The Value of Air Miles
The dollar value of 1 Air Mile is
|Dollar value of 1 mile||Flexibility of miles||Can miles cover taxes and fees?|
- Limited Time: $120 annual fee waived in the first year*
- Welcome Offer: Get up to 3,000 AIR MILES Bonus Miles*
- Earn 1 reward mile for every $10 in credit card purchases*
- Earn Miles twice when you use your BMO AIR MILES Mastercard and show your AIR MILES Card at AIR MILES Partners*
How much are your Air Miles worth?
Before we begin, it is important to note that "Air Miles" and "Points" are the same and will be used interchangeably.
Certain flight regions provide better value for your hard-earned Air Miles. Here at Ratehub.ca we calculated the average dollar value of an Air Mile for every flight region during both the high and low seasons. Here is an Air Mile flight rewards chart outlining what we found out about redemption values:
|Flight Region||Destination||Low Season||High Season||Average|
|East Coast Canada||Halifax||$0.1506||$0.1674||$0.159|
|North West Territories||Yellowknife||$0.1635||$0.1403||$0.152|
|North Eastern US||New York||$0.1258||$0.2008||$0.154|
|Southwestern US||Los Angeles||$0.0984||$0.1282||$0.099|
|Central America/ Europe 1||Paris||$0.0877||$0.0650||$0.071|
|South America/ Europe 2||Helsinki||$0.0883||$0.1203||$0.104|
|Rio de Janerio||$0.1179||$0.0884|
|Middle East & Africa||Cairo||$0.0467||$0.1011||$0.062|
|Australia & New Zealand||Melbourne||$0.0751||$0.0985||$0.091|
On average, you receive the most value for your Air Miles by flying to the Midwest US region. Flights to Manitoba and East Coast Canada also provide good value for your Air Miles. It's best to redeem Air Miles during the high season since it typically provides better value than flights during the low season.
The Math Behind It:
The Air Miles flight program charges you a fixed mileage level based on the region you’re flying to and the time of year:
|Departure||Destination||Low Season||High Season|
|Toronto (Pearson)||British Columbia||3,600||4,900|
|Toronto (Pearson)||Eastern US||1,300||1,600|
- Low Season: January 8 - February 28, April 1 - May 31, September 16 - December 15
- High Season: March 1 - March 31, June 1 - September 15, December 16 - January 7
Here is the methodology we used to value Air Miles:
A. Look up the price of a flight between your destinations online through www.kayak.com
B. Using your Air Miles account, search for a similar flight and note the taxes and fees Air Miles charges for the flight
C. Take the price of the flight found online (A) and subtract the taxes that Air Miles would charge for a comparable flight (B), finding your net gain
D. Divide your net gain (C) by the total Air Miles required to find the value of one Air Mile
Case Study: Flying to New York (JFK) on points in late September 2014
The example below was priced out by Ratehub.ca in 2014.
|Total Cost of Flight||Air Miles Required|
$277.06 Price of a flight found on Kayak
Overall Flexibilty: Weak
|Taxes and fees covered?||Consistent value?||Transferable to/from other rewards programs?|
|Air miles cover the cost of fuel surcharges, leaving only the additional taxes and fees.||No, the value of your Air Miles change with many factors like flight destination and seasonality.||Yes, several rewards programs (HBC, Esso Extra, RBC) allow you to convert points to Air Miles, but not vice-versa.
Miles cannot be switched between Air Miles Dream and Cash rewards.
|More than one airline involved in program?||Can the points be used retroactively?||Expiration date on points?|
|Yes, there is a wide variety of airlines to select from. Popular airlines include: Air Canada and West Jet (Canada), American Airlines and Southwest Airlines (U.S.), Lufthansa and British Airways (Europe)||No, they must be used at the time of purchase (on flights and at sponsored vendors), or in advance using eVouchers.||Air Miles expire 5 years after the date they are earned. If you are inactive on your Air Miles account for 24 consecutive months, your Air Miles will expire.|
With the Air Miles reward program, there are two types of miles you can earn: Air Miles Cash and Air Miles Dream rewards. The upside about this is that you determine what percentage of your miles goes into Cash or Dream rewards. The downside is that once you’ve earned Cash or Dream miles, you cannot transfer them into either bucket later on.
Air Miles Cash adds some flexibility to the program by allowing you to instantly redeem your miles towards everyday purchases at sponsor locations (95 Air Miles = $10 off). Dream Rewards, on the other hand, allow you to redeem miles towards travel or merchandise exclusively on the Air Miles website. This lowers the flexibility of the Air Miles program since it removes your ability to shop around on any travel site for the best deals and flights, like other rewards programs.
Also, a common criticism of Dream redemptions is the difficulty getting the flight you want for the dates you want. If you have a rigid itinerary or schedule, to guarantee a flight on Air Miles points you would have to book far in advance or fly during the low season.
The Air Miles reward program isn’t the most flexible, but when used strategically, it can save you a bundle in travel costs. Furthermore, the ability to use Air Miles at over 100 partners allow for the quick accumulation of Air miles or the option for cash back redemption on everyday purchases.
Although the Air Miles program covers fuel surcharges, it does not allow you to use your points to cover additional taxes and fees. While this does not change the value of your Air Miles as seen in the "value of miles" tab (we’ve taken them into account when determining the value of an Air Mile), it can be disappointing for members who have a large Air Miles balance but cannot use them towards taxes and fees.
Listed below are the Air Miles required and the average taxes when traveling to each Air Mile flight region as calculated by Ratehub.ca (All flights are round-trip leaving from Toronto Pearson Airport booked 3 months in advance).
|Flight Region||Destination||Low Season||High Season||Tax||Average Tax|
|East Coast Canada||Halifax||1700||2200||$136.38||$136.38|
|North West Territories||Yellowknife||4000||5200||$118.93||$118.93|
|North Eastern US||New York||1300||1600||$155.64||$158.18|
|Southwestern US||Los Angeles||4300||5500||$162.57||$162.57|
|Central America/ Europe 1||Paris||5400||7000||$607.46||$454.60|
|South America/ Europe 2||Helsinki||6000||8000||$567.30||$458.36|
|Rio de Janerio||6000||8000||$349.42|
|Middle East & Africa||Cairo||9300||12500||$689.02||$627.42|
|Australia & New Zealand||Melbourne||14000||19000||$972.79||$932.12|
Best Way to Use Your Air Miles
The value of your Air Miles depends on what rewards you redeem your points for. The math to determine the average value of a mile can be seen in the “Value of Miles” tab. Some flights offer you very little value for your points and if you think you’ll fly in the near future, it’s worth saving your miles for more valuable destinations.
Ratehub.ca’s research shows the average value of an Air Mile is $0.121. Use this as your benchmark and whenever possible only redeem Air Miles when the value offered is close to or above the benchmark. Let’s look at an example.
It’s January 13th, 2015 and we’re trying to book a flight from Toronto to New York’s LaGuardia Airport for family day weekend: Friday, Feb 13th – Monday, Feb 16th. On Kayak, we can find a direct flight that will cost $288 including taxes and fees. Through Air Miles a similar flight would require 1,300 miles and an additional $117.56 in taxes and fees. Let’s calculate the value we would receive if we used our points.
Since $0.1311 is of greater value than the benchmark of $0.121, you will receive a strong return on your Air Miles. Redeeming your Air Miles in the above scenario will save you $170.44 and is a good invesment of your accumulated points.
Air Miles Dream Rewards are best suited to be redeemed for air travel (as their name suggests). Redeeming for flights provides the best value of the redemption options available to Air Miles members. The dollar value per mile when redeeming for merchandise pales in comparison to the dollar return on flights, providing roughly half the average dollar value of an Air Mile ($0.121/mile).
Let's take a look at the value of our miles when redeeming for two popular items: a Panasonic LED TV, and a Broil King grill.
|Price of Samsung 50 inch LED Smart HDTV||Air Miles Required|
$899.99 Price of TV on samsung.com
|Price of Broil King® Baron 440 Grill||Air Miles Required|
$549.99 Price of grill on Lowes.ca
Based on Ratehub.ca’s analysis (shown in detail on the “Value of Miles” tab) we have created an Air Mile value chart of the flight regions that on average offer a higher value than the benchmark of $0.121:
|Flight Region||Destination||Average value of a mile|
|East Coast Canada||Halifax||$0.159|
|North West Territories||Yellowknife||$0.152|
|Midwest U.S.||Kansas City||$0.231|
On average you receive exceptional value for your Air Miles by flying to the Midwest US region. Flights to Manitoba and East Coast Canada also provide good value for your points. Typically flights during high season offer more value than flights during the low season. Short haul, high season flights provide the highest dollar value for your points.
As you approach the date of a flight, the price of the ticket becomes more and more expensive every day while the required number of Air Miles and taxes remains constant. Since this is the case, you receive the greatest dollar value for you Air Miles when you book a last minute flight as opposed to booking months in advance.
The Air Miles Onyx program rewards top Air Miles collectors with numerous superior benefits. In order to become an Onyx collector, you must earn more than 6,000 Air Miles per year. As an Onyx collector, you’ll be granted access to travel and merchandise perks, special services, event and contest offers, and miles protection.
Travel perks include: greater access to airline seats, exclusive offers on select package vacations and cruises, and the ability to book flights with up to 40% fewer rewards miles. This is a great way to stretch your miles and ensure you get the most of every dollar you spend using your Air Miles credit card. In addition, your Air Miles won’t expire as long as you maintain Onyx status.
In contrast, the Air Miles Gold program rewards Air Miles collectors who earn 1,000 to 5,999 miles a year. This is much more attainable than the Onyx program. When you sign up for the BMO credit card, you’ll receive 1,000 miles with your first purchase. This would immediately qualify you for the Gold program.
The Gold program also offers travel and merchandise perks as well as events and contest offers. Gold collectors don’t receive as many benefits as Onyx collectors. However, you’ll still receive exclusive offers on select package vacations and cruises, and you can use up to 30% fewer miles to book select flights.
Whether you’re a Gold or Onyx Collector you’ll be able to redeem up to 40% fewer miles for select merchandise. In addition, you’ll be given access to a number of unforgettable events and contests, including up to 20% fewer reward miles on eligible seasonal activities, free movie passes on select films, and monthly giveaways.
For both the Gold and Onyx programs, you must re-qualify each year by Dec. 31. This means in order to maintain your status you must earn your required miles every year between Jan. 1. and Dec. 31.