Fly Economy or First Class?

The question has been asked frequently about whether it is more worth it to redeem your hard earned miles for economy or first class. Some people would argue that they rather have more trips, so economy. Others want to be able to redeem for a First Class or Business Class treatment that they would otherwise not pay for normally.

I enjoyed reading a post by fellow Canadian BoardingArea blogger Avery from DCTA entitled Top Three Tips for Points and Miles, especially the tip You’re Probably Better Off Flying in a Premium Cabin. I completely agree that you can get more value when redeeming your miles for first class travel would get you more value than economy travel. Avery does a great job explaining the math. Basically it comes down to, the cost of paying for First Class can be 4 or 5 times more expensive than paying for an Economy fare. However, it may only cost twice as many miles to redeem for a First Class fare than an Economy ticket. That’s the main reason why it is more worthwhile to redeem for a First Class flight if you value this option.

I would like to supplement what he wrote by adding the factor of travel habits.

Depends on How you Earn your Miles

I must admit, I hardly ever earn miles through every day spending. It represents less than 10% of my overall earnings in a year. Most of my miles earned are from sign up bonuses, referral bonuses, surveys and presenting my loyalty card at a sponsor (like Aeroplan at Esso gas stations or Home Hardware). Personally, I do not depending on annual spending to rack up the miles.

Even if I spent $30,000 per year, even if I averaged 1.5 mile per dollar spent, it would come out to 45,000 miles. I have been putting my spending on credit cards that require me to meet a minimum spending threshold instead, to fully qualify for a sign up bonus. Otherwise, my go-to-card has been the Capital One World Elite Aspire Travel MasterCard. I much prefer diversify my portfolio to have some fixed reward options.

Depends on How you Spend your Miles

Let’s say at some point, I will earn 125,000 Aeroplan miles. With that many miles, I have several options:

• 1 First Class round-trip to Asia 1 destinations (China, Eastern Russia, Hong Kong, Japan, Macau, Mongolia, North Korea, South Korea, Taiwan)
• 2 Economy Class round-trips to Europe 1 destinations (Austria, Belgium, Denmark, France, Germany, Ireland, Italy, Luxembourg, Netherlands, Norway, Portugal, Spain (incl. Balearic Islands; excl. Canary Islands), Sweden, Switzerland, United Kingdom)
• 5 Economy Class round-trips to anywhere in Canada & Continental United States (Canada’s 10 provinces & 3 territories; The 48 contiguous US states, plus the District of Columbia and Alaska)

See Aeroplan Award Chart.

Dollar for dollar value, I would probably get more bang for my buck redeem for a First Class ticket. However, I may have a slew of upcoming trips that I rather not pay cash with.

What I do

The question is always, what is the best use of my miles? Redeem for Economy, Premium Economy, Business or First Class travel? The answer for me has always been, save up and be ready for anything!

I redeem my miles based on my travel habits. Furthermore, I really do not like paying full fare. So if I know that I have a slew of upcoming trips, I will be more prone to redeeming for Economy travel, so that I can spread my miles out. If I do not have too many upcoming trips, I would be more willing to spend on Business or First Class travel. It all depends on how many miles I readily have.

I use my fixed rewards to pay for my taxes and fuel surcharges, effectively bringing my costs down to zero, all paid with rewards.

Conclusion

At the end of the day, I must admit that a lot of tedious work is put in to calculate how to get the best return. You just have to do what works best for you. Keep in mind that the more work you put in to calculate optimal options, the more you will be rewarded (pun intended).