Cheap Flights III: Travel Hacking
Travel Hacking – Defined by James’ English Dictionary as the art of maximizing your frequent flyer miles and hotel points for the optimal returns.
FYI DO NOT SKIP: Ticket class shorthand: First – F; Business – J; Premium Economy – Y+; Economy – Y.
Before I go into further detail, I am not particularly sanguine about this field as an effective and practical option for many travelers. For any digital nomads reading this, it tends to require “gaming” US-issued credit card rewards, which requires getting a card mailed to you overseas – a not insubstantial PITA. For Regular Person, while the logistics of cards aren’t an issue, hitting the minimum spend bonus can be.
Travel credit card sign-up bonuses tend to involve spending X dollars within Y timeframe. Expect to see offers featuring a $1,000 – $5,000 spending goal within a 1-3 month timeframe. There are three ways around this: a high income, high spending lifestyle should make the spending target easy – duh. Otherwise, one applies before certain large planned expenditures (e.g. a new car purchase, tuition, etc) or engages in “manufactured spending.”
Manufactured spending involves buying items readily convertible to cash. An old scheme that the US Mint killed involved buying $500 boxes of $1 coins and then cashing them in at a bank. While the Mint hoped that this would allow the coins to circulate, they just ended up recycled back to banks. Contemporary manufactured spending plans typically involve buying gift cards, in effect front-loading future spending for gas/groceries/etc.
While most airlines, even low-cost carriers (LCC) have frequent flyer programs, legacy carriers tend to benefit from their alliance and non-alliance partners. An alliance is merely a formalized, substantial, multilateral cooperation arrangement between multiple airlines. From the customer perspective, alliances allow you to earn and spend miles on partner flights as well as harmonizing frequent flyer elite status.
Fun tidbit: Alliance partners are responsible for those really annoying gate announcements where Hypothetical American Airlines flight 238 is also called with a number of codeshare partner numbers like being British Airways Flight 4238, Qantas 2238, LAN 1238, and so on.
Non-alliance partners are airlines who have a strictly bilateral rather than a multilateral relationship. One example is the partnership between Etihad and American Airlines. AA is part of Oneworld, and Etihad is a large non-alliance-affiliated carrier.
The Three Major Alliances & Their US Carriers
Star Alliance – United – The first alliance and often considered the premier alliance due to its top notch (Skytrax 5 star) carriers such as ANA, Singapore Airlines, Asiana, Lufthansa, and Eva Air. It’s a favorite for “aspirational” hackers who want to spend their miles in F or J. You’ve also got South African Airways and Air New Zealand if you’re up for a trip to the ends of the Earth as well as Air Canada to take you to the friendliest (if ridiculously cold half the year) place in North America.
Oneworld – American Airlines – The second alliance formed. This alliance is something of a union of the Old Guard flag carriers. AA and British Airways have the US-UK market locked up as tight as Scrooge’s pocketbook. Japan Airlines and Cathay Pacific are fan-favorites for J and F redemptions, as well as overall awesome service. If men from down under are your thing, Qantas has your back. [Give my regards to Adam] Substantial cooperation between some Oneworld carriers (AA, BA, Cathay) and Alaska Airlines is a thing.
Skyteam – Delta – The last major alliance formed. While it has been disparagingly referred to as the leftover casserole of alliances, Skyteam may have the last laugh. Its member airlines serve some of the most promising economies of the developing world: China Eastern and China Southern, Kenya Airways, Garuda Indonesia, and Vietnam Airlines – to name a few. There’s a lot of potential. From a customer service perspective, the two best products in the air are going to be Air France and Garuda.
When doing your travel hacking, it helps to have a plan. The “best” carrier for you is a product of your home airport, your willingness to take a connection, and where you want to go. You may find that your hand is substantially forced. A resident of Atlanta would be highly encouraged to be a Delta/Skyteam, while New York and LA are basically hubs for all players. Larger cities tend to offer the most diverse array of feasible options.
Given how award bookings (i.e. when you cash in your miles for a ticket) work, you need specific award inventory to be available. The availability of seats for cash purchase does not mean that the airline is offering them for mileage redemption. It helps if your city has multiple options for a given alliance’s redemption options. If you are a Oneworld guy, your epic round-the-world itinerary can be ruined if your Small Home City only has one American Airlines flight per day connecting to a larger hub – there may not be award inventory on that short hop!
In the Air: The earning of miles changes constantly as airlines re-evaluate their programs. Currently, we are in a period of peak demand, full planes, a booming economy, and low-ish fuel prices (this may be coming to an end?). Presently, airlines have no incentive to be generous. Currently, airlines are even more disproportionately generous to their flyers stumping up for business and first than ever. Given earning rates for no status flyers/economy flights and the subsequent “burn” rate (the cost in miles for a free ticket), it’s practically pointless to bother being loyal and saving up if you’re an occasional economy flyer. It’s better to just take the cheapest fare with the best schedule.
Example of earning today: Having elite status helps immensely. Airlines offer elites bonuses on mileage earning. Delta currently offers 5 miles per dollar spent on their flights, but elites can earn up to 11 miles per dollar.
The combined move in the US of rewarding flyers directly for dollars spent versus miles flown has me less sanguine about the Frequent Flyer game than in the halcyon days of yore.
On the Ground: This is where things get interesting, especially for the absurdly generous American credit card market. Amateur level players might rely on shifting their daily spending to the airline card augmented by a sign-on bonus for a free ticket. American right now is offering 50,000 bonus miles on their co-branded credit card if you spend $2,500 in 3 months. The problem is that a round-trip economy award between the US and the UK on AA costs 60,000 miles + taxes and fees. This doesn’t impress me.
The most common method of generating large quantities of miles for the cool redemptions is “churning” with credit cards . I would advise you that this is an area for the experts, travel fanatics, insomniac planners, and those who do not care about the number of hard pulls/inquiries on their credit report. The most extensive churning strategies can leave you with a wallet like Ben Schlappig/Lucky of OMaaT. Last I checked, he claimed to have 37 credit cards. If you do some digging on the r/churning subreddit, you will see how this can happen. A strategy might include signing up for an American Airlines credit card for the 50k bonus, then signing up with a card like Chase Ultimate Rewards or American Express to collect a points bonus that can then be transferred to American Airlines. A 50k bonus from each could net you 150k miles, enough for 1 business class round trip to Asia.
The value of an award
No two travelers look at award redemptions in the same way. One traveler might aim to redeem only in J or F when they can because it is an indulgent treat. Another may prefer to redeem in Y, as it allows them to travel more often.
I prefer J redemptions myself. I’ve had the luck to have been part of programs like British Airways and Virgin Atlantic where significant fuel surcharges take the fun out of many (mostly Y) redemptions. Why cash in 40,000 miles +$475 in fuel charges for a Y ticket that costs $700? Moreover, I have had the best luck on redeeming for short, costly flights. My personal favorite redemption is to spend BA Avios (miles) on Qantas domestic business flights between Melbourne, Sydney, and Brisbane. While short, having priority treatment, lounge access, and baggage makes a tedious 3-4 trip into quite a comfortable experience. At 5,000 avios + US$90 versus AU$650-700 each way, it’s a steal in terms of Avios per dollar.
The easiest objective way to assign a value to miles is by comparing miles spent with the notional cash ticket cost. Using the above Avios-for-Qantas-domestic-J case as an example, spending 5000 BA Avios to save (US)$450 means that each Avios point was worth 9 cents. Given how wildly many air tickets fluctuate in price, it is difficult to assign an ideal redemption value, such as “Only spend if your miles are worth more than X cents each!”
Another favored option is to, again, use BA Avios for regional J on Cathay Pacific/Cathay Dragon within Asia. I can use a small-ish quantity of miles (5-15k) + a cash surcharge equivalent to a LCC economy ticket and fly an excellent carrier in business, with awesome Cathay service and their lounges in HKIA. I also found such “equivalent” redemptions using United miles on Thai or Singapore Airlines regional business tickets to be awesome.
Other interesting redemptions (prices each way):
- American Airlines: US Mainland to Hawaii @ 22.5k – Y
- American Airlines: Canada-Hawaii @ 25k – Y
- British Airways Avios on Qantas: Sydney-Brisbane; Sydney-Melbourne @ $87 +5k or $17 + 9k – J
- BA Avios on Cathay Pacific: Hong Kong-Singapore @ 11,000 + $161.44 – J
- Delta Skymiles on Saudia: New York to Cairo @ 42,500 + $32.80 – Y
- Delta Skymiles on Virgin Atlantic: US to Johannesburg @ 50k + $52 – Y
- Delta Skymiles: US Mainland to Honolulu @ 50,000 + $5.60 – F
- United on Ethiopian Airlines: US to Africa @ 80,000 + $5.60 – J
- United: US to Europe @ 30,000 + $5.60 – Y