How to Get More Value from Flights You're Already Buying
I recently had the opportunity to explain what I see as a common misconception about the cost of business class flights. At first glance, it is easy to see the obvious cost difference between buying economy and business class tickets. However, everyone should consider many more factors, than simply the listed fare, when determining the value of a flight. In this post, I will go into the other factors we consider when booking a flight.
To demonstrate how you can get more value from the flights you’re already buying, I’ll use a trip we already have booked. We booked a round trip flight itinerary from Spain to Palm Springs. At the time of booking, the cash price for for economy was $1,000 (€925). The cash price for business class was $1,600 (€1,475). The difference in fare being ~$600.
How you purchase the flight is important
To purchase the tickets we used our American Express Platinum Card, and purchased directly from American Airlines. The Platinum Card earns 5x Membership Rewards (MR) points on tickets purchased directly from the airlines. Therefore, the economy class ticket would earn 5,000 (5 x 1,000) MR points and the business class ticket would earn 8,000 (5 x 1,600) MR points. The difference is 3,000 MR points. Most travel sites value MR points at $0.02/each. The difference in MR earnings is $60 (3,000 x 0.02).
It’s important to note here, if you had chosen to buy the flight with card that isn’t earning rewards (such as a debit card), you would be getting $0 in value from the purchase. You don’t get anything beyond the flight itself. Therefore, it’s advisable to use a card that gets any form of cash-back for purchases. Even if you don’t have a travel credit card, there are lot of cards that earn at least 2% cash back on all purchases.
British Airways airplane
Award mile earnings (Avios)
Though we booked our flights through American Airlines, we credited the flights to our British Airways Executive Club accounts (British Airways and American Airlines are Oneworld Alliance partners). British Airways award miles are known as Avios. The number of Avios earned on each flight is determined by your ticket’s booking class. You can see a chart of American Airlines fare classes here. In this instance, the economy flight would have been booked into ‘B’ fare class and the business ticket booked into a combination of ‘I’ and ‘J’ fare classes. You can find out how many Avios your flight will earn by plugging your itinerary into the flight calculator on the British Airways website. According to the calculator the economy ticket would have earned 6,400 Avios, while the business ticket would earn 22,400 Avios. Most sites value Avios at $0.01/each. Therefore, the difference in Avios earnings would be valued at $160 (16,000 x 0.01).
Airline elite status (British Airways Executive Club Silver)
This is where it gets a little more complicated. When you see travelers breezing through the priority check-in lines and hanging out in the lounge, they’re most likely there because of their elite status with a chosen airline. Again, while we purchased our tickets through American Airlines, we credited the flights to British Airways Executive Club. To earn elite status with Executive Club you need to earn a certain number of points (what British Airways calls Tier Points). Tier Points (TP) earnings are calculated by fare class and the distance of each flight segment on your ticket. You can see an overview here (yes, it’s complicated). To determine how many TP each segment of the ticket will earn, you can use the same British Airways flight calculator used for Avios.
Tier Point requirements for elite status with British Airways Executive Club
Bronze - 300
Silver - 600
Gold - 1,500
For this demonstration, the economy class ticket earns 75 TP and the business class ticket earns 700. As you can see from the chart above, the economy class ticket doesn’t get close to the lowest elite status (Bronze) with BA. However, the business class ticket gets you all the way to Silver status.
Most of our travel during the year is done domestically in the United States. Remember, American Airlines and British Airways are Oneworld Alliance partners. Therefore, American Airlines recognizes British Airways elite status, and provides some significant benefits when flying on American Airlines in the United States.
British Airways Executive Club Silver status benefits on American Airlines
Business class priority check-in
Preferred/pre-reserved seating
Waitlist/standby priority
Access to business class lounges
Priority boarding
Extra baggage allowance
Priority baggage handling
To assess the value of elite status for this demonstration, we need to do a rough prediction of our travel plans through the expiration of our new elite status. To determine the length of validity, you need to know when your membership year begins. Unlike most domestic airlines, BA does not use the calendar year to determine status. Instead they use a membership year, determined by the date you joined the program, and first earned Avios. You can find these dates on your membership page on the BA website. For this demonstration, my membership year starts in December. When you attain elite status, it is valid for the remainder of your membership year plus one additional year.
Therefore, when I attain British Airways Silver elite status in February, my Silver elite status is good for the rest of my status year (9 months), plus an additional year (12 months). I will have Silver elite status for at least 21 more months. To calculate the value of this status, let’s assume that we will buy 8 more tickets this year, and 10 more tickets next year from American for domestic work and leisure travel. Each of these tickets will be comprised of at least 4 segments.
Estimate of future domestic travel on American Airlines for the year
18 tickets
72 segments (18 tickets x 4 segments/ticket)
American Airlines airplane
Of the status benefits listed before, three add serious value to this demonstration.
1 Pre-reserved seating
With British Airways Executive Club silver status, we get pre-reserved seating on American Airlines flights. At the time of booking, we are able to select from any of the preferred seating (including Main Cabin Extra). Main Cabin Extra (MCE) seats have an additional 3-6 inches of legroom vs. average coach seats. In addition, MCE seats get free beverage (alcohol included) and a snack. Without elite status, you would have to pay to select an MCE seat. MCE seats can range in cost from $27-$115, depending on the length of the flight. For our demonstration, we’ll put the cost at $65, which is what we’ve seen recently on our recent flights.
Looking forward, we will be able to select MCE seats on all 72 segments we’re expecting to fly over the next 21 months. This can present a value of $4,680 worth of seat selection fees.
2 Business class lounge access
Outside of having Concierge Key status on American Airlines, there’s only one way to get access to American Airlines’ lounges when flying domestically without paying. Access is granted if you have the equivalent of British Airways Silver elite status or higher on any Oneworld airline (not including American). Therefore, with our British Airways Silver elite status, any time we are flying domestically on an American Airlines, we will have access to the Admirals Clubs at the airport. Access to the Admirals Club cost either $50/day or $650 for a yearly membership. If you have every purchased a coffee or a sandwich at the airport, you can understand how expensive airport concessions can be. With lounge access, no more spending $8 on a latte, $18 on a sandwich, or $12 on a beer. Free food and drinks (please tip your bartender!) can be a significant savings. Since we will have status for at least the next 21 months, this benefit could be valued at $1,100.
3 Extra baggage allowance
The third valuable benefit from having British Airways Silver elite status is the extra baggage allowance. Without status American Airlines charges $30 for the first checked bag, and $40 for a second checked bag, in each direction, on domestic flights. Therefore, if we plan on checking a single bag on every flight we expect to take, we would incur the $30 fee 36 times over the next 21 months. This benefit presents a savings of $1,080 in baggage fees.
Recap
In conclusion, it is important to ask yourself what you value most when you travel. For us, seat selection, lounge access, and free baggage are important for us to travel comfortably. We understand this might not be at the top of everyone’s list. The underlying theme of this post is to show how we were able to secure access to comfortable travel for the next 21 months by strategically buying our airline tickets. The upfront cost of the initial round-trip business class flight was $600 more. This $600 investment not only got us more comfortable flights during our initial trip, it also gave us a significant return on investment, including:
8,000 American Express Membership Award points ($160)
22,400 British Airways Avios ($224)
Access to American Airlines Main Cabin Extra seats at time of booking for the next 21 months ($4,680 value)
American Airlines Admirals Club access for the next 21 months ($1,100 value)
Two free checked bags on all of our American Airlines flights for the next 21 months ($1,080 value)
For a grand total of $7,244 per person. That’s 12x multiple on the initial investment of $600.
