Award seats or cheap flights: Five steps to help you decide

So you’re planning your next vacation, and due to your acquisition of frequent flyer miles through flights, meals, credit cards, and shopping, you have enough miles for an award ticket. You’re excited about flying for free, but then you notice that a few low-cost airlines fly between your home and destination airports. To top it off, some of the major airlines are having fare sales to compete with the smaller carriers, and prices on your route have dropped.

What do you do: Use your miles or take advantage of cheap tickets?

The decision to book an award ticket has gotten more difficult now that airfare can be so low. But you can put your worries aside when you follow our five steps to figuring out whether an award ticket or a cheap ticket will get you the best value on your next flight.

Step one: Figure out the value of your miles

The first thing to do is determine the value of the miles you’re thinking of spending, so you have some basis of comparison. The industry standard is to value a mile at two cents, though some people argue that the value is closer to one cent. If you’re planning a domestic flight on most airlines, for example, you would need 25,000 miles for an award. Multiply 25,000 by two cents per mile and your flight would cost the equivalent of $500 (or $250 if you believe a mile is worth only one cent).

In this case, if your flight will cost more than $500, you would save money by using miles. Many people save miles for emergency or last-minute flights so they can avoid pricey walk-up fares. But if you’re planning well in advance, you can often find flights for under $500, especially if you don’t mind stopping over in a hub city. Remember to shop around for the best price; you can use our fare-comparison tool to compare prices on various websites or check SmarterTravel.com’s Airfare page for the latest sales.

Step two: Don’t forget about earning miles

When you are deciding between payment methods, don’t forget to factor in the value of the frequent flyer miles you will earn when you pay for a ticket. Award tickets do not earn frequent flyer miles, whereas paid tickets almost always do. Say the cheapest flight on your route costs $550, and you’re thinking about booking an award instead. When you factor in the miles you will earn as a discount, the cost of your paid ticket goes down. For example, if the flight earns 4,000 miles, valued at $80, the total value of your flight now becomes $470. Plus, you’ll be that much closer to elite status and a more expensive award ticket for your next trip.

Step three: Choose between economy and first class

If you have a lot of miles, you might want to consider using them for a first-class seat. While coach class is cheaper, whether you use miles or pay cash, sometimes the comfort of first class is worth the extra miles. For example, a domestic first-class award costs around 45,000, a cash value of $900. A first-class seat on a cross-country flight can easily cost over $900, justifying your use of miles.

Plus, if you find that you feel cramped in most economy-class seats, you might prefer to fly first class on longer haul flights, where you will have extra room for the five or six hours you’re in the air, while enjoying the extra service and entertainment, as well. Especially on long international flights, you might find that traveling in business or first class means the difference between arriving at your destination well rested and ready to go, and getting off the airplane groggy and achy.

Step four: Think about using miles to upgrade

If you want the absolute best value for your miles, use them to upgrade a paid ticket. Upgrades for domestic travel usually cost 10,000 miles to upgrade a full-fare economy round-trip ticket or 30,000 miles to upgrade most other economy tickets. The value of 30,000 miles is $600, so if you upgrade a fare under $300, you’re still getting a better deal than using miles for a first-class seat.

Just like when using miles for a first-class ticket, you don’t want to waste your upgrades on short, one- to two-hour flights. But an upgrade on a long flight could be a very worthwhile use of your cash and miles. Just be sure to check with your airline about which fare classes are ineligible and how to confirm your upgrade in advance.

Step five: Evaluate your own budget

In the end, only you can decide how much a mile is worth. If you absolutely have to go to that event across the country and your wallet is feeling strained, by all means book an award ticket, no matter what the cost of an equivalent discounted ticket. Or, if you decide how much you are willing to spend on a flight and can’t find a price under that amount, go ahead and pay with miles. There’s no wrong choice, unless you end up unhappy with your travel plans.