Hello from the SFO Polaris lounge! I’m flying to Japan in ANA First Class tonight thanks to wide-open award space that happened earlier this year. At SFO, the lounges all close by 10 pm (Centurion at 9 pm, KLM at 7:45 pm), but the flight is at 1:45 am, so ANA issues $30 meal vouchers per passenger in the form of a Mastercard Gift Card. Terms state the merchant must be categorized as “food, dining, or restaurant.” It’s the same GC that United, Alaska, and Delta issue (though I hear they are sometimes Discover cards), with the same zip code of 60173. You receive a QR code and the card number, expiration date, CVV, and billing zip code. From some internet sleuthing, I found the entire billing address: 1475 E Woodfield Rd, Schaumburg, IL 60173.
Tag: Alaska
My Experience Booking a Delta Skybonus Award
One thing that remained relatively unchanged last year was Delta’s Skybonus program. Skybonus is a rewards program for businesses as an incentive for them booking flights for their employees. Like AA’s equivalent, Business Extra (United’s is explicitly limited to corporations/large companies), rewards are earned as multipliers on ticket price, with higher multiples for higher fare classes.
At the end of 2015, Delta changed the program to have an annual spending requirement and to require a minimum number of distinct employees to take a flight, in order to make it a less viable double-dip option for sole proprietors. However, through some fare sales, targeted promotions, and help from family members, I was able to not only meet the requirements, but earn enough points (85,000) to redeem for a domestic round-trip. No one I know had ever earned enough points or redeemed a Skybonus certificate, so I was eager to try it out.
Within a few minutes, I received an email with my certificate number and a prompt to call Delta to redeem for a flight.
However, having redeemed gift cards for Delta flights, I knew there was a way to redeem online, so I clicked through to the redemption instructions and followed the links to Delta’s website.
After entering the certificate details, the full certificate details appeared:
Thankfully, and unlike the upgrade certificates for which you can redeem (for which it’s often difficult to determine if there’s availability), my certificate’s terms were simple: as long as there was availability in T class (which is not the lowest fare class), I could book a flight.
On I went to search for a redemption (I had pre-confirmed T class availability before redeeming for the flight):
There were plenty of options. I picked the most direct, which led me to the fare details page and eventually the checkout page.
Interestingly, the price breakdown and receipt showed not an award redemption, but a purchase of a flight with a base fare of $0 and the $11.20 ($5.60 TSA fee each way) in taxes and fees. What I suspect, therefore, is that I will earn Medallion Qualifying Miles on the flight, although obviously I won’t earn any redeemable miles. Ideally, I would have attempted to credit it to Alaska, but since their partnership with Delta is ending before I take my flight, I won’t get to see if I can earn redeemable miles based on fare class (for the sake of science, I might put in my Air France Flying Blue number, but the miles wouldn’t be too useful for me).
Another interesting note is that, despite the flight being after the end of the Delta/Alaska partnership, the website did allow me to enter my Alaska Mileageplan number and select “Preferred” seats as per the current reciprocal status benefits. Who knows if they’ll stick, but worth a shot.
All in all, this was a successful double dip. I think it’s unlikely I requalify for Skybonus this year, so it will probably be my last, but I’ll take it!
Happy hacking!
2016 Status Roundup: What I’ve Earned, and What I’ve Learned
Elite Status Roundup: What I’ve earned, and what I’ve learned
Which of my predictions reached fruition?
In Defense of Delta
With that out of the way, onto the main event…
I f***ing love Delta Skymiles
Okay, maybe that’s a bit of an overstatement, but it isn’t that far off.
Being good at anything, be it a job or a hobby, is all about having a set of tools that you know inside and out. As a software engineer, it matters less how many programming languages I know so much as having a set that covers a sufficiently diverse functionality and knowing that set very well.
Travel hacking — and for the purposes of discussion, I’m going to limit the scope of discussion to redeeming airline miles — is no different. As great as it is to know the ins and outs of 20 different programs, fragmentation (i.e. maintaining balances across all those programs) is expensive both mentally (you have to remember what program is good for what redemptions) and financially (since you’re likely to have orphan balances). That is to say, having a few programs that you accrue balances in and making active choices to invest in those programs is far more beneficial for the average person than a shotgun approach.
I’ll use myself as an example. Although I have access to pretty much every frequent flyer program on the planet (through transferrable currencies like Chase Ultimate Rewards, American Express Membership Rewards, and Starwood Preferred Guest), and although I know some international programs have some really nice redemption opportunities, I generally stick to the following six: Alaska, United, Air Canada, Virgin America, Southwest, and you guessed it, Delta.
Admittedly, six is still a lot, but the choice of those six were very intentional:
- Alaska has great slate of partners (most of OneWorld) and very flexible routing rules.
- United doesn’t charge fuel surcharges and is a member of the Star Alliance.
- Air Canada offers cheaper business class redemptions on Star Alliance partners relative to United.
- Virgin America flies SFO-JFK and is a fixed-value currency.
- Southwest is price-competitive on random short flights, also has a fixed-value rewards program, and all awards are fully refundable.
- Delta Skymiles are a fixed(ish) value currency.
This is nominally a post about Delta, so let’s talk about it. Why are Delta Skymiles in my Swiss-army knife of airline miles, and why do I like them so much?
For starters, they transfer from Membership Rewards, so I have very easy access to them. But more importantly, you can pretty much always book an award flight on any route Delta flies. This is made possible by the fact that they have five different levels of award pricing for each route, and although it’s primarily a ploy to reduce the value of your miles (to closer to 1 cent a piece on Economy class redemptions), I actually appreciate the opportunity to be given a choice whether to use miles or points irrespective of the cash price. I can always decide that the “value” is too low, but that’s a decision for me, not for the airline.
To be clear, it annoys me to no end that they got rid of their award chart, and I find it insulting. Restricting access to information is one of the most in-your-face power plays you can make. But consider the purpose the Skymiles serve for me. If I’m flying somewhere domestically (for which United and Alaska typically offer poor redemptions, if there’s even availability) in Economy, and neither Southwest nor Virgin America fly to my chosen destination, I can always fall back to flying Delta, since I know that there will be availability. My redemption value (cents per point) might be something like 1.2, but if you consider the fact that it costs me between 0.3 and 0.5 cents to earn a single Skymile (via Membership Rewards), that’s pretty much a no-brainer versus paying cash (this is separate from the argument of whether to use a cash back card or a points-earning card because we’re talking about redemption, not accrual).
Moreover, I’ve found Skymiles to be the most consistently useful currency for my parents, who fly mostly domestically out of New York and (almost) always together. Delta covers most of the map, and if their cash prices out of New York are competitive (which they almost always are), then I can pretty reliably save them money by using Skymiles, not to mention the fact that the multiple tiers of awards makes it far more likely that there is award space available for two. Given that my dad basically wants to avoid paying cash (i.e. retail price) at all costs, Delta offers me an unbeatable value proposition.
Diversify, and always explore.
The only reason I am able to speak this positively about Delta is that I never bet the house on them. I didn’t pour all my loyalty into its arms (whether miles or status), and as a result, I was well positioned to adapt to the changes in their loyalty program. This is true of every program in my toolkit. I keep as many points as possible in transferrable currencies, and when changes do occur (inside or outside my toolkit), I constantly re-evaluate the role the program in question can play in my overall strategy.
It also pays to re-evaluate your strategies even in absence of program changes. For example, my parents recently got a Chase Sapphire Preferred card, which gives them access to 1.25 cent per point redemptions on flights through the Chase portal. Although historically they’ve put their spending on the U.S. Bank Flexperks card (between 1.3 cents and 2.0 cents per point) at 1 point per dollar, if they instead put their daily spending on the Chase Freedom Unlimited card (1.5 points per dollar), they can both take advantage of Chase Ultimate Rewards transfers when beneficial or get a guaranteed 1.875 cents per point on their spending (1.5 * 1.25) when redeeming for flights (I actually like this strategy better than a 2% cash back card, although the 2% card is strictly better than the FlexPerks strategy).
That’s me, what about you?
The original idea for the post was to talk about the strategy of combining refundable awards bookings with revenue-based airlines (Southwest by default and JetBlue/Virgin America if you have status) with good last-minute award availability on more traditional chart-based programs, but this was a bit more spicy and it’s something I’ve been thinking about more and more as I scale up my miles earning to a point where my balances are hitting six and seven figures.
So what about you? What are your go-to programs? What do you use each program for?
Happy hacking!
Related Reading
Leave the Cannoli, Take the Cash
In either case, the credit card rewards are ‘free’. We can buy the MGCs at cost ($500) and liquidate them without loss (i.e. for $500), so we trade nothing but our time for the rewards we each get. As for me, I’d get $10 cash back per card, and for Esther, she’d earn 500 Alaska (AS) Mileageplan miles.
However, there is an opportunity cost to each of our rewards (more on opportunity cost here and here), namely, the rewards that we could have gotten by using a different card. My opportunity cost is 500 AS points, and Esther’s opportunity cost is $10.
Assuming that both options are valuable enough to us that it’s worth our time to go buy and liquidate the MGCs, we therefore need to use opportunity cost in determining which of the two alternatives to choose. And the answer boils down to not how much a AS mile is worth to either of us, but what we’d be willing to pay for it.
In our conversation, Esther said to me that she’d never seriously consider buying miles at more than 1 cent/mile (cpm). My contention, then, was that she should take the cash. Why? Let’s assume that outside the context of this deal, I handed Esther ten, crisp, one-dollar bills. Then assume Michael comes along and offers to sell her 600 AS miles for $10. Esther declines, because she had just finished explaining to me that she wouldn’t pay more than 1 cpm for AS miles, and in this case, she’d be paying $10/600 = 1.67 cpm.
Given this outcome, using her AS credit card instead of the Fidelity Amex to buy the MGCs would be an even worse deal, because it’s like she’s being offered only 500 miles for $10 instead of the 600 miles that Michael had offered. She would be buying AS miles at $10/500 = 2 cpm. Moreover, AS (and other airlines) routinely offer bonuses on the purchase of miles, often bringing the cost down to 2.1-2.3 cpm. In that case, I’d rather have the cash now and buy the miles when I know I need them (i.e. have a redemption in mind) rather than purchase speculatively at 2.0 cpm.
Now, given that the 500 miles are free (everything has an opportunity cost, but ‘free’ in this case means that it doesn’t leave you worse off), neither choice is bad. In fact, as Esther pointed out, arguably she would get more enjoyment out of the miles because spending cash is psychological expense regardless of the source, whereas spending miles for that same thing would feel much more like getting that thing for free.
Maybe I should have just taken the cannoli…
[youtube https://www.youtube.com/watch?v=yHzh0PvMWTI]