I almost never pay more than five dollars for a domestic flight because I almost always use airline points and miles to fly. There are only a few occasions I’ll pay for a domestic flight, but only if it yields lots of miles for low cost. On domestic flights, the taxes on an award ticket roundtrip are five dollars (international taxes vary). People always argue that using points and miles on a domestic flight is a waste because redeeming for international tickets yield more value. The answer is it depends on what kind of airline miles and points you use to redeem. There are three different kinds of award redemption types that I will talk about: fixed-based, revenue-based, and distance-based.
Fixed-based redemption – This type of award redemption uses a fixed amount of miles to fly anywhere in the United States. The following are the airlines that used fixed-based redemption. I have listed below the amount of miles needed per domestic roundtrip.
- American Airlines – 25,000 miles
- Delta – 25,000 miles
- United – 25,000 miles
Analysis: This type of redemption is what most people talk about when they say it is a waste of mileage. I partially agree because you could fly to Europe for only 40,000 miles off-peak (Oct 15 – May 15) or Northeast Asia for 50,000 miles off-peak in economy. Redeeming for economy vs. business international is based on your preference and how many miles you have. You might be tempted to use these miles from LA to New York, but sometimes this route can cost only about $300. Therefore, if you redeem 25,000 miles your value per mile is only little over 1 cent. Buying a ticket, which will yield you miles might be a better choice in this situation.
Also note that fixed-based award tickets have limited availibility. Each airline will release a certain amount of award tickets per date and may release a few more closer to day of departure. Therefore, holiday availibilty may be scarce. Bottom-line: Miles from these airlines, I would save for international redemption.
Revenue-based redemption – This type of award redemption is based on the amount you would spend on an airline ticket. For example, if it costs $153.60 to fly roundtrip between LAX-SFO, then a revenue-based redemption would convert the $153.60 amount to 7,920 points.
How to use Southwest Points: Do a simple search for airfare on Southwest.com. I picked Dec 13-Dec 15. Click the points button. I’m assuming people have Southwest points, but if not sign up for the Chase Southwest Visa Card or Chase Sapphire Preferred Card, explained at the bottom of the post.
Analysis: This type of redemption gives great value for your points. In this example, each point is being converted to 1.93 cents per point. Southwest points are my go-to airlines for short domestic flights. This is because the airfare is already cheap, and using points would discount the price by about 50%. It usually only costs 3,000 to 4,000 points to fly one-way around California. That is incredibly cheap because I have been applying for credit cards that give 40,000 to 50,000 in points. By using Southwest points, you will never pay more than five dollars for a domestic flight (September 11 taxes), though I heard the tax is going up to ten dollars for a roundtrip. If you fly domestically a lot I would recommend the Chase Southwest card, which right now gives a 50,000 point bonus after spending $2,000. However, a better option would be the Chase Sapphire Preferred card (40,000 bonus after 3k spend) because of its flexibility to transfer to Southwest points, United miles, and Avios miles. Avios miles are the 3rd type of redemption, which are distance-based redemption tickets. I will explain why the Chase Sapphire Preferred card is better than the Chase Southwest card in a subsequent post.
Distance-based redemption – To be continued…