Expected value of points when transferring to airline partners?

[Anonymous]

I know this number can vary widely, but is there a cents/point value I should shoot for when transferring points to a card’s airline partners to book flights?  I’m not talking about the great deals but general day to day value. Like when does it make more sense to pay with cash when you can afford it?  Is there kind of a standard value with each major domestic airline...American, Jet Blue, Delta, United, Southwest?

It seems like it’s somewhere around 1.2¢-1.5¢ for the most part. Is this right?  High? Low?  

[NRB525]

Is there an airline you use often? One of the majors with a hub in your city? An airline you have miles already earned?

One of the key things to keep in mind is, the airline needs to fly where you want to go. So spending some time shopping on the airline site, seeing what fares are for a likely destination, 45 days to 90 days out, is a good way to get a feel for how they price, and how those prices compare to miles required, and award space.

Then, you can keep an eye on actual flights you want to take. If the redemption is not so good, you can recognize that and maybe decide to pay cash. If the offer is a really good use of that airline miles, then jump on the miles offer. I did this with Delta recently to get to Kona. Typically they seem to be 20,000 to 32,000 miles one way. Got one on the day I wanted, direct flight, for 16,000 miles, then paid to upgrade to Comfort Plus. I consider that a pretty good redemption. Others will look for first class redemptions, and Delta isn't going to compete for "good redemption" very often in that space.

A good redemption on a flight you won't be taking doesn't do you much good. An average redemption on a trip that means something to you can seem very worthwhile. It's all up to you what is a good redemption.

[wasCB14]

Knowing when to redeem isn't just a question of value, but also of your supply of and demand for miles. If you have a lot of miles, rarely fly, and don't anticipate any major trips in the future (international flights where you'd want premium seats) then it may make sense to redeem them for even a mediocre value (and perhaps focus on earning cash back). If you do expect to be able to redeem them well, it can make sense to hold onto the miles.

It's good to know your habits. I fly AA a few times a year and often book flights only a few days out. I don't have status with AA, and AA would want to charge me a close-in award booking fee of $75 per ticket. I can get some great values booking with Avios (avoiding the fee) but those point values might not be obtained by someone else booking the same flight further in advance, sometimes paying a lower cash price.

[K-in-Boston]

@NRB525 stated it beautifully!  FWIW Southwest points have an essentially fixed value of 1.28 cents as they're directly tied to the revenue cost.  Usually 1.2 to 1.5 cents with the other airlines is what you'll get for economy fares and would probably be the minimum you should shoot for when determining whether it makes more sense to pay for the flight or use miles.

[UpperNwGuy]

As a general rule, points are worth more on international flights than domestic flights, and they're worth more on first/business class airfare than on economy airfare.  I fly United to Europe twice a year in economy class using points/miles, and I find the points to be worth about 1.5 cents apiece.  I don't use United miles on domestic flights because they are often not even worth 1.2 cents each.  However, I have gotten good value from using points/miles on Jet Blue domestic flights.

[Peteyglad]

When I fly (Delta or American) I shoot for 1.5 cents. If it is below that I will pay cash. I fly often enough that my points will get used eventually. 

[imaximous]

I save my points only for international travel (and Hawaii). I find the domestic economy tickets inexpensive enough to pay for them in cash. I don't travel premium cabin either because the flights are usually short enough that I'm ok for a couple of hours. Plus, most times I'm traveling on my dime, I bring the whole family and purchasing 5+ tickets becomes too expensive to go up front even with points.
So, for international travel, I'm looking to get at least 2 cents in economy. There are times when I can get much more than that if I'm lucky, but 40k - 50k miles on a typical $800 - $1k ticket economy does it for me if I can't find a good redemption in business. For business class, I can usually find seats at 70k to 80k points for $3k to $3.5k tickets, but availability becomes an issue too.

[Anonymous]

Depending on which cards you have, it may make sense to use points through a portal.   So for the CSR for example, the points are worth 1.5c each when buying the ticket through the Chase portal, and this avoids any hassle with award availability (+ you earn airline miles on the flight).   So transferring for less than this won't make sense.

[Anonymous]

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@Anonymous wrote:

Depending on which cards you have, it may make sense to use points through a portal.   So for the CSR for example, the points are worth 1.5c each when buying the ticket through the Chase portal, and this avoids any hassle with award availability (+ you earn airline miles on the flight).   So transferring for less than this won't make sense.

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Excellent point!  Although as of now I am only in MR ecosystem, where there is no cash value option unless I get a Schwab Platinum.  

[K-in-Boston]

Well, there is a cash option (sort of) but 0.6% back as a statement credit brings a tear to my eye.