Foreign airline co-branded credit cards, #8: Conclusions

/

Reviewing the 7 foreign airline co-branded credit cards issued by US banks that I covered in this series, the cards can be handily arranged into 3 groups:

  • Cards worth getting and keeping for manufactured spend;
  • Cards worth getting for the signup bonus and cancelling;
  • Cards that are probably not worth getting.

Manufactured spend powerhouses

When looking at a card's value for manufacturing spend, it's essential to look at both the earning and redemption rates the card offers. For example, a Marriott Rewards point is more valuable than a Hilton Honors point, but not 6 times more valuable — that makes a dollar spent in a bonus category with the Hilton Honors Surpass American Express more valuable than the same dollar spent with a Marriott Rewards credit card that earns just 1 point per dollar.

Similarly, the two co-branded credit cards in this series that are valuable for ongoing spend are the US Bank AeroMexico Visa cards and the Barclaycard Asiana Visa Signature card. The former earns 3.2 AeroMexico kilometers per dollar spent at gas stations and grocery stores, which can be redeemed on SkyTeam carriers (with fuel surcharges) and the latter earns 2 Asiana miles per dollar spent in the same categories, which can be redeemed on Star Alliance carriers and their non-alliance partners.

It's especially worth noting that the recent increases in Delta redemption rates on SkyTeam partners make it even more likely that redeeming other SkyTeam partner miles, even ones that pass along fuel surcharges, will be more valuable than earning and redeeming Delta SkyMiles.

Valuable signup bonuses

Three of the cards I covered in this series have signup bonuses you might find valuable, depending on your situation:

  • The British Airways Visa Signature card earns 100,000 total bonus Avios after spending $20,000 on the card within one year. Those Avios can be extremely valuable if redeemed on US flights without fuel surcharges or on certain off-peak sweet spots.
  • The Miles & More World Elite MasterCard offers 50,000 bonus miles after spending $5,000 within 90 days, which can be extremely valuable for domestic first class redemptions, including to Hawaii.
  • The "Black" Virgin Atlantic World Elite MasterCard offers 75,000 Flying Club miles after spending $12,000 within 6 months and adding two authorized users. If nothing else, those miles can be moved to Hilton Honors points at a 1:1.5 ratio, earning you 9.4 Honors points per dollar on unbonused spend.

Cards that are worthless, or at least worth less

Finally, the LANPASS Visa Signature Card and SKYPASS Visa Signature Card, both from US Bank, offer minimal signup bonuses and weak earning rates, so even in the case of SKYPASS, where points can be valuable on certain routes, their co-branded credit card is unlikely to be the most efficient way to earn them. However, it's worth being aware of the cards and their potential redemption opportunities in case the signup bonuses on either card are temporarily or permanently increased.

Overpay by booking Cathay Pacific premium seats with Avios

/

There's a tempting intuition that says high balances across a variety of programs are a goal worth pursuing, since they allow you to deploy the right rewards currency for the right job. That's never been my view: I prefer building up balances in programs where I have planned, or at least foreseeable, redemptions in mind. That's why I don't hesitate to accumulate Delta SkyMiles, since even if I don't have planned Delta travel, I fly Delta often enough that I'm certain to be able to redeem them at some point. The same is true with Hilton HHonors points: there's no risk that I won't be able to redeem them, since there are Hilton properties everywhere.

Of course, being focused on a small number of rewards currencies has a downside: by definition, it's more expensive to book flights if you don't have the currency that makes those flights cheapest.

For example, until March 22, 2016, American AAdvantage charges 67,500 miles to fly between the United States and Hong Kong in first class on their oneworld partner Cathay Pacific, with minimal taxes and fees.

That's a great deal, and if you have a slew of AAdvantage miles and a flexible-enough schedule, it's certainly the best way to get to Hong Kong. Since I don't hoard AAdvantage miles, I'm out of luck, right?

Not so fast.

British Airways charges a lot for long premium cabin flights

The conventional wisdom says to redeem distance-based British Airways Avios for short-haul domestic flights or a few select "sweet spot awards" that fall in the top of their distance bands, and redeem region-based awards for longer and premium cabin flights.

And indeed, if you had huge quantities of every rewards currency, for any given award you would want to redeem the fewest miles or points possible, using a tool like AwardAce.

But if you don't want to accumulate huge rewards balances speculatively, you have another option: simply overpay.

British Airways doesn't charge that much for long premium cabin flights

A Cathay Pacific first class flight from Los Angeles or San Francisco to Hong Kong costs 140,000 Avios each way, plus about $50 in taxes and fees:

After American Airlines' March 22, 2016, devaluation, they'll charge 110,000 AAdvantage miles plus the same taxes and fees. Of course, the American award, in addition to being cheaper, allows you to depart from anywhere in the United States, not just the west coast, and connect onward from Hong Kong.

140,000 Avios cost $1,400 in cash if you transfer them in from an Ultimate Rewards account, giving you about 6.66 cents per Ultimate Rewards point in value for that $9,367 flight.

If you earn your miles and points primarily through manufactured spend, 140,000 Avios are likely easier to earn than 110,000 AAdvantage miles, thanks to the Ink Plus bonus categories of office supply stores and gas stations and the quarterly Chase Freedom bonus categories allowing you to earn 5 Ultimate Rewards points per dollar spent in rotating groups of merchants.

But even more importantly, using an Ultimate Rewards point transfer to British Airways to book this flight keeps your overall miles and points strategy simple. Instead of signing up for one or more American Airlines co-branded credit cards, requiring multiple credit pulls and bearing the risk of your application being denied, you can keep doing what you're doing: aggressively earning Ultimate Rewards points in bonus categories.

If you end up finding award space for dates that work for you, transfer the points and make the reservation. If you don't, transfer them instead to Hyatt, United, Southwest, or even redeem them for cash. You haven't lost anything by earning "extra" Ultimate Rewards points. You just have to slightly overpay for your award when you decide to book it.

Speaking of award availability...

There's a reason that I've used Cathay Pacific as my example throughout this post: it's because award availability on Cathay Pacific is quite scarce, and can't be searched on American's website. Instead, you're likely going to be using British Airways to search for award availability anyway, since they display it online.

Not only that, but British Airways allows reservations to be made further in advance than American does! Take another look at the search result above: it's for a first class flight departing December 10, 2016. That's 354 days from now, while American only allows reservations to be made through November 17, 2016 — 331 days from now.

As you'd expect, award availability tightens up quickly once American's award booking window opens. Given that Cathay Pacific frequently makes just a single first class award seat available, those 23 days may spell the difference between getting your first class award or having to sit in business class.

In that sense, you aren't overpaying for Cathay Pacific first class by using British Airways Avios; you're simply paying the only price at which the first class seats you need are, in fact, available!

British Airways devaluation got you down? Book with Iberia instead!

/

The 4,500-Avios, short-haul British Airways Executive Club award has long been one of the most valuable things about the program for North Americans. On flights within the United States you pay neither fuel surcharges nor close-in booking fees, and your Avios are refundable up to 24 hours before departure (you forfeit only the taxes and fees).

Starting February 2, 2016, the same short-haul flights originating or ending in North America will cost 7,500 Avios per segment, although there's no indication the other two features will change.

The good news is that as far as I can tell Iberia hasn't announced any changes yet.

Iberia is still a weird program

The two key things to know about booking North America Iberia award flights are:

  • Awards have to be round trip. You can't even search for one-way availability; you have to use a dummy return date (or search for availability on American Airlines' or British Airways' website first);
  • Award prices are based on total trip length, adjusted by cabin.

What do I mean, "adjusted by cabin?" Hopefully the following example will illustrate the idea: a flight from Chicago (ORD) to Louisville (SDF), a 574-mile roundtrip, costs:

  • 11,000 Avios and $18.70 in Blue Class (economy);
  • 22,000 Avios and $18.70 in Blue Class one way and First on the return;
  • and 33,000 Avios and $18.70 in First in both directions.

The same itinerary connecting in Charlotte (CLT) in each direction (1,868 miles roundtrip), costs:

  • 17,000 Avios and $24.70 in Blue Class;
  • 23,109 Avios and $24.70 in First on one of the CLT-SDF legs (17.9% of the total distance) with the remainder in Blue Class;
  • 27,891 Avios and $24.70 in First on one the ORD-CLT legs (32.1% of the total distance) with the remainder in Blue Class;
  • 29,218 Avios and $24.70 in First on both of the CLT-SDF (35.9% of the total distance) legs with the remainder in Blue Class;
  • 38,782 Avios and $24.70 in First on both of the ORD-CLT (64.1% of the total distance) legs with the remainder in Blue Class;
  • 34,000 Avios and $24.70 in Blue Class one way and First on the return;
  • and 51,000 Avios and $24.70 in First in both directions.

The total number of Avios required very closely corresponds to the sum of the percentages of the total itinerary flown in each cabin multiplied by that cabin's roundtrip Avios award cost.

Observe two key things here:

  1. Under today's award chart, a roundtrip, nonstop flight between Chicago and Louisville in First is cheaper if booked with Iberia (33,000 Avios) than if booked with British Airways (36,000 Avios), and an itinerary connecting in Charlotte is also cheaper with Iberia (51,000 Avios) than with British Airways (72,000 Avios — no, I'm not kidding);
  2. After the February 2, 2016, British Airways devaluation, Blue Class nonstop flights booked with Iberia will be cheaper (11,000 Avios) than if booked with British Airways (15,000 Avios).

Takeaways

Here are a few things to take away from this post:

  • You can only use Iberia to book roundtrip partner itineraries;
  • Do not use Iberia to search for partner award availability;
  • Once you find North American award availability with American Airlines or British Airways, check their prices against Iberia's;
  • Iberia's online booking system is very frustrating but very flexible — it's easy to book short legs in Blue Class and longer legs in First for potentially big savings, because of the "cabin adjustment" mentioned above.

Conclusion

Using Iberia Avios instead of British Airways Avios for short-haul North American flights isn't a silver bullet to solve all of your award booking problems. But it is another tool you can use to let your miles take your further, faster.

Thinking about cash-and-points redemptions (is hard)

/

There's a curious problem that everyone encounters eventually as they become increasingly involved in travel hacking: how do you think about award redemptions that combine both cash and points? For example, this hypothetical reservation in New York City offers three options:

You can pay $143 in cash, $125 in cash and 24,000 HHonors points (getting 0.075 cents per redeemed HHonors point), or 60,000 HHonors points (redeeming your HHonors points for 0.24 cents each).

Another way of putting the same facts is that you can pay 60,000 HHonors points, or 24,000 HHonors points and $125 in cash (buying 36,000 HHonors points for 0.35 cents each), or $143 (buying 60,000 HHonors points for 0.24 cents each).

In other words, a cash and points redemption can be thought of as buying HHonors points with the savings compared to a cash rate, or redeeming HHonors points to save money off the cash rate.

As I say, that's a curiosity built into the concept of points and cash redemptions, and I'm not going to resolve it one way or another for you today (or ever). I'm interested in something else.

British Airways sells Avios very cheaply when making economy award redemptions

I have a trip planned to Europe next summer, booked using the last of my Club Carlson points before the great devaluation of 2015. Since my partner has friends and relatives in Germany, we're going to end up there, giving me the opportunity to book our return flights by redeeming Avios on Air Berlin flights to New York City. Here are the pricing options (for two passengers):

I'll dispense with the comparison to a cash rate (around $1,622 for two passengers) and focus on the top and bottom redemption options. It's possible to redeem 40,000 Avios and pay $178.18 in taxes and fees, or 14,000 Avios (26,000 fewer) and $498.18 ($320 more). If I already had 40,000 Avios in my account, this would be a no-brainer: I'd redeem the miles I earned.

But as you can see, I have between 20,000 and 26,000 Avios in my account currently (a hair over 24,000, in fact). That means I can transfer 16,000 Ultimate Rewards points to British Airways in order to save $240 (getting 1.5 cents per transferred Ultimate Rewards point), or I can redeem 6,000 fewer Avios and pay $80 more in cash (buying Avios for 1.3 cents per point).

So what's the problem?

The problem is that those are both outstanding opportunities!

Buying Avios for 1.3 cents each is a great discount if I have any plans to redeem the saved Avios for short-haul American Airlines flights, which can offer phenomenal value.

Redeeming Ultimate Rewards points for 1.5 cents each is also a great opportunity, since Ultimate Rewards points are worth just 1 cent each when redeemed for cash and just 1.25 cents each when redeemed for paid airfare.

On the other hand, Ultimate Rewards points are potentially worth much more when transferred to Hyatt and redeemed for expensive stays.

My solution is definitely not your solution

If it sounds like I've been wrestling with this problem for a while, it's because I have. But ultimately, I fall on the side of redeeming my Ultimate Rewards points for 1.5 cents each. That's because I'm points-rich and cash-poor: if I "saved" my points by redeeming 20,000 or 14,000 of them against the Air Berlin itinerary, instead of transferring in 16,000 Ultimate Rewards points, I would then redeem the corresponding Ultimate Rewards points for cash at just one cent each.

In the business, that's what we call "false economy."

On the other hand, if you live in a city that's served by American Airlines — and they actually offer SAAver seat availability — you might be used to redeeming your Avios for astronomical sums and leap at the opportunity to buy them for just 1.3 cents each.

Similarly, if you value your Ultimate Rewards points highly because you're able to aggressively redeem them for super-high-value redemptions, the idea of transferring them to Avios in order to redeem them at 1.5 cents each should sound preposterous.

Conclusion

I'm one of the most vigorous enemies of earning points speculatively. But once you've earned them, speculatively or otherwise, it's even worse to speculatively forego redeeming them! They're sitting in your accounts, begging to save you money.

I'm going to do them a favor and let them.

Give away travel

/

There have been two big, fun developments in the world of travel hacking in the past two weeks: Staples began selling $300 Visa gift cards online, and Office Max began selling variable-load Visa gift cards in-store. Those developments have been more than adequately covered elsewhere (see, e.g., $300 Visa gift cards, Office Max variable-load cards).

The fun part, of course, comes not from earning your miles and points, but from redeeming them. On the one hand, both of these new developments are profitable on a cash-back basis. A brand new Chase Ink+ card would allow you to annually manufacture $2,500 in cash back at a cost of $589.05 (98 variable-load cards, assuming Office Max quickly fixes the current pricing error and raises the cost of each card from $3.95 to the correct $5.95). If you master high-value Ultimate Rewards redemptions, you can get astronomical value at minimal cost: a $12,001 Lufthansa first class flight for $259.18 in fees, or something like a 97.8% discount.

So it's now easier and faster than ever to accumulate huge numbers of valuable Ultimate Rewards points. But Matt at Saverocity's post yesterday got me thinking about the fact that earning points more easily makes them no easier to redeem. Naturally you can redeem your cheap Ultimate Rewards points for cash, but many travel hackers find that unsatisfying when they know how to both earn and redeem points for much more valuable redemptions.

While Matt introduces the idea of "outsourcing" to describe finding additional time to travel by automating and having others perform routine tasks, there's another way outsourcing can benefit you: outsource your travel, by giving it away.

Why give away travel?

We give away travel all the time without thinking anything of it. If you have a partner, spouse, or children, you might be booking travel for 2 or 5 or 10 people, all of which is paid for with your own travel hacking expertise. We may not think of that as giving away travel because it's basically selfish: we want our loved ones with us while we travel!

At the other extreme of altruism are the variety of programs that airlines participate in, which allow you to donate, typically without receiving any tax advantage, miles and points you already have in your frequent flyer accounts (United, American, Delta). Those programs may be noble, and I don't doubt that the charities involved receive some cash or travel benefit when they receive a mileage donation, they also don't allow you to exercise your specialized knowledge as a travel hacker: knowing which redemptions provide the best value for your redeemed mile.

Somewhere in the middle is giving away travel to people you know, but just for the sake of letting them travel. If your niece is graduating from high school, you can outdo all the other uncles by sending her on an international romp for trivial out-of-pocket cost.

Trips to give away

When you've got a huge store of cheap Ultimate Rewards points, there are a few combinations that produce terrific vacations for trivial amounts of money. You may not want to take them yourself, but your relatives, young, old, or in between, might be thrilled to.

British Airways/Iberia Avios

The big three transatlantic options with minimal fees and fuel surcharges are Boston-Dublin on Aer Lingus (25,000 Avios round trip), Berlin-New York JFK on Air Berlin (40,000 Avios roundtrip), and Madrid-JFK/Chicago O'Hare/BOS/ (34,000 Avios roundtrip).

In case it needs to be said, Madrid, Dublin, and Berlin are all pretty amazing places to visit for the first time!

Since American Airlines is an Avios partner airline and has a terrific route network in Latin America, you'll also find great deals there when dispatching your relatives from Miami. Nassau in the Bahamas, Cancun in Mexico, Montego Bay and Kingston in Jamaica, and Providenciales in Turk and Caicos are all 9,000 Avios roundtrips from Miami.

From the West Coast, you'll probably want to send your loved ones to Hawaii for 25,000 Avios roundtrip from Seattle, Portland, the Bay Area, or Los Angeles and San Diego.

Hyatt

So now we've isolated some of the destinations our loved ones might like to visit. How can we put them up? Of the Ultimate Rewards hotel transfer partners, Hyatt Gold Passport is going to be our best bet, with IHG Rewards Club as a backup option (more on that in a moment). Let's narrow down our destinations by access to low-level Hyatt properties.

  • Dublin. No Hyatt properties.
  • Berlin. Grand Hyatt Berlin, 15,000 HGP points per night.
  • Madrid. No Hyatt properties.
  • Nassau. Grand Hyatt at Baha Mar (opening indefinitely delayed).
  • Jamaica. Hyatt Ziva Rose Hall and Hyatt Zilara Rose Hall, 25,000 HGP points per night.
  • Cancun. Hyatt Zilara Cancun, 25,000 HGP points per night. Hyatt Playa del Carmen, 20,000 HGP points per night.
  • Providenciales. No Hyatt properties.
  • Hawaii. Andaz Maui at Wailea Resort, 25,000 HGP points per night. Hyatt Regency Waikiki Beach Resort and Spa, 20,000 HGP points per night. Hyatt Regency Maui Resort and Spa, 20,000 HGP points per night. Hyatt Place Waikiki Beach, 12,000 HGP points per night.

IHG Rewards

IHG Rewards requires a special mention because of their random PointsBreaks list of properties that cost just 5,000 points per night. While IHG is a transfer partner of Chase Ultimate Rewards, it's essential to remember that you never have to transfer all the points required to book a PointsBreaks property! That's because you only have to have 5,000 IHG Rewards points in your account to be able to purchase an unlimited number of additional points at 0.7 cents each to top up an award redemption.

If, like me, you're always eyeing the PointsBreaks list for countries you might like to visit and stay on the cheap for days or weeks, remember: you don't have to go yourself! There might be somebody in your life who'd like to visit the Holiday Inn Mundanjiang even more than you!

Conclusion

Like a lot of people who started traveling early and often, I cut my teeth on discounted airlines and youth hostels. One of the most remarkable things about travel hacking is that it gives us and our loved ones the opportunity to see the world in more comfort and at far lower cost than was possible just 5 or 10 years ago.

So if you're having trouble redeeming points fast enough to drain down your rewards balances, don't forget that you can give travel away!

Onward from Madrid, Dublin, Berlin

/

Last week I wrote about the three transatlantic British Airways partners that, due to the distances involved and the fact that taxes and fees are low on these routes, make even post-devaluation Avios redemptions competitive with cash or (depending on your other balances) award redemptions using other loyalty currencies. Those routes again are:

These redemptions — even post-devaluation — are great values in business class compared to cash (between 2.45 and 9.8 cents per Avios) and decent values compared to other airline miles. If nothing else, you should be aware of them because it's an additional option if you can't find award availability on your first-, second-, or third-choice airlines.

Judging by the comments to that post, you might think travel hackers are indifferent to this problem, on the grounds that it's better to build a trip around award availability on airlines you actually want to fly.

But for people with more restricted schedules (not me, but my understanding is this applies to most people in the working world), being aware of as many options as possible maximizes the chances of scoring a cheap award flight instead of being stuck paying retail to sit in economy.

A whole different problem, however, is the very real issue that you may not want to go to Ireland, Germany, or Spain!

Searching for cheap onward connections

A good first stop when thinking about Avios redemptions is the Wandering Aramean's Avios Map. Type in an airport code and you'll see all the possible non-stop Avios redemptions. Be sure to cross-check those flights with Google Flights or another flight search site, however; Seth's data are often out of date or inaccurate.

The Avios Map tool has two drawbacks: it doesn't show the taxes and fees for the route, and it only goes up to the 12,500 Avios distance band (so flights between New York and Germany don't appear, even though they're terrific values on airberlin). Still, if you're piecing together a multi-stop itinerary, you're likely sticking to shorter routes anyway, since Avios prices increase so rapidly with each additional leg and distance band.

After finding the routes you're interested in, plug them into British Airways' Avios calculator (and Iberia's if your flight is operated by Iberia) and look for the taxes and fees you'll incur. Don't forget to check the return as well; departure taxes vary wildly between airports.

This is basically brute force work, but if you're rich in Avios (or cheap Ultimate Rewards points), it's also a great way to travel around the world for next to nothing.

A few fun finds

These are literally just the first couple of options that jumped out at me in 30 minutes of clicking around using the exact procedure I described above:

  • Berlin-Abu Dhabi. 12,500 Avios in economy, 25,000 Avios in business (will be 37,500). $48.24 in taxes and fees outbound, $21.78 in taxes and fees return. From Abu Dhabi, continue on Etihad virtually anywhere in the world.
  • Dublin-Prague/Vienna. 7,500 Avios in economy, 15,000 (unchanged) Avios for intra-Europe business class. $51.90 in taxes and fees outbound from either, $68.25 return from Vienna, $53.86 return from Prague.
  • Madrid-lots of places!

Take Iberia everywhere, but beware Iberia weirdness

Once you get to Madrid, you have a ton of great options, but you need to beware of Iberia's intense weirdness. For example, here's an Iberia-operated flight to Tel Aviv booked with British Airways Avios:

Here's the same flight booked with Iberia Avios:

I'm not going to get into an argument about whether 7,500 Avios are worth more or less than $45.59 (more), I'll just point out that this Iberia flight, unlike ones departing New York and Boston to Madrid, incurs more taxes and fees using Iberia Avios than British Airways Avios.

When the Iberia devaluation takes place on April 1, and the British Airways devaluation on April 28, 2015, it'll become even more important to check, every single time, which currency makes your awards cheaper overall.

Here's another cool option to Moscow's Domodedovo airport, booked with British Airways Avios:

And the same flight booked with Iberia Avios:

Conclusion

Obviously these flights are only a small sample of those operated out of Berlin, Dublin, and Madrid by British Airways partners, but I hope they illustrate the possibilities of plugging together Avios flights as a way to navigate to, from, and around Europe. If you spot any other long-distance, low-fee gems, feel free to share them in the comments!

Comparing Alaska promotional redemptions to year-round Avios redemptions

/

Introduction

Alaska Airlines has announced a promotion, whereby one-way economy awards between select city pairs on Alaska metal cost between 5,000 and 12,500 Mileage Plan miles, a 60% discount on some routes.

Of course, to qualify seats have to be available at the lowest level of award availability, and that means they're also bookable using British Airways' distance-based Avios award chart.

So I thought it would be fun to compare the standard cost in Avios and the promotional cost in Alaska Airlines Mileage Plan miles.

Why it matters

Alaska Airlines miles are very valuable when redeemed for partner awards (100,000 miles and trivial taxes and fees for Emirates A380 First Class to Asia, for example) and for last-seat availability, for example to Hawaii during the Christmas holiday season or when you just need to be somewhere and are miles-rich but cash-poor (I know the feeling!).

At the same time, they're relatively difficult to earn except through transfers from Starwood Preferred Guest, clicking through their online shopping portal, or crediting revenue flights on Delta, American, or Alaska to the Mileage Plan program.

That's why under most circumstances it would be preferable to redeem easily-acquired British Airways Avios for Alaska Airlines award flights, rather than Alaska's own, more valuable, Mileage Plan miles.

Sample analysis

Here are the city pairs between which Alaska Airlines is charging 5,000 Mileage Plan miles one-way from August 30 to October 31, 2014 (note that all these fares work both ways):

  • Boise-Las Vegas
  • Boise-Salt Lake City
  • Los Angeles-Salt Lake City
  • Oakland-Seattle
  • Oakland-Portland
  • Portland-San Jose
  • Portland-San Francisco
  • Salt Lake City-San Francisco
  • Salt Lake City-San Jose
  • Salt Lake City-San Diego
  • San Francisco-Portland
  • San Francisco-Seattle
  • San Jose-Portland
  • San Jose-Seattle

Of these city pairs, can you guess how many are more than 650 miles, the cutoff for British Airways 4,500 Avios one-way awards?

If you said 3, you'd be exactly right: the 3 Bay Area airports (SFO, OAK, and SJC) clock in at just under 700 miles to Seattle, putting those flights in the 7,500 Avios price band.

The next set of city pairs cost 7,500 Mileage Plan miles during the promotional period:

  • Bellingham-San Francisco
  • Bellingham-Oakland
  • Boise-San Jose
  • Boise-San Francisco
  • Boise-Oakland
  • Oakland-Vancouver
  • San Francisco-Spokane
  • San Francisco-Vancouver
  • San Jose-Vancouver

What do you think? How do these discounts compare to a 7,500 Avios redemption, available year-round?

If you said they weren't any kind of discount at all, you'd only be 66% correct. That's because flights between Boise and the 3 Bay Area airports in fact cost just 4,500 Avios, clocking in at between 511 and 523 miles!

You get the picture.

Conclusion

I'll spare you the rest of the promotional city pairs (at the 10,000 and 12,500 Mileage Plan mile levels) and end with two thoughts.

First: there's nothing wrong with promotions like this. For folks who (rightly!) credit their revenue Delta and American Airlines tickets to Alaska's Mileage Plan, the ability to redeem those miles for short flights around the Western United States at a steep discount is a terrific opportunity, and I'm sure this promotion will be incredibly popular. The least valuable mile is the one you don't redeem, and if this promotion gets folks to redeem their miles for trips they want to take, it'll be an unqualified success.

Second: while this example involves small stakes – just a few thousand miles here or there – a rough background knowledge of airline partnerships like this will keep you from making shockingly expensive mistakes. The classic example is the couple who allegedly redeemed 2 million Starpoints for SPG Flights revenue First Class tickets to Australia on American Airlines — when they could have transferred just a few hundred thousand points to American and redeemed them for an AAnytime award!

Initializing Iberia Plus Avios accounts

/

Last month I mentioned that I was trying to figure out how to "initialize" my Iberia account. Now that I've succeeded, I can share my experience.

What are Avios?

For most hotels and airlines we use in the United States, a loyalty currency is almost indistinguishable from a loyalty program. It doesn't occur to anyone that there's a difference between the Delta Skymiles loyalty program and an individual Delta Skymile.

Avios work slightly differently: Avios are the rewards currency of three different loyalty programs: British Airways Executive Club, Iberia Plus, and the Avios travel rewards program.

So just like you can use Euros issued in France to buy bratwurst in Vienna, you can use your Avios for rewards through any of the three programs.

However, as the people of Greece recently discovered to their chagrin, just because countries use the same currency doesn't mean they can't impose border controls. That's exactly what Iberia has done, and smuggling Avios past those controls is the subject of this post.

Why Iberia?

While British Airways and Iberia charge the same number of Avios for flight redemptions through either program, Iberia charges much lower fuel surcharges for award redemptions on their own flights than those booked using Avios in British Airways Executive Club club accounts.

Here's British Airway's Avios calculation for a non-stop flight between Madrid and New York's JFK airport:

At the request of a very generous reader, this picture features a circle

Here's the same route priced out using Avios in an Iberia account:

At the request of a very generous reader, this picture features four arrows

What's the problem?

In a perfect world, that's all you'd need to know. By choosing "Combine my Avios" (find it under "Manage my account") on British Airways' website, you'd be able to save yourself hundreds of dollars on your Iberia award flights by booking using Iberia Plus instead.

Unfortunately, the world we live in isn't perfect yet, and you're not allowed to transfer Avios into your Iberia account until it's been open for 90 days and has at least one other (non-"Combine my Avios") transaction.

What's the solution?

In response to my original post a number of readers reached out with suggestions on how to "initialize" my Iberia account:

  • e-Rewards redemption. This is what I ultimately did: I redeemed $25 in e-Rewards credit for 750 Avios in my Iberia account. That transaction initialized my (over-90-day-old) account, and I was then able to successfully transfer Avios from British Airways to Iberia using Avios.com as the Points Guy describes here. This worked for me since I already had about $24 in e-Rewards credit, so I just had to flunk a few surveys in order to earn the additional $1 in credit. I initiated my transfer on May 29, and the Avios were credited to my Iberia Plus account on June 2;
  • Membership Rewards transfer. In the comments, Grant not-very-helpfully (I don't have Membership Rewards points) pointed to his post on transferring Membership Rewards points to Iberia Plus in order to initialize an account;
  • Melia Rewards transfer. Another reader reported being able to transfer the 2,000 point signup bonus with the MeliaRewards program to Iberia. I wasn't ultimately able to do this — as the reader pointed out, the 2,000 bonus points aren't supposed to be eligible for transfer. However, if you do ever stay with a Melia-affiliated property, or earn Melia points through some other activity, you will be able to transfer the points you earn to Iberia Plus.

Conclusion

Iberia has great award availability and relatively low fuel surcharges on their own flights; that can be a powerful combination when trying to decide how to fly to or from Europe using Avios, while Avios can be one of the easiest loyalty currencies to earn since British Airways Executive Club is a transfer partner of Chase's Ultimate Rewards points.