A look into the very different options on SkyTeam partners to Europe

This is the big question travelers are often faced with when it comes to paying for a free mileage award ticket: cash or miles? It’s especially true given the fact that the mileage ticket isn’t really free, as you spend a good deal of money earning the miles, and that the ticket often comes with taxes.

The decision is made more complicated by the fact that not all alliance partner airlines charge the same number of miles for a given ticket. Even within the same region, award taxes can vary greatly

The Lowdown on SkyTeam

Three different award tax amounts, based on:

1. Knowing which airline mileage programs charge the same miles but less in taxes for the same route.
2. Knowing which countries within the same region are low- tax destinations
3. Knowing which airline mileage programs charge more miles but less cash, and which airline mileage programs charge more cash but fewer miles.

Save Money by Knowing Which Airline Programs Charge Less in Taxes

[aside headline="Putting it all together" alignment="alignright" width="half" headline_size="default"]

Have to use Delta miles: To Europe, travel to a low-tax city to save on award taxes.

Have credit card points to transfer: You have the option of spending fewer miles (but more cash) or less cash (but more miles). Not too complicated.[/aside]

The general rule is simple: European carriers impose heavy surcharges for mileage awards in their own programs. So if you want to fly a European carrier on an award ticket, book it through a U.S. carrier’s mileage program, which charges less.

See the chart below for the Miami-Paris example, a route flown by Air France and Delta. Both charge the same number of miles round-trip, 125,000, and both are Amex Rewards and Starwood transfer partners. But if you redeem your ticket using Delta miles, the taxes are only $150 versus $685 on Air France, a difference of 457%.

Same Flight and Miles But Lower Taxes

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Save Hundreds by Flying to Low-Tax Destinations

Award-ticket taxes can vary greatly by destination, even in the same region because some European countries impose miscellaneous fees on award travel (destination fees, passenger service charges, duty charges, and others), whereas some don’t. As the chart below shows, the fee on a Delta Business Class award ticket to London from Detroit is $323, whereas to Amsterdam, it is only $61. Nonetheless, the cost of U.S. airline award tickets can vary by up to 531% because of fuel surcharges.

Low-Cost Tax Destinations: Using Delta Miles on Delta Flights to Europe

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[aside headline="For FCF Subscribers Who Live Abroad" alignment="alignright" width="half" headline_size="default"]The article has global relevance because anyone has to pay award tax on free mileage tickets, and knowing when to pay more miles or more cash, or which country has lower award taxes is just as important to you as U.S. members.[/aside]

More Miles and Less Cash, Or More Cash and Fewer Miles?

Comparing Delta and Virgin Atlantic: New York-London.

More Miles & Less Cash: Delta uses a zone chart program, meaning it divides the world into zones, with every route between two different zones costing the same number of miles. NY-London costs the same as Los Angeles-London because both departure cities are in the same zone. Like other U.S. carriers, Delta imposes modest taxes on award tickets.

More Cash & Fewer Miles: Virgin Atlantic, a Delta partner, uses a flight-distance chart. As with most European airlines, Virgin’s taxes are not low.

More Miles and Less Cash or More Cash and Fewer Miles

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Both airlines are Amex Rewards and Starwood transfer partners, so the question is: Would you rather save 45,000 miles (36%) or save $904 (73%)?

In effect, you’d be paying the $904 for 45,000 miles, which, at two cents per mile, is not a bad way to keep/get miles.

So It Comes Down to Personal Preference

Do you value miles more than cash because you fly a lot in Business or First Class and have to acquire as many miles as you can? If so, using miles on Virgin Atlantic is the way to go, because you would save 45,000 miles, over half the cost of your next trip to London.

Or, do you value cash more than miles because you have tons of miles and/or points? If that’s the case, using Delta miles is the way to go.

Know thyself.