Why miles and points is the cheapest way to travel

The  old-fashioned way to book flights is to go to a travel agent or online booking site and just pick the first one that looks good. Sure sales come and go and there are tricks you can use to try get the cheapest and best flight, but for the most part, it's pretty rare to get a screaming deal.

A well known, but incredibly under-utilised method of being able to travel for less money is to take advantage of frequent flyer programs. These programs let you use miles or points instead of money to book flights.

Traditional Travel

 
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  • Look up travel online/with travel agent
  • Price for a specific route varies depending on when you book.
  • Pay the whole thing with your money

Miles & Points

 
Points-icon
 
  • Collect points/miles
  • Price for a specific route is almost always the same regardless of when you book
  • Redeem miles/points for travel - just pay the fees dependent on which airlines and airports you use 

To fully understand how valuable the world of miles and points is, it is easiest to compare the cost of a flight using each of the methods outlined above.

Let's look at a few different trips to start with. We will look at the following scenarios and compare prices in actual out of pocket cost.

  • Short-haul (1-3hr flight)
  • Long-haul (3-6hr flight)
  • Intercontinental long-haul (6hr + flight)

We will be using Canada as an example but it doesn't actually matter which cities we are referring to or which currency we use. The savings are obvious as seen below.

Short Haul (1-3 hrs)

Vancouver - Calgary
yvr-yyc

Traditional method

$200-$400

Miles & Points

$20*-$200 fees
+ 15k Aeroplan miles

*price variation with points depends on the fees that the airline charges (namely any major carrier surcharge) and the airport fees can vary slightly between airports and countries you happen to be flying to.

In this instance, since the cash price was $286, and the miles price was only $156 in fees, 15,000 Aeroplan miles saved us about $130 ($286-$156) for a roundtrip flight. What that technically means is that in this instance, our 15,000 miles was worth $130. How much your miles are 'worth' can vary greatly depending on what you redeem them for. But as mentioned, things get really interesting when you consider the fact that even at christmas, or even when booking the day before, when the cash price of the flight goes up by about triple, the miles price and fees stays exactly the same.

CPM = Cents per mile

= What you saved (in cents) / What miles you spent
= $130*100  /  15,000 miles
= 0.86 cents/mile

So to be able to compare, we have done the math and figured that if 15,000 miles equals $130, then that equals 0.86 cents per mile (CPM = $130*100/15,000).

Now let's look at Long Haul.

Long Haul (3-6 hrs)

Vancouver - Toronto
yvr-yyz

TRADITIONAL METHOD

$400-$800

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Miles & Points

$20*-$200 fees
+ 25k Aeroplan miles

CPM = Cents per mile

= What you saved (in cents) / What miles you spent
= $389*100  /  25,000 miles
= 1.56 cents/mile

In this instance, since the cash price was $541 and the miles price only cost us $152 in fees, 25,000 Aeroplan miles saved us $389. Again, that means that our 25,000 miles was worth $389.

Notice the value of the miles in this instance works out to be almost double at 1.56 cents/mile? Cool now lets go one further.

Intercontinental Long Haul (6+ hrs)

Vancouver - Sydney

TRADITIONAL METHOD

$900-$2,000

Miles & Points

$100-$250 fees
+ 90k Aeroplan miles

CPM = Cents per mile

= What you saved (in cents) / What miles you spent
= $1150*100  /  90,000 miles
= 1.28 cents/mile

In this instance, the cheapest flight we can see is $1,365, but using miles, we only have to pay $214 in fees. So our 90,000 miles saved us $1,150. Our 90,000 miles in this case was worth $1,150 or 1.28 cents/mile

Not quite as good as the last one in terms of value per mile, but still great considering this imaginary currency just got you an international flight and saved you over $1,150.

This doesn't even begin to address the amazing opportunities you have at flying business and first class flights and getting upwards of 4, 8 or even up to 14 cents/mile. Saving money is good, but as a general rule, it's best to keep CPM above 1.5 - 2 cents, otherwise sometimes the effort put in to earn the miles isn't really worth it. See PointsNerd's Guide to CPM for more info.


Now it is at this point that people often say:

"Yes, but how the hell am I going to get that many miles?! It took me a year just to get 1,000 of them and I have to fly more to get more?!" 

The answer is the final nail in the coffin of booking flights the old way. It is relatively easy to earn a significant amount of miles very quickly through points and miles earning credit cards.

Take a look at our beginner's guide to credit cards and take a walk on the points and miles side of travel. You will soon wonder why you hadn't done it earlier!