But in fact, I find myself in similar situations with some regularity.

Later this year we're flying to Portland to celebrate my partner's birthday. The flights I wanted cost $330, and were pricing out at 20,000 SkyMiles roundtrip. This is basically a wash: redeeming 20,000 FlexPoints would give me the equivalent of 3.33% cash back on $10,000 in spend, while redeeming SkyMiles would get me a 2.3% return on $14,285 in spend (since I earn 1.4 SkyMiles per dollar spent on my American Express Delta Platinum card).

Both returns exceed the 2.22% I'd earn with my Barclaycard Arrival+ MasterCard, so there's no wrong choice. On the one hand, my preference is to redeem SkyMiles as aggressively as possible, because of their rapidly dropping value. On the other hand, I'd like to keep my Alaska Airlines MVP status next year, and to do so I'll need all the paid Delta flights I can get.

So I split the difference: I redeemed SkyMiles for my partner's ticket, and FlexPoints for mine, for an average return of 2.72% on $24,285 in manufactured spend.

Here again, only I'll have access to Comfort+ seating, but additionally I'll have a free checked bag thanks to my Medallion status, while my partner will have to pile her firearms, knives, and dry ice into my bag in order to avoid Delta's checked bag fees.

Conclusion

Checked bag fees and charges for preferred seating are huge revenue sources for the airlines, and can be huge expenses for passengers willing to pay them. The free checked bags and preferred seats offered to elites are therefore real, tangible benefits of elite status.

But elite status also makes it easier to be guided by motivated reasoning, allowing you to justify decisions you wouldn't otherwise consider.

In my first example, Delta is presenting me with a false choice: buy a second cash ticket in order to secure my partner Comfort+ seating, or redeem Flexpoints for the second ticket and pay to upgrade my partner. It's a false choice because absent elite status we would both be fine sitting in Main Cabin seats!

In my second example, I'm redeeming valuable Flexpoints for my ticket instead of taking the opportunity to empty my SkyMiles account even further, all in order to earn a few thousand more Alaska Airlines Mileage Plan elite-qualifying miles.