Travel Rewards Credit Cards

Feb 01

Does Premium Economy Bring Back The Mileage Run?

Welcome to February. As we anxiously await word from Punxsutawney Phil tomorrow, you may think that I would want to talk about going someplace warm. Think again. We’re going to chilly South Korea. But don’t worry, we won’t be there long.

The Revived Premium Economy

premium economy

The mock-up for the AA Premium Economy cabin

You used to get first or coach. That was it. Maybe on an international flight, you could get business. As airlines have tried to decommoditize their products, though, they’ve added new benefits and options. On Delta, for instance, you can book into one of six different fare classes.

One of those new products is a premium economy (PE) product. Different airlines call it different things, but the product is about the same across the board:  at least some two by two seating on international flights with more legroom and better in-flight amenities. It’s similar to domestic first class. The product serves as a compromise for passengers who want something better than coach but don’t want to pay for business.

Since it’s a new class of service, though, airline revenue management systems don’t have a history of sales on which to base forward pricing. Thus, you will find markets where PE is priced at a multiple of traditional coach, and others where it’s priced almost the same.

Unintended Consequences: Elite Status Mileage Runs

mileage run, premium economy

A not inexpensive mileage run for 21,000+ elite qualifying miles

Back in the good old days, when airlines based the number of miles that you earned on the miles you flew, rather than how much you paid for tickets, mileage runs were popular.* Once the airlines switched to a system where the number of miles that you earned is based on how much you spend, the traditional mileage run died. Who cares if you flew 20,000 miles on a $100 ticket (Yes, that’s an exaggeration.)? You don’t earn 20,000 miles anymore. You earn 500-1,100 miles, depending on your elite status (or lack thereof. Base members earn five miles per dollar spent, up to diamond at eleven per dollar spent.).

But one facet of the program didn’t change. You still earn miles toward elite status (on most airlines) based on how far you fly. So if you’re trying to bump yourself up a tier or two on an airline’s importance level, it can be a quick way to do so. The problem, though, has always been that doing a 15,000 mile flight in coach is not particularly comfortable and it’s prohibitively expensive for most in business.

I bring up the subject because of a recent sale offered by Delta on flights to Seoul, and this is PE plays a role. Delta is offering tickets to Seoul from several US cities at reasonable fares in Premium Select, in the range of $1,500 to $1,600. In return, you’ll earn over 21,000 miles that count toward your elite status. That’s almost enough to get you silver status, or bump you from silver to gold or gold to platinum. It also gets you halfway from platinum to diamond.* For most people, it would seem ridiculous to pay $1,500 just to bump yourself up a level.** But for others, the benefits are worth it, particularly as you get to the higher tiers. Not to mention:

  • You’ll do it in relative comfort, with an amenity kit blanket and decent food
  • You’ll pick up 7,500-16,000 redeemable miles, based on what you pay and your current elite status.
  • You’ll get to spend a couple of hours at one of the world’s best airports.
  • And, of course, you’ll have a fantastic story.

If you do it, just remember to bring a couple of good books, comfortable clothes and don’t lie to immigration about why your trip was so short. They’ve seen it before, and they’ll see it again.

 

 


Beginner’s Hint: A mileage run is a flight that you book solely to earn the miles. In other words, you don’t actually need to fly to the destination where the plane is going, but the fare is so cheap that you are “buying” miles very inexpensively. Presumably, your flight is round-trip.

*There are dollar spending requirements, as well, but for most tiers, spending 25,000 miles on your Delta credit card will offset the spending requirements.

**Not to mention that you actually have to spend a weekend flying to and from Seoul.

 

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Jan 31

Rocketmiles: What To Do If You Don’t Want Hotel Points

Everyone who flies has a frequent flyer number, buy many hotel guests don’t have participate in the lodging company’s loyalty program. If you’ve decided you don’t want hotel points but still want something for staying at a property, you should check out Rocketmiles.

Rocketmiles

rocketmiles

Rocketmiles is a hotel booking site that pays you in airline miles. What differentiates them, though, is the offering. When you book a hotel through the site, they’ll give you a certain number of miles per night that you stay. I’ve seen figures as low as 1,000 miles per night and high as 10,000 per night. Naturally, you’ll be able to choose the program that you want the miles credited to.

Two Warnings

The system isn’t without its flaws though. In particular, be careful of two items:

  • Any elite benefits that you have generally won’t apply if you book through a third-party site, including Rocketmiles. They’ll say it’s a case by case basis, although it’s generally a brand by brand basis. You are also unlikely to receive points for your stay.
  • Rocketmiles does not offer a best rate guarantee. In other words, while the price may be the same as what you could get by booking directly, there’s a chance that it will be higher, as well. Be sure to check.

If neither of those is an issue for you, though, the site is likely worth a look.

 

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Jan 29

Weird News In The World Of Travel…

It’s Monday, so let’s keep things light. Here are a few of the more, um, “interesting” stories that I’ve seen over the past week or so.

Should’ve Gone to Home Depot…

air force one

No, the turkey didn’t come with it. Or did it?

The White House is taking a little flak for doing a bit of home renovations to Air Force One, with the new chilling units coming in at $24 million. The units are apparently meant to hold enough food to cover a “short-term” food shortage, although there’s no definition of what a shortage is. It was a “sole-source” contract, meaning that it was done without a bid, but that’s nothing unusual for the White House on either side of the aisle.

Now, I know you have a few questions, as do I. In particular:

  • What kind of warranty does that come with? Extended? Do they do mid-air repairs?
  • Are you supposed to tip the delivery guy?
  • Does the price mean that the !@#$&#@$ ice maker won’t break?

Enquiring minds want to know.

Serial Stowaway Stopped Saturday

Marilyn Hartman, known as the “serial stowaway” for her multiple attempts over the years to board a plane without a ticket, was arrested at O’Hare, only three days after boarding a BA flight and making it to the UK before being stopped for not having her passport. I’m somewhat surprised, that, given the number of times that Ms. Hartman has made a run for the border, you would think that she would be prepared. Still, forgetting a passport can happen to anyone.

No word on how she made it through security without a ticket, although I’m sure that they stopped her from bringing any bottled water or shampoo through.

TSA Wins An Oscar

Speaking of our friends at my favorite federal agency, TSOs (TSA Officers) are celebrating having finally won an Oscar for their fine work. Okay, not quite, but it’s a little sad that they’re getting excited about one of their own being a hero in a movie.*

Yes, I understand that the TSA doesn’t get portrayed positively in the media very frequently. Gee, I wonder why? This giant version of the Stanford Prison Experiment has managed to make itself into a running joke, one which we’re told to grin and bear, even as it potentially kills more people than it saves.**

Hey, if this character wants to tell people that he’s a detective, more power to him. Anything can be true in the movies.

 


*If you haven’t seen “Get Out,” you’re missing one of the best films of the year.

**For those who want to read about the TSA from a strictly numbers point of view, this article is worth your time.

 

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And finally, you can apply for credit cards through the Credit Cards for Charity link above. All card proceeds are donated to charity, so please do well by doing good!

Jan 27

Minneapolis in Winter (Coach) Or April In Paris (First)?

Somewhere in Atlanta, there’s a guy in Delta’s revenue management department who’s jumping up and down like it’s Christmas. Except for him, it’s something better: It’s a Super Bowl in a Delta hub.

Going to MSP? Good Luck.*

delta, super bowl

The NFL isn’t the only one to make money from the Super Bowl

A few years ago, Delta switched the way that they price mileage redemptions. Instead of your paying a fixed amount, the cost in miles would move up and down with demand. Well, there’s demand.

If you haven’t bought your airline tickets yet, well, you’ll pay for waiting. Let’s assume that you want to fly out Friday, spend Saturday getting lost in the skyways and then return on Monday. Those miles that you’ve so diligently been hoarding will come in useful for the 977 miles trip from Philadelphia to Minneapolis. Not very useful, though, with coach tickets running 150,000 miles for a non-stop flight to U.S. Bank Stadium. Think you’ll do better by paying out of pocket?

super bowl, delta

A flight to Minneapolis or a few new TVs to watch the game in your warm living room.

Not so much. To be fair, that’s the price for a non-stop flight. If you’re willing to make a 38 minute stop in Detroit (after leaving PHL at 6 am), you can go for the bargain price of $1,659.30 (Don’t forget the $.30.). But if you’re going to pay to sit in the good seats, you might as well take the non-stop. The connecting flight actually costs more.

Or Springtime in Paris?

delta one

Yes, I know I manipulated the dates to make the comparison look absurd. Deal with it. It’s the weekend.

Of course, if you’re not excited to be squeezed into a middle seat between two drunk guys on the way to 11-weather, you could spend a week in Paris. No squeezing there, though. You’ll be lounging in Delta One, drinking champagne and watching the finest movies that Delta’s in-flight entertainment has to offer.

So how many miles will that cost you? Turns out that your April trip to the Champs-Elysees could be even cheaper than the trek to the north. A two-stop flight will run you as little as 180,000 miles (plus taxes of $167.11). A one-stop starts at only a slight premium, 245,000 miles.

Kind of makes that big screen TV look good, doesn’t it?

 


*While ticket prices from Boston are similar, I did Philly because those fans might be a little more desperate. New England fans know that, even if they don’t go this year, they’ll have a chance again next year. And the year after that. And probably the year after that. We’re not worried.

 

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Jan 26

Credit Cards: Rewards Versus Benefits

I got a survey a few days ago asking me about the benefits of my Delta Reserve Credit Card, and it got me thinking about a subject that I already spend too much time thinking about: credit cards that I own that I would never actually use. This post is going to be best for novices, but it’s been on my mind.

credit card

This is Willie Nelson, and he has not approved this post.                                                        Photo Credit: Creative Commons

For the sake of this post (and I have no idea where I’m going with it), use these definitions. A benefit is something that you get for having the card, e.g., lounge access, a free first checked bag, rental car insurance, etc.* A reward is something you get only when you use the card, such as a mile for every dollar that you spend.

So, Do I Need Benefits Or Rewards?

credit card

Photo Credit: Creative Commons

There are not a lot of cards that earn top-tier scores in both. The few that do are usually issued by Chase, including just about anything with the word “sapphire.**” Some cards have occasionally strong rewards, such as Discover, which offers a 5% rebate category every quarter, but only middling rewards the rest of the year (maxing out at 1.5%). Others, such as just about any American Express card, offer excellent benefits but lousy rewards (although they’ve been getting better as the competition runs away from them).

Clearly, the answer is that you need at least one of each category, and there’s no such thing as the “best” card, no matter what you read, here or anywhere else. For example, the Delta Reserve credit card works best for me, since I’m a frequent flyer on the airline, like the lounge access it offers and will use the companion pass that comes with it. It’s not a cheap card, but after all the benefits, I easily end up “making” money (which, of course, means “spending less”). I also have a Marriott card, since that’s my primary hotel program.If you don’t travel particularly often, though, a card with no/a low annual fee that simply offers a free checked bag is probably enough.

On the other hand, just because you have a card doesn’t mean that you have to use it, and here’s where the rewards come in. The Delta Reserve card, which costs $450 per year, offers some seriously lousy rewards. You get one mile per dollar spent, two per dollar on Delta tickets. There are also some bonuses if you spend a lot each year, but why would you do that, other than to achieve elite status?*** Delta miles are worth so little that I don’t even use my Delta card on Delta. I don’t mind playing the game where I use different cards at different vendors, based on what they earn, but if you do, the best card may be the Citi Double Cash Card, which just pays a flat 2% rebate on everything.

The Ultimate Do-Nothing Card

As far as I’m concerned, the ultimate “do-nothing” card is the IHG Rewards Club card, the program for the upscale InterContinental Hotels (as well as others). It’s free for the first year and $49 per year after that but, starting with your first anniversary, you get a free night at virtually any property each year, just for having the card. Need a night at the $600 per night InterContinental in Paris? How about New York? Tokyo? No problem. My wife and I each have one so, for under $100 per year, we can have a weekend at a hotel that we wouldn’t even consider paying for. By the way, while I think you should have this card for the obvious benefit, I don’t think you should get it now. The current bonus to open it is 60,000 points. Simply wait a bit, since they occasionally offer 80,000.

The Bottom Line

Understand your bonuses and understand your rewards. We all throw out the little folders that come with the cards, but that propaganda is often the key to your maximizing the card’s value.

 


* I know that there are some benefits that you get only when you use the card (e.g., You need to use your airline credit card to get that free checked bag.), but I’d still consider the bag a benefit, not a reward.

**Historically, I have not been a big fan of the Sapphire cards, but the company has done a good job of maintaining, or even raising benefits, while its competitors have cut them. Winning by not losing.

***That’s not to say that I never use this card, but I don’t use it for the value of the miles. Rather, I spend money on it to earn miles toward elite status. There are a few cards that will give you points toward status based on your spending, and this is one of the better ones. Having said that, I spend only what I need to and not a penny more.

 

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And finally, you can apply for credit cards through the Credit Cards for Charity link above. All card proceeds are donated to charity, so please do well by doing good!

Jan 25

It’s Winter, Think Alaska Air For Free Flights!

I don’t get to write about Alaska Airlines often enough because I live on the east coast, and that’s a shame. It’s one of the most reliable and customer-friendly carriers in the country, and I’ve never had a bad experience with them.

Free Or Companion Tickets

alaska air

A long list of benefits

If you live on the west coast, or you fly coast to coast (or to Hawaii), Alaska Airlines, now the owner of Virgin America as well, is a good choice. And here’s a way to do it even cheaper.

For those who will use it, Alaska offers one of the best credit card bonuses in the industry. Its 30,000 miles sign-up bonus is pedestrian, but it throws a few more goodies in there with its Visa Signature card ($75 annual fee), and they come in the form of free flights.

  1. When you sign up for the card, you’ll get a one-time introductory offer: buy one ticket, get a companion ticket for just the taxes and fees.
  2. Each year after, on your card anniversary, you’ll get another companion ticket, this time for $99 (plus taxes and fees).

Given the costs of airline tickets, those benefits could be worth several hundred dollars. Best of all, there are no blackout dates and they can be used on just about any coach fare, not just the expensive ones.

If you live on the west coast of fly transcontinentally (Is that even a word?), you should definitely look at this card.

Follow up: The Bank of America Premium Rewards Card is now available on the Credit Cards for Charity page. Both it and the above mentioned Alaska card are available through Bank of America.

 

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And finally, you can apply for credit cards through the Credit Cards for Charity link above. All card proceeds are donated to charity, so please do well by doing good!

Jan 23

United Adds Premium Economy. Are The Good Times Over?

United became the third airline to announce a premium economy cabin, which spokesperson Maggie Schmerin teased a few days ago.

What Is Premium Economy?

premium economy

The mock-up for the AA Premium Economy cabin

I’ve discussed Premium Economy before, but here’s a quick review:

The gap between traditional economy and business class, particularly on international products, is tremendous. Passengers have clamored for a better economy product but have been unwilling to pay the multiples of the price that it would cost to sit in business.

Premium Economy is set to bridge the gap. It is a product similar to domestic first class, with seat pitch (the measurement from seat back to seat back) and width exceeding what you would find at the back of the bus. Delta’s product, for instance, will offer 38″ pitch, versus 31-32″ in coach. It will also have some 2X2 seating, meaning the elimination of the middle seat (although some PE rows are 4-across).

United is also offering better food on better plates (Hint: Concentrate on the food. Who cares what it’s served on?) and Saks Fifth Avenue pillows and blankets.

Could This Be Bad News For The Airlines?

One thing you can count on, though, with the airlines, is that their timing is horrible. The problem with introducing a product when there is significant demand for it is that, by the time it hits the floor, the economy has turned south and the demand has dried up. And, as usual, they’re accelerating capacity growth (more supply) as they do so.

For example, the airlines have tried premium economy before. In particular, American did it back in 2000-2001, at the peak of the internet bubble. At that time, it was focused on pushing San Jose as a focus city and trying to appeal to start-ups who went to Asia but couldn’t afford to pay for business class.

And then the world fell apart. Stock markets declined, the US went into a recession and American realized that it couldn’t afford not to stuff the cabin full of seats.

To be fair, from a cost perspective, the airlines are in a much better position than they were back then, but I’m curious to see how long the premium economy experiment lasts.

 

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Jan 22

American Announces Chicago-New York Shuttle. Airline Geeks Geek-Out

Last week, American made the kind of announcement that generally gets passed over in the general news (mostly because it isn’t that important) but gets aerosexuals all hot and bothered. There’s a new shuttle coming!

The ORD-LGA Shuttle

american airlines shuttle

Because the one thing that will lead to fewer conflicts on planes is free alcohol…

In an announcement that listed a bunch of new routes for American Airlines, the carrier also noted the establishment of a shuttle service between Chicago and New York.*

And now things get interesting. American has traditionally been strong on east coast shuttles, thanks to its US Airways heritage, with shuttle services serving DC, New York and Boston. We’re no longer in the days when flight attendants hand out newspapers and planes roll out of the gate one after the other, but American has run pretty consistent service in the northeast.

Why Chicago Matters

Chicago is a very unusual city in that it has two major airlines that consider it a hub. It’s a big enough city that it can handle two airlines, and it’s central US location makes it a good place to connect flights. But United has always considered Chicago to belong to it and seen American as an interloper in its home. A shuttle to New York, with premium products and 15 daily frequencies, is a direct shot across the bow of the good ship United, who is already running flights hourly.

One other tidbit: There will be very little connecting traffic on these routes. Rather, it will be traffic that starts in one of the two cities and ends in the other.* That matters, because those flights are far more profitable. A flight that connects doesn’t make as much money, since passengers have a choice of where they can connect. For example, a customer flying from Boston to San Francisco and willing to take a connection could fly American and connect in Chicago, Dallas or even Charlotte. A Delta passenger could connect in Atlanta or Salt Lake City. Etc. Because that passenger has so many choices, they will go with the cheapest one. There are only so many non-stop flights, though, between two cities. Fewer choices means higher prices.

I expect to see some promotions pop up between the two cities, but those should be to the passengers’ benefit. Now, if only JetBlue were to get involved…

 


*Beginner’s Hint: Shuttle services are usually defined as regularly scheduled, frequent services between two major cities that usually have some sort of added amenities with them. They are set to appeal to business travelers who need to know that there is always availability to get from here to there, even if they have to pay up for it.

*Beginner’s Hint: Traffic that starts in one city and ends in another, with no switching of planes, is O&D, or origin and destination. For instance, the shuttle flights are O&D. A flight from San Francisco to New York that connects in Chicago would not be.

 

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Jan 20

Up To 600 United Miles: Opinion Miles Club

Surveys are a good way to earn some extra points, miles or dollars. Most airlines offer them and they’re easy enough partners to use. Opinion Miles Club for United Airlines is one such partner. But there may be a better reason than the miles to join.

Opinion Miles Club

united, opinion miles

At United, you can earn up to 600 miles by joining their survey partner and completing your first survey. Most of them range from 5-15 minutes long, and it’s easy enough to complete them while doing, well, anything else. Premier (elite) members and United credit card holders get the 600 miles bonus, while all other frequent flyers get 300.

Is 600 (or 300) miles worth much? Not really, if the miles are worth 1-2 cents each. But there’s another factor in play here: mileage expiration. If you’re like me, and fly some airlines infrequently, you run into the risk of seeing your account deactivated (United will do so after 18 months of inactivity.). That fact, in and of itself, makes it worthwhile to join and do a survey, even if you never do one again.

 

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Jan 19

Delta Rolls Out Basic Economy Internationally

A few years ago, Delta got a lot of bad press when it rolled out basic economy fares*, its own version of the “you get what you get and you don’t get upset” pricing that ultra-low cost carriers use, where you buy a seat and just about everything else costs money.**

Delta Airlines

In early December, it took those fares international, violating what Bloomberg refers to as a “travel shibboleth.***” If you end up buying the cheapest fares available, which will be prominently labeled as Basic Economy, you will pay an extra $60 to check your bag. Seat assignment? Forget it. And no changes will be allowed to your tickets, just like domestically. Not even for a fee.

Delta (and its partners) will sell these fares at a discount to traditional economy tickets, but let’s not kid ourselves: Over time, there will be price creep up the chain, based on what the market will allow them to get away with. And, given the success of the ultra-low cost guys internationally, these types of fares are likely to spread, much like a fungus.

 


*But did they deserve the bad publicity? I’m not sure. They did a good job of indicating what the basic economy fares do and don’t offer you, and you could always select an alternative. The ultra-low cost carriers are the fastest growing airlines in the country. Clearly, there’s some demand for the product.

**Delta is actually a little better. They’ll still give you the free can of soda and a few of the elite perks. There’s no truth to the rumor that basic economy passengers have to pass out drinks in first class. At least I think that there isn’t.

***West Wing, Season 2, Episode 8

 

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