Which Airline's Frequent Flyer Miles Have the Best Value?

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If you understand the concept of foreign currencies and their value when converted to U.S. dollars, you can understand the idea of trying to place a value on rewards points that you earn from various loyalty programs. Each airline's "currency" is worth so much in dollars and cents. Knowing that value can help you decide which airline rewards programs to concentrate your efforts on, or determine whether an award flight is a good deal given how many points it will cost you.

Unfortunately, the trend in recent years has been for the major airlines to devalue their points in various ways. But that doesn't mean it's not worth collecting them. Travelers can still find great deals by using frequent flyer miles to score free flights. And if you have a co-branded airline credit card, that can help you rack up points even faster.

Valuing points and miles is complicated

On the surface, it's not that difficult to come up with a value for an airline's rewards points. A point or mile is only worth as much as what you can redeem it for. To assign a value to your miles, you need to look at what kinds of flights you can redeem them for, how many miles are required, and how much you'll have to pay in additional taxes and fees. For any particular flight, you would look up the cash price of the flight and subtract the cost of the taxes and fees that you'd have to pay to use your miles. Next, you can divide this amount by the number of required miles for that flight to reach the value per mile.

But it's a little more complicated than that. You also have to take into account the availability of award seats at the lowest mileage levels. For example, airlines might publish an award chart that lists business class flights to Australia for a certain number of miles. This could be an extremely good use of your miles, but if they almost never make award seats available at that price, you can't really use that award as an example of how much your miles could be worth.

That's what makes points valuations more of an art than a science. There are a number of factors that make up the typical value of a rewards point, and valuations won't be the same for any two people. It is nevertheless helpful to figure out rough estimates of points values to serve as a rule of thumb when evaluating your options.

Over the last 10 years, I've spent a tremendous amount of time researching and booking award flights on behalf of myself, my friends, my family members, and people who pay me for this service. Here are my estimates of the value of the points and miles from the major domestic frequent flyer programs.

American Airlines AAdvantage

American Airlines AAdvantage was one of the first frequent flyer programs ever created. One of its strengths is its competitive award chart, which shows a fairly reasonable number of miles required for MileSAAver awards (the lowest mileage tier) on some popular routes. MileSAAver flights generally require fewer points than other types of award flights, which tend to be more flexible.

For example, the chart shows MileSAAver award flights in economy class to Mexico, Central America, and the Caribbean for just 30,000 miles, round-trip, which compares favorably to many of the airline's competitors. Business class awards to Europe are only 115,000 miles, round-trip, and American even offers off-peak MileSAAver awards to some destinations that can be a real bargain. (See also: Which American Airlines Credit Card Should You Get?)

However, there are two problems with the current American Airlines AAdvantage program. First, the airline has dramatically curtailed the availability of MileSAAver award flights in recent years, especially on intercontinental business and first class flights. If you are saving your American Airlines miles to fly a long distance in the front of the plane, you are likely to be disappointed when you try to redeem them.

Next, American's primary international partner, British Airways, can impose large fuel surcharges on its award flights. These fuel surcharges, which were rebranded as "carrier imposed charges" after fuel prices retreated to historic lows, can add hundreds of dollars to the price of an award ticket. It can sometimes cost more to redeem your miles than it would to just buy a ticket. (See also: How to Use British Airways Points on U.S. Flights)

Therefore, I consider American Airlines miles to be worth about one to two cents each for economy class travel, and only about two to three cents each toward their extremely scarce first and business class award seats. (See also: How to Get More Value Out of American Airlines Miles)

Valuation:
1–2 cents per point for economy class.
2–3 cents per point for premium class seats.

Delta Air Lines SkyMiles

Booking award travel with Delta can be frustrating. About three years ago, Delta took the unprecedented step of removing its award chart from its website. How many miles does Delta charge for award seats? You'll never know until you search the website for one particular flight, and the price you get could be anything.

Sometimes they offer award seats for very few miles, but often these are short flights that are being heavily discounted anyway. On the other hand, it's not uncommon to see Delta offering premium class international awards for the outrageous price of several hundred thousand miles, each way. But occasionally, Delta offers "sales" where you can receive better value from your miles. (See also: Which Delta SkyMiles Credit Card Has the Best Value?)

When you redeem your miles for partner awards, it can sometimes still be possible to receive a decent value in cents per mile. Unfortunately, Delta miles are typically worth little more than one cent each toward most flights, and possibly as much as two cents each toward some partner flights. However, the sheer unpredictability and unaccountability of the SkyMiles program makes earning these miles a very poor investment.

Valuation:
1 cent per mile on most flights.
2 cents per mile on some partner flights.

United MileagePlus

United's MileagePlus program is not immune to the frequent devaluations that affect other airline programs, but at least United publishes its award chart and notifies customers well in advance of any changes.

The strengths of this program include its 28 Star Alliance partners, including Air Canada, Lufthansa, Turkish Airlines, Austrian, ANA, and Air China. Furthermore, all of these partners are searchable online and award availability can be excellent.

But when it comes to award availability on United flights, you can sometimes find a decent amount of economy class seats, but fewer seats in business class. However, with the right credit card you can receive additional access to the lowest priced award seats. Therefore, I'd value United miles at around 1.5 to 2 cents each for economy class domestic flights, and 3 to 4 cents each for seats in international business class. (See also: Which United MileagePlus Credit Card Should You Get?)

Valuation:
1.5–2 cents per mile on domestic economy.
3–4 cents per mile on international business class.

Southwest Rapid Rewards

Southwest operates what is called a revenue-based program, which means that it closely ties the number of miles required for an award ticket to the price of the flight. Rapid Rewards points are consistently worth 1.4 to 1.7 cents each for flights in its lowest fare class, called "Wanna Get Away." But if you need to use your points to purchase tickets from one of their higher fare classes, "Anytime" or "Business Select," you'll receive much less value per point. (See also: Southwest Rapid Rewards Premier Credit Card)

Valuation:
1.4–1.7 cents per mile for Wanna Get Away fares.
1.1 cents per point towards Anytime fares.
0.95 cents per point for Business Select.

JetBlue

JetBlue's TrueBlue frequent flyer program is revenue based, much like Southwest's. However, the value of JetBlue points will vary between nearly 1 cent each and about 1.8 cents. In general, you are more likely to get more value per point from international flights as well as those in their premium class, which they call "Mint." You can also expect to receive about 1.5 cents in value from JetBlue's vacation packages.

Valuation:
1–1.8 cents per mile for domestic economy.
1.5 cents per mile for JetBlue vacation packages.

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