The most valuable airline miles might surprise you

By Meghan Coyle | NerdWallet

Getting essentially the most worth out of journey rewards issues to a number of frequent flyers.

According to a 2023 NerdWallet survey of greater than 2,000 U.S. adults performed on-line by The Harris Poll, 35% of journey rewards credit score cardholders say they attempt to get the absolute best worth when redeeming their earned factors/miles for journey.

For the final 4 years, when you needed to gather essentially the most helpful airline miles amongst U.S. carriers, you’d in all probability accumulate Southwest Rapid Rewards factors. According to NerdWallet’s valuations, Southwest Airlines factors have hovered round 1.5 cents per level since 2019 (after we began accumulating the info). That means vacationers can normally redeem 10,000 Southwest factors for a $150 award flight.

Let’s put that in perspective. In 2020, Southwest Rapid Rewards factors had been value a whopping 1.6 cents, whereas each different main U.S. airline’s factors had been value just one to 1.1 cents. Southwest Rapid Rewards members might ebook extra flights (or dearer flights) as a result of their factors had been value nearly 1.5 instances as a lot as everybody else’s.

But different airways began catching up over the previous three years. In 2022, Southwest, Delta Air Lines, American Airlines and JetBlue all tied for essentially the most helpful miles. And this 12 months, Southwest has lastly misplaced its crown to … American Airlines.

Yeah, it’s a shock to us, too, contemplating American Airlines did away with its home award chart in April and removed its low-cost SAAver and AAnytime awards. Usually, airline and resort packages that change to dynamic pricing — as an alternative of utilizing award charts — have decrease level values, not greater.

So why are American Airlines AAdvantage miles value a lot now? And how did the remainder of the airways fare in our annual evaluation of airline and resort factors? Here are a few of the highlights from our newest information.

How have factors modified in worth final 12 months?

To calculate the worth of airline miles and resort factors, we accumulate real-world information on 1000’s of flights and resort stays and evaluate money costs and award costs to find out the baseline worth of every loyalty program’s factors.

American Airlines miles are value 1.7 cents this 12 months, up from 1.5 cents final 12 months. The subsequent highest are Southwest and JetBlue, which haven’t modified in valuation and stay at 1.5 cents per level.

Alaska Airlines miles climbed this 12 months to 1.4 cents. They’re additionally companions with American Airlines by the Oneworld alliance.

Frontier Airlines additionally added a couple of tenths of a cent, so their miles at the moment are value 1.1 cents. They’re ultimately out of the under-1 cent valuation that has plagued the finances airways in our evaluation. But then once more, perhaps it shouldn’t come as a shock since Frontier additionally had the best worth rewards program final 12 months.

The greatest loser is Delta Air Lines, with its factors falling from tied for first (1.5 cents) final 12 months to barely beating Frontier Airlines. Delta SkyMiles at the moment are value 1.2 cents — the identical as United Airlines and Hawaiian Airlines.

Why American Airlines’ miles are so helpful

The American Airlines award chart could also be gone, however the dynamic pricing nonetheless offers glorious worth on some routes. We discovered a number of candy spots on home and worldwide itineraries the place you would redeem factors for greater than 2 cents per level … in economic system! Usually, you’d must ebook enterprise class flights (which typically have a lot greater money costs that firms don’t thoughts paying) with factors to see that prime of valuation with airline miles.

It didn’t appear to matter how far out you ebook, both. There had been many award flights the place you would get a number of worth to your factors irrespective of whether or not you had been reserving 15 days out or six months out. You might even get some offers when reserving vacation flights with AAdvantage miles.

A caveat about dynamic pricing

Loyalty packages are rising, and so is the dependence on dynamic pricing. Keep in thoughts that airways like Southwest hold their valuation pretty constant. If the money worth goes up, the factors worth goes up by an equal proportion.

American Airlines, alternatively, has a better baseline valuation than Southwest, however there are numerous instances once you may look to make use of your miles for a flight and discover that the choices are all beneath baseline worth. The money worth and miles worth usually are not as carefully correlated.

In different phrases, when you wish to scour for offers and also you need extra choices to ebook worldwide flights on factors, you may wish to begin accumulating American AAdvantage miles. If you’d relatively not do the comparisons each time you ebook and also you normally fly home, you may wish to persist with Southwest Rapid Rewards factors.

How to rethink your journey rewards technique

Our evaluation has proven that award pricing adjustments yearly, so it’s a superb reminder to make use of your factors as an alternative of hoard them, as a result of they could be value much less sooner or later.

Inflation has largely cooled with airfares down nearly 19% 12 months over 12 months, in keeping with client worth index information for July. With decrease inflation, it’s unlikely we’ll see factors leap in worth like they did final 12 months. Spend your factors when it is smart. Knowing the worth of airline miles is especially helpful in case you are pondering of getting a brand new journey bank card, transferring bank card factors to an airline accomplice, or just making an attempt to resolve whether or not to make use of money or factors to pay to your subsequent flight. If the factors worth is greater than the money worth, cough up the money and save your factors for a greater redemption.

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Meghan Coyle writes for NerdWallet. Email: [email protected]. Twitter: @inkwaves.


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