The Upgrade Mindset Applied: Comparing Free Ticket Awards vs. Upgrade Awards on American to Asia

August 2013
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Exploding common, pop-culture myths that keep premium travelers from money-saving, comfort-and-convenience opportunities, or both

Intended Audience:

  • Frequent and non-frequent travelers (if you fly a lot or a little, it doesn’t matter)
  • American Elites and non-American travelers (whether you want to earn elite status credit or have never heard of elite status credit, it doesn’t matter)
  • American Mileage Bank Owners and non-owners (you need not have a single American mile to use these methods)
  • Premium Travelers (either Business or First Class)
  • Busy People (who have to maximize their time and people who aren’t as pressed for time can reap the benefits)
  • Upgrade Experts and novice upgraders (whether you’ve been an FCF member for 16 years or joined yesterday, it doesn’t matter)
  • U.S. and Asia-originating travelers (the program works nearly the same in reverse)

It’s hard to free ourselves of Travel-World Dogma (TWD), the accumulation of assumptions, ideas, and beliefs that pile up in our minds like stuff in an attic. They congeal into ‘frameworks’ that end up affecting your approach to air travel.

[aside headline="Miles Value" alignment="alignright" width="half" headline_size="default"]

If you don’t think your miles have significant value, the algorithm changes. Run the numbers to see how that alters the equation for you. Valuing your miles at much less than their replacement cost presupposes that you are traveling because you have the miles—as opposed to using miles because you travel.

You can spend endless amounts of time earning every 500- and 1,000-mile bonus; it gets tricky and even more time-consuming to figure out the value of your time. This piece is for people who place a high value on their time in general.[/aside]

FCF’s goal with this series of articles on The Upgrade Mindset (the first one was in the July issue on United to Europe) is to expose and undo these frameworks. In this issue we’re going to examine, using hard data, the question, “Are American AAdvantage miles better used for free tickets or upgrades when flying to Asia?”

Of course, we can’t possibly cover every imaginable travel scenario, but we can put more ammo in your upgrade arsenal, which we all can’t get enough of given the ever-changing, premium-travel landscape.

So here are the most common misconceptions people have when using American miles on AA flights to Asia…

False Impression #1: Free Business Class Awards vs. Upgrade Awards

The Myth: The best way to use miles is for a free award ticket.

The Truth: Very often wrong! When it comes to upgrading with miles to Asia, most people see the co-pay ($700) and run for the Free Ticket Hills. In many cases, this is simply not a good move.

Side-by-Side: Upgrades vs. Free Tickets: As you can see from the chart on the next page, an upgrade to Business Class often costs less than a free Business Class award ticket, once you put a dollar value on your miles.

Sample Cost Comparison of Upgrades vs. Free Mileage Awards on Chicago-Beijing Business Class

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While last month the data on United to Europe demonstrated that Business Class awards and upgrades had very different levels of “availability”, which is generally the case, there are only slight differences in availability on AA when comparing the two types of Business Class awards to Asia.

False Impression #2: Availability of First Class Free Awards vs. First Class Upgrade Awards

The Myth: The odds of getting a free award ticket are the same or better than an upgrade award on AA.

The truth: Usually wrong! On most routes American releases many more mileage upgrades than it does free mileage awards for First Class.

As you can see from the sample route in the chart top right, using miles for an upgrade based on two travelers gives you up to 3,100% more days and, in general, triple the options.

What’s the biggest complaint about mileage awards? Availability. What’s the obvious Availability-Increaser at relatively the same cost? In two words: Upgrade Awards.

Number of Days with Availability for First Class Upgrades vs. Free Awards on American Based on Two Travelers: Los Angeles-Tokyo

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False Impression #3: Business Class Award Availability vs. First Class Awards

The Myth: The chances of getting a free Business Class award ticket are much better than a free First Class award on American.

The Truth: On American, this is usually wrong for travel to Asia. On most routes, the airline releases more free First Class awards than it does free Business Class award tickets. (Yes, it is counterintuitive since a First Class cabin is much smaller than Business Class.) As you can see from the sample route (Chicago-Shanghai) in the chart below, using miles for a free First Class award gives you up to 1,300% more flight options.

Number of Days withAvailability for First Class vs. Business Class Awards on American: Chicago-Shanghai for One Traveler

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False Impression #4: Only Frequent Flyers Can Play Mileage Games

The Myth: You need to have an American Airline mileage account (today) and many miles in it if you want to take advantage of the opportunity.

The Truth: Wrong! You do NOT need to be an AAdvantage member—or even know anything about the program or anything about mileage program strategies—to save on Business and First Class travel to Asia, if you follow the guidelines here.

You can get American miles fast and easy by transferring points from Starwood Preferred Guest, or by buying up to 60,000 miles annually from American directly here in mere minutes.

Need more than 60,000 miles?
Open up multiple American accounts (less than five minutes each), in the names of your friends, family, or hairdresser, because you can use the miles in these other accounts for your flights. (This is yet another great misconception, and countless miss out on the multitude of opportunities that arise from being aware of how to “manufacture miles” … lightning fast.)

False Impression #5: Co-pays are Mandatory for AA Flights

The Myth: AA’s co-pay (cash surcharge) makes upgrading on American flights to Asia too expensive.”

The Truth: Wrong! You do not need to use AA miles and pay a co-pay for an upgrade on the lowest economy fare. Through AA’s partner program, Cathay Pacific’s Asia Miles, American flights can be upgraded on most any economy fare—and Asia Miles does not charge a co-pay.

So what is the trade-off? It takes more miles.

American charges 50,000 miles round-trip to Asia (plus a $700 co-pay) for an upgrade from economy to Business Class, while Asia Miles charges 70,000. So if you have a lot of Starwood points, use Asia Miles and avoid the $700 co-pay on AA.

For upgrades from Business to First Class AA also charges 50,000 miles r/t and an $1,100 co-pay, while Asia Miles charges 85,000 miles. But if you figure in the Starwood transfer bonus, the difference is only 30,000, and you save $1,100. Your call.

The Upgrade Mindset Lesson

Who would have thought that the highly coveted First Class free award is easier to get than a Business Class one? Ah, the misconceptions of Pop-Think (PT).

The Real Lesson: Try everything. A primary tenant of The Upgrade Mindset is to have as few preconceptions as possible! Moreover, what was true yesterday may not be today. What your friend told you may not apply to your personal situation. What many pop-media outlets advocate is too often hearsay or skewed for other reasons.

One thing is for sure when traveling on AA to Asia: It’s well worth paying the 25,000 more miles for First Class, as I’ve always maintained that the difference between Business and First Class is similar to the difference between coach and Business. Plus, as you can see from the sample route in the chart, First Class availability can be much better. (i.e., You can have a much easier time getting preferred dates and schedules, etc.)

Consider Using Mileage Upgrades If You Are:

  • An Elite Status Seeker: Someone who needs to earn elite credit. If you are an American elite, Upgrade Awards are really the only way to go.
  • A Business Traveler: When company or clients are paying for the base fare in economy (B fare or higher), use AA miles for a full-fare upgrade to avoid the co-pay.
  • Short on Miles: Costing roughly half the miles, upgrades stretch your mileage bank. If you can’t get enough miles for a free award ticket, upgrades can go a long way to solve that problem and keep you in the mileage game longer.
  • Convenience Oriented: With up to 3,100% more inventory available, mileage upgrades can offer more access to non-stops and to more convenient schedules. While American Partner Awards theoretically open up space with more airlines—and they do open up the options for free-ticket seekers—the space is still nonetheless much more tightly controlled. Yet Partner Awards have their place, especially for non-elites and for free First Class seats on partners like Cathay Pacific, when fares are otherwise very high, and for those who are more flexible, especially for those who can fly on a moment’s notice (see FCF’s February issue for more on the Upgrade Two Step).

Don’t Use Miles to Upgrade When:

Premium published fares are very low and you are booking well in advance (50+ days out). An example of this is the current First Class EasyUp fare on American’s Los Angeles-Tokyo route, which starts at $3,572 round-trip including taxes. (With the miles you’ll earn, the net cost could actually be $3,064.) But the Business Class fare is the same, so pay cash for First and use your miles another day. (In this case, neither an upgrade nor an award ticket yields a good return on miles for First Class.) Business Class EasyUp fares are intermittently available in the $2,500-range and advisable to snag when they come up.

[["","Upgrade Award","Free Award"],["Cost of Ticket (including taxes)","$970 (coach fare)","$35 (in taxes)"],["Upgrade Surcharge","$700","$0"],["Total Cash Outlay","<strong>$1,670<\/strong>","$35"],["Miles Needed","50,000","110,000"],["Cost to Replace Miles, including taxes and buying all the miles needed from AA (60,000-mile annual limit)","$1,513","$3,322"],["Gross Cost of Business Class","$3,183","$3,357"],["Miles Earned on Trip (not including the value of elite-status credit)","13,142","0"],["Value of Miles Earned (which offset the total cost)","$419","0"],["Net Cost of Mileage Ticket","<strong>$2,764<\/strong>","<strong>$3,357<\/strong>"],["<strong>Difference<\/strong>","<span style=\"color: #ff0000;\"><strong>$593<\/strong><\/span>","#colspan#"]]
<small><em>* Travel shoulder season (which is often any time except during the summer months and the three weeks during the holidays). ** Free Business Class tickets can be had for 100,000 to 135,000 miles to Asia, and many upgradable coach fares can be lower as well. This is just one example; other scenarios will vary. *** Use the formula above to figure out if your personal situation is much different.</em></small>
[["Month of Travel","Upgrade Awards","Free Awards","Difference"],["September","<strong>30<\/strong>","6","500%"],["October","<strong>31<\/strong>","1","3,100%"],["November","<strong>30<\/strong>","17","176%"],["December","<strong>31<\/strong>","12","258%"],["January","<strong>31<\/strong>","16","193%"]]
[["Month of Travel","First Class","Business Class","Difference"],["September","<strong>11<\/strong>","1","1,100%"],["October","<strong>13<\/strong>","1","1,300%"],["November","<strong>25<\/strong>","10","250%"],["December","<strong>24<\/strong>","9","267%"],["January","<strong>28<\/strong>","12","233%"]]