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Making the most of air miles

Free flights and free upgrades are there for the taking, according to the big-hitting airlines and their frequent flyer schemes. But are these so-called loyalty programs a no-brainer for travellers, or something of a swindle?

Making the most of air miles
Frequent flyer points. Image: Getty

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The easiest way to spot frequent flyer point geeks in the wild is by their distinctive call: “Is it OK to pay by American Express?”

The exaggerated eye-rolling of their long-suffering partner, who has probably spent years churning credit cards and shopping online to feed the hobby, is offset with the bargain upgrade on flights later in the year.

Despite my attempts not to fall down the ever-expanding ‘frequent flyer geek’ rabbit hole, I fear I’ve probably become this person. I sign up to credit cards based on how big a points bonus they offer, have learned the nerdy back routes for getting points while buying wine or T-shirts, and harangue my wife to book time off every time Virgin Atlantic launches a rewards sale with discounted point redemptions.

On the one hand, this is dismally pathetic behaviour. On the other, our flights to the US last year cost hardly anything, and we can probably go business class to Thailand on the cheap in 2015. My point-hoarding endeavours are more extreme than most people’s, but compared to the most rigorous zealots, they barely scratch the surface.

Frequent flyer schemes are theoretically about airlines rewarding customers for loyalty. More realistically, they’re about trying to keep customers away from the competition with the tantalising prospect of a ‘free’ flight some time in the future. These schemes were launched in 1979, when Texas International Airlines began giving passengers rewards based on the number of miles flown. Other airlines quickly followed suit, and nowadays most full-service airlines (and some budget carriers) have their own schemes.

In the UK, the British Airways Executive Club and Virgin Atlantic Flying Club are the most commonly used,  although the likes of Flybe, Emirates, KLM and Etihad have their own schemes, too — and may be of more use if you’re travelling regularly to certain destinations or from regional airports.

At the basic level, as long as you give your frequent flyer number when booking, you receive points for each flight you take. For example, a return flight to Los Angeles from Heathrow in economy class with British Airways would earn a passenger 10,884 Avios (the shared points ‘currency’ used by BA and Iberia).

Once enough points are collected, they can be redeemed as payment for flights. To use the BA example again, 50,000 points could be redeemed in return for a ‘free’ return flight from London to LA. But the catch is that taxes, airport charges and highly dubious fees, such as ‘fuel surcharge’, are not included, so you’d have to pay £381 on top of the 50,000 points. Given that BA’s flights to LA rarely cost more than £600 and were on sale for £474 recently, that’s hardly the most efficient use of the points.

In contrast, an economy class return to Santorini would cost 20,000 Avios plus £35, while a business class return to Mexico City would cost 100,000 Avios, plus £603. That flight would normally cost from £2,576.

Steve Nowottny, consumer and features editor at personal finance site Moneysavingexpert.com, says: “The key with frequent flyer schemes, as with any loyalty incentive, is to both collect points in the right way and ensure you get maximum value when spending them. When picking the right redemption, always check what it would actually cost to book in cash first to see if it’s a good value exchange.

“With Avios, for example, short-haul flights, business class tickets and flight upgrades tend to represent good value. But it’s much less so with long-haul economy flights, because you’ll still have to pay taxes and charges, which can add up to the price of a flight on a cheap airline anyway.”

Learn and earn

It’s once you start studying how to get the most value from your points that a seemingly infinite world of complexity opens up. For a start, flying is just one of many, many ways to earn points. They can be racked up fairly quickly on the weekly shop, and Tesco Clubcard points can be converted to both Avios (250 Clubcard points equals 600 Avios) and Virgin Atlantic Flying Club Miles (625 miles for 250 Clubcard points).

Points can be collected by shopping at hundreds of stores, whether Debenhams (four Avios for every pound spent via the BA site) or Lonely Planet (12 points for every pound spent on guide books via the Virgin Atlantic site).Going in through the airline’s frequent flyer scheme site can also unveil similar deals for booking car hire, hotels and foreign currency exchange — although the best deals are often hidden in online shopping sections. Go via the Virgin Atlantic site to Hotels.com and you can get six miles per pound spent or 700 miles per booking at Booking.com.

Other collection strategies are discussed in length on various websites and forums populated by people intent on playing the system to maximise their points. Flyertalk.com, Frequentflier.com, Boardingarea.com and Thepointsguy.com are largely aimed at the US market, where air travel is a more regular part of life and working the frequent flyer schemes is a far bigger hobby. Many travellers will routinely board flights just to retain certain status levels within the scheme.

For British travellers, Headforpoints.com is the most comprehensive site. It’s run by Robert Burgess, who says: “I cannot understate the impact frequent flyer miles have had on my life. I’ve done some amazing trips over the years, burning millions of miles. My children have never flown long-haul economy, and before I had a family, I used to take three friends down to Cape Town first class for the weekend.”

Virgin Atlantic bed. Image: Virgin Atlantic

Virgin Atlantic bed. Image: Virgin Atlantic

Burgess gets most of his points through use of credit cards, some of which reward points for every pound spent on them. Various airlines — including BA, Virgin Atlantic, Emirates, Lufthansa and Etihad — have branded cards enabling frequent flyer points to be collected in this way. Some (such as the Virgin Atlantic Black Card) have annual fees as a trade-off for higher rates of accumulation. There are also American Express-issued cards and hotel chain-branded cards that allow points to be converted to the airline schemes.

Accumulating points in this way is effective if as much spending as possible is put on the card. But, only rarely is it worth buying something  you wouldn’t otherwise buy just to get the points. Also crucial is being certain you can pay off the card each month — or anything gained in points will be more than lost in interest payments. If you don’t pay your credit cards off in full every month, don’t even consider this route — rewards cards usually have punitive APRs.

However, Burgess says collecting points as you spend is only part of the strategy he uses. Many cards offer large sign-up bonuses as incentives, and systemically signing up for — then ditching — these cards can pay hefty dividends.

“The free (in year one) American Express Gold card is a good example,” says Burgess. “It has a 20,000 point sign-up bonus. That’s 20,000 Avios or 20,000 Virgin miles just for signing up. Get one for yourself and one for your partner — and possibly your parents as well.”

When the sign-up bonus is triggered, the card can be cancelled, and as long as there’s a six-month gap between cancelling and applying again, it’s possible to get another 20,000 bonus on reapplication.

“And if you’re serious about it, don’t jump on every card,” says Burgess. “Wait for the right one or two to come along and then hit them hard. For example, two years ago, Lloyds Bank offered 25 Avios per £1 spent in foreign currency on its credit cards for a short period — that’s 10 times the normal rate.”

Doing this takes a fair degree of fiddly organisation, not to mention keeping track of the best offers. It goes way beyond the ‘may as well have the points if they’re available’ attitude most frequent flyers have.

Spending points

Unsurprisingly, Burgess has also delved fairly deeply into the best ways to cash in the points. He suggests redeeming points with partner airlines as a way of massively increasing the value. BA points can be used, for example, to book Qantas, Cathay Pacific, Iberia and American Airlines flights. Virgin’s partner airlines include Delta, Singapore Airlines and Air New Zealand.

Most of these have lower fuel surcharges — making the cash top up for points redemptions lower. They’re even better value if you don’t fly from the UK (thus dodging Air Passenger Duty). A domestic flight in the US, a hop across Southeast Asia or booking London to Madrid then Madrid to South America separately can end up a far better use of your points.

“Few people know that Air Berlin (which flies to a lot of long-haul destinations) and Aer Lingus (which flies to the US and Canada) charge minimal taxes — around £500 per person less than BA for a business class return,” says Burgess. “I flew one-way from New York to Berlin in business class on Air Berlin for £2 tax in 2013.”

Upgrades can often be cost efficient, too. For the overnight flight back from Vancouver last year, spending 12,500 Virgin miles and £58.40 to upgrade from economy to premium economy seemed like a no-brainer. If you only upgrade one leg of a flight, make it the return leg for generally lower taxes. There are other perks to consider, too, such as lounge access and higher points-earning rates for higher tiers of membership. These are generally only available to travellers who fly a lot on the same airline.

The big flaw in obsessively collecting frequent flyer points, however, is that they really are best suited to frequent flyers. Those who have to travel to a certain destination on set dates can end up thwarted by the lack of availability, as airlines generally release reward seats only when they’d otherwise go empty. Busy route during peak season? Leaving on a Friday? You’ve virtually no chance. But for those who have flexibility with dates and destinations, or rattle up points anyway through work trips, a little obsessiveness can take you a long way. Literally. As a friend who has flown to Sydney and back on points twice in a year can testify.

So if that means being groaned at every time I ask whether I can pay by Amex, so be it.

Which is better?

British Airways Avios vs Virgin Atlantic Flying Club Miles

Economy class redemptions (short-haul): BA. Virgin has no short-haul flights.
Economy class redemptions (long-haul): Virgin. Sample: 42,500 points plus £247.86 to San Francisco, versus 50,000 points plus £381.96 with BA.
Business class redemptions: Same. Sample: 120,000 points plus £574.96 to Hong Kong, versus 120,000 points plus £570 with BA.
Using points for upgrades: Virgin.
Number of routes flown: BA.
Reward seat availability: BA.
Partner airlines: BA.
Online shopping sites: Virgin, to access the hotel booking sites.

Published in the Jul/Aug 2015 issue of National Geographic Traveller (UK)