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!

Two new tools to help plan airline redemptions

An impressive achievement of the travel hacking community is spreading information about the frequent flyer programs of non-US carriers, which allow Americans to take advantage of their award chart sweet spots, earning rates, routing rules, and even domestic lounge access in the case of Star Alliance carriers.

On the other hand, that's a lot of information. I can't do much more than keep a few rules of thumbs in mind when searching for award tickets: Avios for short flights, American for off-peak awards, Lufthansa for domestic first class.

In the last few weeks two travel hackers contacted me to share tools they've designed to streamline the process of comparing award charts. I told them I'd take a look and share my thoughts here.

Eric Boromisa's Award Calculator

Eric contacted me in September to share his Award Calculator. He's selling the Calculator through a site called Gumroad. If you use the offer code "freequentflyer" you'll get $7 off either the "economy" or "full" version of the product. Full disclosure: Eric gave me a free copy of the file to experiment with.

So what is the Award Calculator? It's an Excel spreadsheet that's been programmed to calculate the cheapest mileage cost for awards between "North America" and another country. The "economy" version can calculate award costs in economy, and the "full" version returns the mileage cost of premium cabin awards as well.

The most important thing about the Calculator is that it doesn't find the mileage redemption which costs the fewest miles (although it does show the mileage cost in all the included programs). It calculates the cheapest mileage redemption using values you yourself provide.

This creates the program referred to in data processing as "garbage in, garbage out." If you don't provide the right values, then the calculating function will generate useless values. Unfortunately, rather than simply telling you to provide you own values, Eric provides default "market" values.

These "market" values are nonsense: Lufthansa and Air Canada are both Starwood Preferred Guest transfer partners, but Eric's default value for Miles & More is 2.8(!) cents each, while Aeroplan miles are valued at just 1.9 cents each. Is it because Aeroplan is also an American Express transfer partner? Maybe, but there's no way to tell.

In other words, if you want to use the "best value" calculating function, be sure to manually assign each program's currency the correct value, which I would argue is the cash value of the manufactured spend you use to generate that currency rather than cash back. If you don't have access to a currency (for example, I don't have any Membership Rewards-earning cards), just assign an arbitrarily high value to that currency.

I've played around with the Award Calculator for a few weeks now and my overall impression is that it's an impressive first step, but it's not a finished product and it's not yet worth $12-$22. A few funny oversights (Air France doesn't fly La Première to France anymore? Someone should tell them!) need to be fixed, and it would be nice if assigning a value to transferrable currencies automatically populated all their transfer partners with imputed values at the correct transfer ratio.

Again, if you're interested in trying it out for yourself, you can buy it at Gumroad for $12-$22 using the offer code "freequentflyer" (I don't receive any compensation if you do, I think Eric is just trying to track where his sales are coming from).

AwardAce is simple and beautiful

Just this morning a reader reached out to share his site AwardAce with me, and it blew my socks off. The site is simple, powerful, and beautiful (also free).

In its current form, you only have to make three selections: your departing airport, arriving airport, and whether your flight is one-way or roundtrip. You can also filter by award program (basically making it a simple, uniform award chart for every included program) or transfer partner (Chase, American Express, Citi, or Starwood Preferred Guest). 

Then AwardAce produces a color-coded table showing you the mileage cost in a variety of programs:

The site just launched in August and it's not perfect yet. For example, in my searches the large grid only showed "off-peak" American Airlines and "short-haul" MileagePlus award prices, and the creator doesn't appear to be aware that British Airways Executive Club miles can be redeemed on Alaska Airlines. Additionally, Lufthansa Miles & More isn't shown as a transfer partner of Starwood Preferred Guest, which is an easily-fixed oversight.

The site works best on international flights where its database really shines, rather than on domestic flights where there are more moving pieces than it can easily accommodate.

The site is also restricted to nonstop and one-stop flights, so if you are planning a trip that requires two connections, you have to eliminate one or more stops to find the correct cost. For example, the site easily calculates the mileage cost in 7 programs between Detroit and Prague:

But a search between Indianapolis and Prague generates an error, even though Delta flies 7 nonstops daily between Indianapolis and Detroit. That's not a bug, it's simply a limitation built into the tool you need to be aware of.

I'm not sure what the creator's eventual plans are to monetize AwardAce, but for now it's free and awesome.