Most programs are getting worse, while other trends are making it harder to decide when to use miles. Here’s the lay of the land.
Back in May 2010, the last time I ranked domestic mileage upgrade programs, it was almost always a no-brainer to upgrade using miles much of the time, as domestic fares were high.
Almost three years later, the story has changed dramatically. Now using miles to upgrade is a brainer, a calculus. You have to think about the following:
- Is a low First Class fare the better deal?
- Do mileage upgrade costs make spending miles this way a wise move?
- Does the often small difference in cost between an upgrade and a free ticket make the latter the smarter move?
- Do increases in co-pays make paying cash a better option?
In this article I will outline the following:
- When to consider using miles for an upgrade on domestic flights
- Which mileage upgrade program offers the most value
- When to pay for domestic First Class (saving your miles for another day)
- The best ways to use Super Currency Points for a domestic upgrade
When to Use Miles for an Upgrade
1, Use mileage upgrades if the First Class ticket price is beyond your budget. Everyone’s threshold is different. But when a First Class fare is high (or just too much), using miles to upgrade can be a smart move. But if a First Class fare is in your budget ballpark, it’s also smart to pay to have better availability and earn miles.
Example of When to Use Miles if Your Budget is about $500: Washington, DC-Los Angeles
[table_opt style="gray-header" id="1669 " width="" alignment="center" responsive="all" heading="thcenter" rows="tdcenter"]
Example of When to Pay the Fare When Your Budget is about $500: Houston-New York
[table_opt style="gray-header" id="1670 " width="" alignment="center" responsive="all" heading="thcenter" rows="tdcenter"]
It’s easy to figure out whether cash or miles is a better deal by calculating the return on miles you get with an upgrade. While everyone values their miles differently, premium cabin travelers should be thinking about getting at least 2.5¢ per mile if not much more. Here’s the formula for figuring the value of your miles (using the Washington, DC-LAX fare above):
1st Step: First Class fare – Lowest upgradeable economy fare – Co-pay = Savings
$1,106 – $238 – $150 = $718 Savings
2nd Step: Savings ÷ Miles required = Value of a Mile $718 ÷ 30,000 miles = 2.4¢ per mile.
This is a close one. If the fare was out of my price range, I’d use the miles in a case like this
2. Use mileage upgrades if you don’t want to go for a free ticket. You may not have the miles or (more often the case) there are no free award tickets available for the flights you want. That’s because most airlines have different inventory buckets for upgrades and award seats, and the upgrade bucket is often deeper. (One exception: US Airways, which uses the same inventory for both.) Most people over-concentrate on looking for free tickets, when upgrades have much better availability. Look both ways before booking.
You may also be working on getting or keeping your elite status membership. Free award travel doesn’t earn elite credit. Fares upgraded with miles do.
If you don’t want to gamble on elite status upgrade roulette, which is increasingly a bad bet (especially for low- and mid-tier elites) generally speaking, free tickets won’t get you where you want to be, whereas mileage upgrades can.
[aside headline="When the Cost of an Upgrade is Nearly as Much as for a Free Ticket" alignment="alignright" width="half" headline_size="default"]Unless you need Elite Qualifying Miles (EQMs), go for the free ticket if available on United, as it only takes 10,000 more miles than an upgrade.[/aside]
Which U.S. Carrier Offers the Most Valuable Mileage Upgrades?
American and Delta, period. Neither have increased mileage co-pay requirements in years, whereas United and US Airways have. In effect, the Star Alliance carriers have devalued their loyalty programs. (See detailed upgrade mileage program ranking on page 4.)
[aside headline="Always Consider Mileage Upgrades for Major Non-Stop Transcons" alignment="alignright" width="half" headline_size="default"]
On Los Angeles/San Francisco to New York-JFK, Business Class starts at $3,900 these days, more than many international routes. So there’s only one question (for non-elite strivers): use miles to upgrade or go for a free ticket?
This is the only route on which I advocate buying miles if you don’t have a super currency. Of the three carriers (American, Delta, and United) that offer transcon service, Delta offers the best mileage upgrade deal, at only 25,000 miles r/t. Delta’s K fares (the lowest permitted) start at $416 r/t and the cost to buy the miles directly from the airline is $910, for a total of $1,326.
The published fare is $3,840, so this deal can net you a savings of $2,514 (66%). This is one aspect of my Buy Mileage Upgrades Strategy (BMUS), which you can use wherever you live. (More next month on how I use this strategy when I fly domestically to get in front of loyalty program loyalists—as a Loyalty Free Agent.)
[/aside]
Comparing Mileage Upgrade Programs
The trend is to downgrade programs by increasing mileage requirements and co-pays. United once had a top mileage upgrade program, but came out worst in this ranking. The co-pay increased 50% (from $100 to $150), and miles required for an upgrade increased by 10,000 in many cases. US Airways, which received my best ranking (B+) last time, has dropped because it now uses both a flight-distance and co-pay upgrade chart. This increases the cost of many long-range and multi-segment trips for travel in the U.S. and Canada because miles and co-pay amounts are based on actual miles flown on each segment.
Air Canada is not included because it only offers upgrades on full fares (Y and B via Star Alliance upgrades) and low economy fares for elites.
How I calculated the grades: The marks are based on three criteria: the general pricing of the lowest upgradeable fares, the level of access to the program through super currencies and miles-purchase programs, and the number of miles needed to upgrade.
Alaska: C- No change over the last two years. The airline still requires 30,000 miles for a r/t upgrade, but that’s only available with mid-range economy fares (Y, S, B, M, or H). A downside is the limited domestic route network (mostly West Coast and Mexico), but the upside is the 12 partners with extensive international routes (not rated here). Its super currency partner is Starwood. Often it offers good discounts on purchasing miles (see page 1 for more) and there’s no annual mileage-purchase limit. The former is a big plus for new members.
American: B No major changes over the last three years. It allows upgrades with any fare for only 30,000 miles r/t and a $150 surcharge. Great savings possible on routes with no EasyUp fares, such as Chicago-San Francisco, Los Angeles-JFK, and Miami-New York, as the chart on the next page shows. A C+ in our last ranking, American moved up because others have dropped.
But what makes American’s program especially worth having is upgrade availability. Most airlines have three separate First and Business Class “seat inventory groups”: Free seats, upgrade seats, and paid seats (most of the inventory, of course). However, for domestic travel, American puts discounted First Class and upgrade seats in the same bucket (fare code A for two cabin aircraft). That means if a discounted First Class seat is available, an upgrade is, too. So availability is often pretty good.
The airline has a super currency partner, Starwood. You can also buy the 30,000 miles needed for an upgrade (yearly limit is 60,000 miles), which on some routes is an amazing deal—up to 87% off published First Class fares.
Sample Availability of Mileage Upgrades vs. Free Award Tickets on AA in Business Class: San Francisco-JFK (Non-Stop Three Cabin Service)
[table_opt style="gray-header" id="1671 " width="" alignment="center" responsive="all" heading="thcenter" rows="tdcenter"]
[aside headline="Super Airline Currencies (SACs)" alignment="alignright" width="half" headline_size="default"]
This refers to programs with a lot of transfer options, meaning the currency can be converted to many other currencies. That allows you to choose the best option for the trip you’re booking. Currencies that can be used with airlines that offer one-way awards are even better, as you get an extra level of flexibility (see FCF March page 2).
There are four primary SACs for premium travelers: Amex Membership Rewards points, Chase Ultimate Rewards points, Diners Club Rewards points, and Starwood Starpoints. See FCF’s August 2012 issue, page 2, for more on “Super Airline Currency Transfer Time” and related issues.
[/aside]
Delta: B- No change over the last two years. Allows upgrades on most domestic economy fares (except L, U, and T), and charges 25,000 miles r/t, 5,000 fewer miles than most other airlines. A good mileage upgrade program if the route offers a low K fare (see chart below). It would have received a much better grade if upgradeable fares were more consistent and lower on more routes. Super currency point transfer partners are Amex Rewards and Starwood. Annual mileage-purchase limit is 60,000 miles; you can purchase another 500,000 annually through Amex Rewards.
Mileage Upgrade Program Comparison for Lowest Upgradeable Economy Fares
[table_opt id="1672" style="gray-header" width="wide" alignment="center" heading="thcenter" rows="tdcenter" responsive="all"]
United: D+
Allows upgrades from any fare for 30,000 to 40,000 miles r/t and $150. The lower the economy fare, the more miles are required to upgrade. Good savings possible when no EasyUp fares are available. The major drawback is that it wants 40,000 miles for the lowest fare upgrade (and 30,000 for higher priced economy fares). 40,000 miles is only 10,000 miles less than the cost of a free ticket (United charges 50,000 miles r/t for a free two cabin First Class), so why even go for the upgrade if both are available and you are not striving for elite status? (The upgradeable economy fare will usually range from $400 to $600, but the 10,000 miles extra for the free ticket only costs $376 to replace.) A bright spot: United elites are exempt from the surcharge and can upgrade on any fare, but that didn’t figure into the grading here today.
This program has Chase Ultimate Rewards as a super currency partner. You can buy the 40,000 miles needed for an upgrade from United directly (yearly limit is 100,000 miles).
US Airways: C-
Here you have to do your homework because the miles required to upgrade and co-pays are based on miles flown per flight segment and the amounts required can vary greatly. So for connecting flights you have to add up the miles and co-pays for each flight segment. For short non-stop flights, such as Phoenix-Dallas (872 flight miles each way), the upgrade costs 12,000 miles and $100 r/t. (Whereas American charges 30,000 miles and $150 r/t.) But let’s say you are flying across the country with a connection, for example San Diego-Providence (connection in Charlotte or Philadelphia), the upgrade cost rises to 30,000 miles and $350 round-trip, $200 more than American would charge.
Big plus is no limit on buying miles (but transaction limit of 50,000 miles). US Airways also frequently offers discounts ranging from 25% to 100%. It has a super currency partner in Starwood. Bottom line: very good for short, non-stop flights (where upgrades are less important).