Economy Awards, Are They Worth It?

We all love to go on vacations, especially when they are for free. So that credit card that was promised to you on the airline's website, or even on board the plane promised 2 round trip tickets. So the question becomes... Economy Awards, Are they worth the points? The short answer is no. I'm sure the short answer isn't really all that satisfying, so let me break it down a bit more.

In he case of American Airlines, they promise that the old offer of 50,000 miles could get you 2 round trip tickets in economy. Now this offer is no longer available, so the 30,000 they offer now will get you one round trip with 5000 miles left over. Now remember that this requires you to get the best value for your economy awards, the off peak value is 12,500 miles for a one way ticket, so round trip is 25,000. Seems like a good deal when I'm an shelling out 55,000 United miles for a one way trip to Beunos Aires, and 62,500 miles for first class on the way back.

Let's break this down though. American Airlines posts the award chart on their website and you should take a look at it if you want to see all of the miles award prices for different regions of the world. So why do I think 62,500 miles is better than 12,500? Well keep on thing in mind, these destinations aren't comparable. 12,500 miles only applies to flying in the United States. The 62.500 I spent was down to southern South America. Either way, we'll give them a compare as is.

I'm going to use my booking for a trip to Indiana that I'll be going on in November as my example. A flight to Indianapolis costs roughly $500 direct on American, $350 if I connect, we'll assume the direct flight, to give the benefit of the doubt here and make your awards go a bit further money wise. If this is the case and you find the time when you can use an off peak award on this, you are looking at 12,500 miles for a $500 ticket. Wait though, that $500 ticket is round trip, so lets make that 25,000 miles for this round trip. That roughly equates to $0.02 per mile... not too bad... but not great.

Now lets review the flight I'm taking in first class from Beunos Aires back to Philadelphia. This one way trip costs $7000 at the time I booked it. The total cost in miles was 62,500. Keep in mind though, I own the American Airlines Citi credit card, so I get 10% of the miles spend back to my account. So in the end, I actually paid 56,250 miles for this trip. Taking into account the price of this ticket, each point was worth roughly $0.13 per mile spent.

Looking at the two redemptions you can quickly see that the first class ticket is worth far more than the economy class ticket, more than 6 times better. The airlines sell these credit cards because they are great for business, and they tout the round trip tickets in economy because that is the best return for them. If you really want to go for broke, your money should be on a first or business class international ticket... that's the sweet spot. Plus you get the added bonus of lie flat seats, much better service, better food, and oodles of leg room. There is a place and time for an economy award, but premium redemptions are better in most every way.