Posted on April 10, 2014
Posted on April 10, 2014
By the time a person has earned frequent flyer miles, they’ve already had to think about all the crazy details involved in earning. For instance, we’ve already talked about the importance of knowing which miles/points currencies you’re earning.
Well…there’s another thing to consider. Sorry, I know it’s overwhelming.
Aside from SouthWest’s unique way of pricing rewards based on the actual dollar amount of the ticket, most airlines base their award prices on zones crossed. Another pricing strategy does exist in major mileage programs though, that being distance based pricing. In this post I’d like to confront what the pro’s and cons are for each of these two, as well as examples of airlines that fit into each category.
Zone Based Mileage Programs
Explanation: Zone based mileage programs divide the world into zones, then determine how much each zone will cost to reach. There are a lot of similarities between how different mileage programs divide zones, but sometimes there are variations. For instance some mileage programs will define “North Asia” differently than others, or some mileage programs will divide Africa into two zones while others will consider it one. But you get the idea.
Take a look at the snippet of United’s award chart below. As you can see, the price in miles is determined by zone. (These are prices for one ways for the standard awards with partners.)
Examples: American Airlines, United, Air Canada, Alaska, Singapore, Delta, US Airways… pretty much most of the major mileage programs.
Pros: The benefit of this zone based pricing is that it tends to be a pretty good deal for a long-haul flight. For instance, you won’t have to pay more for your flight to Europe just because you’re leaving from LA instead of Boston.
Boston to Dublin is in the same price bracket as LA to Zakynthos, Greece even though there’s a huge difference in the actual distance of that flight.
Boston to Dublin: 60K United miles (roundtrip) in economy
LA to Zakynthos (Greece): 60K United miles (roundtrip) in economy
Cons: Of course… on the flip side you may be getting a significantly worse deal by booking a short-haul with miles in a zone based mileage program. This is especially true with domestic flights, as there are usually lots of other options for domestic flights. (Discount airliners, etc.)
Think of it this way.
A domestic flight from Chicago to Boston would cost 25K United miles roundtrip in economy. At 1,734 flown miles (for a roundtrip) vs. the 13,700 flown miles of the LA to Zakynthos flight (for a roundtrip), it’s almost an 8th of the distance, but only a little less than half the price.
Better to save those miles for half your trip to Greece.
Distance Based Mileage Programs
Explanation: Distance based mileage programs base their prices on actual miles flown. It’s not necessarily that they attach a value to each mile though, but rather there is a price assigned to a range of miles flown. For instance, take a look at British Airways’ award chart below.
As you can see, there is a price for 1-650 flown miles, 651-1,150, etc etc.
Examples: British Airways, ANA, JAL, Asia Miles
Pros: As you might guess by now, Distance based mileage programs are good for exactly the opposite of zone based. If we’re in a pinch and need a short-haul flight or domestic flight, British Airways Avios is often a good solution for this. (Unless of course there’s a great SouthWest deal.)
The Boston to Dublin example we used above is 2,993 flown miles ONEWAY. The reason we’re going to use the mileage flown for a oneway is because British Airways prices each segment separately. This ends up working to our advantage in this case. 2,993 flown miles fits into the 12,500 Avios price bracket. Multiply 12,500 Avios by two and we get 25,000 Avios.
But lets see what would have happened if we would have calculated our roundtrip mileage first, then looked at the price. 2,993 x 2 =5,986 flown miles. Now if we look at our chart we would be in the 30,000 miles bracket, not the 25,000 mile bracket. So, in this case we benefit from the price-per-segment policy.
See how that work? Boston to Dublin is one segment, and Dublin back to Boston is another segment.
So with the Boston to Dublin example we’re better off using 25,000 Avios roundtrip than 60,000 United miles roundtrip (if we can find a flight that helps us avoid fuel surcharges.)
Cons: Distance based mileage programs tend to get expensive with long-hauls obviously. Again, it’s the exact opposite from what we saw with zone based mileage programs.
Using the LA to Zakynthos example, a flight of 6,850 flown miles (oneway), we would be paying 35,000 Avios per segment for a total of 70,000 Avios roundtrip. In this example, we’d be better off using 60,000 United miles instead.
Conclusion: The basic takeaway point is that anyone doing a significant amount of traveling will likely find uses for both kinds of miles. Your zone based miles may help you get to your destination, but your distance based miles will help you hop around once you get there. Use United miles to fly from LA to Zakynthos, then hop around Europe for awhile with Avios. Basically the idea is to diversify.
There are miles we tend to value over others, but in general it’s good to have a bit of this and a bit of that. That’s one reason bank points are so useful. You can earn them knowing they can be transferred based on your needs.