Life in the Air: Part 2

Life in the Air: Part 2

In last month’s cover story, we interviewed four high-flying frequent -travelers to ask several questions relating to life on the road. We are continuing our series of interviews in this issue with two additional road warriors. We asked all the travelers the same questions in the hopes that with their combined knowledge, our readers might learn something new about the world of miles and points. We thank our travelers for taking the time from their busy schedules to answer our questions. So now, let’s hit the road with our road warriors: Nathan, an expert mileage runner, and Tom, United Airlines’ most frequent flyer.

Nathan Weber (wanaflyforless on FlyerTalk) manages an export business selling computers and electronics in Cameroon. He is passionate about air travel and has a couple of goals: Fly every Star Alliance, SkyTeam and oneworld member airline and visit over 100 countries. When traveling, he prefers to visit a local person’s home rather than tourist attractions. He’s aware that the luxury of flying first and business class contrasts sharply with the lives of many he meets with at his destinations who will never afford a plane ticket.

With nearly 10 million miles under his belt, very frequent flyer Tom Stuker finds himself constantly on the road or up in the air. Last year alone, he flew approximately 800,000 miles and up until this year, he hadn’t spent a full week at his house in New Jersey in almost 15 years. Tom is an automobile sales consultant and has racked up enough miles on United Airlines to be the top member of the Mileage Plus program. The airline honored him by painting his name on the fuselage of a United Airlines aircraft.

Which programs are your favorites, both airline and hotel, and why are they your favorites?

Airlines: Three airline programs stand out to me as providing exceptional value to the very frequent flyer. As I fly enough to earn top-level elite status on more than one airline, I split my miles between programs to maximize value. American AAdvantage: All of my tickets on oneworld airlines get credited to AA. AA is the only airline that offers eight systemwide upgrades to its 100,000 miles a year flyers, valid on all domestic and international published fares, including the most discounted fares. Buy the lowest cost available economy class, fly business class. Or buy discounted business class, fly first class. Access to first class (not just business class) oneworld lounges whenever flying international (regardless of ticket class of service) are another favorite part of AA’s Executive Platinum benefits. On the domestic front, AA offers the highest overall success rate for waitlisted domestic upgrades clearing, in my experience. As Exec Plat on AA, I enjoyed an almost 98 percent domestic upgrade success rate, compared to about 80 percent as 1K at United with similar flight patterns. Lower elite tiers at American do not get unlimited domestic upgrade waitlists as offered by most other U.S. airlines. The flip side is that as a 25,000 or 50,000 a year elite flyer with AA, if you are willing to buy enough 500-mile upgrade certificates to cover all your AA flights (at $30/each), you will enjoy a much higher upgrade success rate than you would at any other U.S. airline with the same status level. This is because AA aircraft on average have more first class seats than many competitors, and elite flyers spending 500-mile certificates to upgrade are not competing with everyone else on the flight at their elite level for that upgrade.

United Mileage Plus: Most of my economy class tickets on Star Alliance get credited to United. United excels at taking care of their 1K (100,000/year) flyers. As a UA 1K, if I get stuck at an airport mid-trip because of a blizzard, United will give me a free hotel voucher, even though the weather is not their fault. UA offers 1Ks six systemwide upgrades, that while not valid on every fare (like AA SWUs), are valid on many discounted fares (unlike Delta SWUs) making them useful for discount economy purchasers like me. All United elite levels enjoy complimentary domestic upgrades subject to seat availability prioritized by elite status. United belongs to the Star Alliance, the leading global alliance with the most airlines serving the most destinations. I routinely fly United’s Star partners to get to/from destinations not served by United (or any other U.S. airline). Economy Plus is another major plus for United. All United elite levels get free access to a more spacious economy cabin. When an upgrade does not clear, I am stuck in an economy seat that has enough room to comfortably still use my laptop. A huge plus!

British Midland Diamond Club: Most of my paid business and first class tickets on Star Alliance get credited to BMI. They offer very generous earn rates for people who fly paid premium cabin tickets. For example, if I credit 150,000 miles flown on United on paid first class tickets to BMI over one year, I will earn approximately 800,000 BMI redeemable miles. Flying the same tickets crediting to United would earn me far fewer United miles to spend. The BMI miles redemption chart also costs less miles than most programs between certain countries, and BMI offers a free stopover on most one-way awards, unlike other frequent flyer programs. While I have yet to actually fly BMI, I find using their program to earn and redeem on Star Alliance very rewarding.

Hotels: Hotel elite status is not nearly as much of a priority to me as airline frequent flyer status. The difference between an economy seat and business class seat on an airline for a 14-hour flight to Asia is far more important to me than whether or not I get a standard room or suite upgrade at my hotel. Bidding ~$70 on to win a room at a three- or four-star hotel that is retailing for $200 is often worth not earning hotel status credit to me.

Hyatt: Top level elite status is much easier to earn than with Hilton or Marriott and Hyatt Diamond benefits are excellent. Biggest downside: Lack of locations.

Starwood: My strategy at Starwood is not to pursue SPG elite status but rather to redeem cash + points (earned from credit card spend) for every stay. I find this to be an excellent value, paying 1,600 Starpoints + $30 for a hotel night where the lowest rate is $150+ or 2,800 Starpoints + $45 for a hotel night where the lowest rate is $200+.

I have about 10 million reasons why United is my favorite airline. I like United because of the status that I’ve earned and kept and the relationships I’ve built. And the confidence I have knowing that nobody will get me from point A to point B any better than United.

My favorite hotel program has switched over the years. My favorite was Marriott, then it went to Hilton. I won a free car from Hilton and a million American AAdvantage miles as a bonus from Hilton. Hilton used to be unbelievable. But since it’s changed ownership to Blackstone, it’s really cut back in every single way and it’s less attractive because they are nickle and diming everyone. I’m disappointed in Hilton in so many ways because they are cutting corners.
My current favorite is Hyatt because I think they take care of their elite members better than anybody else. The promotions and deals they’ve had in the past few years such as the Costco gift certificates and Faster Free Nights have really made it a more enticing program.

My favorite rental car is National because I like their selection of cars and it’s very seamless travel for me.

Do you think the programs are becoming more valuable or less valuable through the years?

Both. Airline programs have become less valuable by increasing the number of points required for most awards. Redeeming two first class tickets to Europe on American or United, for example, costs twice as many miles today compared to many years ago. Much increased fees for everything from checking bags to changing a redeemed award ticket to fuel surcharges on mileage redemptions have also significantly decreased our miles value.

Airline programs have become more valuable by increasing the product selection and quality of the first and business class redemption options worldwide. The number of international destinations served by U.S. airlines has increased greatly as has the number of partner airline redemption possibilities. The seat comfort offered in premium cabins has also increased dramatically. Today I can redeem my United miles for premium cabin tickets on SWISS, or my American miles for premium cabin tickets on Cathay, or my US Airways miles for premium cabin tickets on Asiana or my Delta miles for premium cabin tickets on Korean Air, among vast options. Each of these redemption possibilities offers a vastly more comfortable seat than any commercial airline offered 20 years ago.

More valuable because there are so many more ways to earn and spend miles. A lot of people are hung up on the actual dollar value for miles. If you’re looking for the most money for your miles, you’ll always pick airline tickets. The airlines want you to spend them on those empty seats. So that’s where you’re going to get the most value. Typically, hotels and car rentals and those types of awards come to a penny a mile. So if you earn 75,000 miles, that’s a first class ticket to Hawaii domestically. But otherwise, it’s worth $750 in merchandise or hotels or other awards. The best value is always going to be air travel, but for those who don’t want to fly, or for those who accumulate a lot of miles like me, there are other awards. I did all my Christmas shopping a couple of years ago by cashing in over a million miles and getting gift cards for all of my friends and family.

Can you share one tip with fellow frequent flyers about how to get the most value out of their miles and points?

Wisely participating in airline credit card offers is the single most lucrative way to multiply your miles. In my opinion, the vast majority of credit card rewards program earners are earning at 50 percent or less the rate they could and should be.

For churning, the annual fee does not matter because the sign up bonus value should be worth a LOT more than paying the annual fee one time. For long term keep cards, I suggest those who spend less than $40,000/year on a credit card ignore the annual fee card options. It is not worth paying the fee to earn relatively few additional points/miles earned from less than $40,000/year spend.

I suggest combining two strategies using both to maximize your value.

(1) Churn cards: Apply for about four of the best credit card sign-up bonus offers each year. Exceed the minimum spend required to get the sign-up bonus with each offer and keep each card for about one year before closing the card to avoid annual fees. These offers should be taken advantage of even when the points/miles are not part of a program you currently participate in. One hundred thousand miles is enough for a business class roundtrip–who cares if it is not “your” airline.

Some of the best offers in the past included:
– 100,000 miles sign up bonus for the British Airways Chase Visa:

– Up to 100,000 point match and 10,000 point bonus for the Venture Capital One Visa:

– 100,000 or 75,000 miles per card depending on what American Airlines Citibank offer you used; you could get up to three cards for up to 300,000 miles if you played it right:

– Up to 100,000 points (targeted) for the American Express issued Platinum Card:
– 100,000 miles for the Delta Business American Express:

2) Long term keep cards: The first thing to note is that most rewards cards earn you 50 percent or less value per dollar spent compared to your options below:

a) Investment Rewards American Express offered by Fidelity: Earns two points per $1 spent; each point can be converted to one cent OR one Air Canada Aeroplan mile. Choice is yours–two percent cash back or two miles earned for each dollar you spend. Air Canada is part of Star Alliance–use the miles to fly free on your favorite Star carriers, not just Air Canada. No sign up bonus, no annual fee:

b) Travelocity American Express offered by Barclays: Earns two percent back on general spend, four percent back on groceries or gas, 10 percent back on airfare, any airline, and 10 percent back on any hotel booked through Travelocity. $150 worth of points sign up bonus, $39 annual fee:

c) Asiana American Express offered by Bank of America: Earns two Asiana miles per $1 spent; Asiana is part of Star Alliance–use the miles to fly free on your favorite Star carriers, not just Asiana. 5,000 sign up bonus; $99 annual fee:

d) Starwood American Express offered by AMEX: One point per $1 spent. 20,000 SPG points = 25,000 miles on a very large choice of airlines. 25,000 points sign up bonus, $45 annual fee.

Best value:- Use for points + cash hotel nights.- Transfer to airlines only during promos where you earn many extra miles. For example, US Airways had a limited time up to 75 percent bonus offer for hotel points. So 20,000 SPG points can become 43,750 US Airways miles:

e) Investment Rewards Visa offered by Fidelity: An excellent no fee card for the places that do not take American Express.

Earns 1.5+ points per $1 spent, each point can convert to one cent OR one Air Canada Aeroplan mile. Choice is yours–1.5+ percent cash back or 1.5+ miles earned for each dollar you spend:

Don’t take the programs too seriously. They’re not a retirement program or an investment, it’s a reward program. It’s a gold star. Some people complain that they are being devalued. Dollars are being devalued, not frequent flyer miles. At the same time, it’s over a billion dollar economy for the frequent flyer companies. For people like you and me, it’s just a nice little bonus or perk for all the craziness you put up with when you travel. I think some people get really freaky about the fact that they depreciate, but just use them. One of these days we’re going to look back and all the people who complained about it are going to regret it. This is an area that nobody gets taxed on. If we ever got taxed on this, all the programs would go down the drain and nobody would use them anymore.

Are you a hoarder or a spender? If you’re a spender, what do you like to spend your miles/points on?

Hoarding your miles to use them 20 years from now is like saving your money for 20 years in a no interest paying checking account. Every year your money becomes worth less with inflation; the same is happening with miles. Unlike money, there is no way to earn interest when we save our miles. Inflation means partner mileage offers will continue to offer greater and greater numbers of miles over time as has happened so far. Inflation also means it will take more and more miles to redeem the same trip.

Every year I earn millions of miles, many from flying but many more from credit cards and other airline partner promotions. Every year, I also redeem millions of miles–the goal is to redeem as fast as I earn.

I have flown most of the largest airlines in the world. My favorite seats to redeem my miles for include ANA first class, Asiana first class and Cathay Pacific first class to and from Asia. To and from Europe, I prefer to redeem for SWISS first class or Singapore Airlines first class on the JFK-FRA route. To/from South America, I prefer to redeem for travel on LAN and TAM. I have countless fond memories of excellent service on my way between continents.

I’m a spender. It’s not an investment program and there’s no time like the present to enjoy a non-appreciating asset. I spend some on honeymoons. I try to take four honeymoons a year and then trips with my family. The best honeymoons, dollar for dollar, are in Asia. I like Hawaii and go there four or five times a year and Australia is like a second home to me.

Are the glory days of frequent flyer programs over?

Not at all. While the food quality and service level has declined since deregulation and airline fees have many frequent flyer program members discouraged, the hard products offered by our airlines continue to get better and better increasing the value or our miles. Alaska Airlines miles, for example, can now be redeemed for a free ticket on the Qantas A380 in a first class suite, offering a passenger comfort level that puts to shame anything offered by airlines 20 years ago. Partner offers, like 100,000 miles for just getting one single credit card or earning 50 miles per $1 spent when ordering flowers, are becoming more and more common. Miles are easier to earn than ever before and can be used to fly a larger number of partner airlines offering more comfortable seats than ever before.

No, I think they are just beginning because all the different ways to earn and spend miles are constantly increasing. If you travel a lot and don’t want to spend your miles on flying, then there are things for the home and restaurants. There are a million different things and you don’t have to spend your miles on flying–but if you do like to fly, there are more ways to earn miles today. I talked to a guy who has 10 million miles on American Airlines and he’s only flown two million. And I have friends who get hundreds of thousands of miles every year just off of their credit cards.

What is your travel philosophy in relation to getting the most benefit from frequent flyer programs? And hotel programs?

It’s all personal preference. Even though flying is the best value, I’ve used miles and points for gift cards, hotels, car rentals, flowers. I think I’ve used them for every single thing you can. Obviously, you have to understand how to work the deal. Have I been crazy enough to check out of one hotel and go across town to another hotel just to maximize a promotion? Yes, along with thousands of other frequent travelers. Always know how to manipulate the programs and promotions. And a good tip is to stay in touch with FlyerTalk. Right when you think you have all of the answers, you’ll find a hell of a lot more of them on FlyerTalk. Here I am at almost 10 million miles on United, and I’m still learning things every time I plug into FlyerTalk and the community of people who are helping each other and watching each other’s backs.

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