The Value of Air Miles

The dollar value of 1 Air Mile is
$0.121

Dollar value of 1 mile	Flexibility of miles	Can miles cover taxes and fees?
$0.121	Weak	Partially

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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 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
British Columbia:	Vancouver	$0.1535	$0.1426	$0.148
Alberta	Calgary	$0.1374	$0.1453	$0.141
Saskatchewan	Saskatoon	$0.1525	$0.1482	$0.150
Manitoba	Winnipeg	$0.2136	$0.2019	$0.208
Ontario	Ottawa	$0.0868	$0.1522	$0.120
Quebec	Montreal	$0.1004	$0.1635	$0.132
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
North Eastern US	Chicago	$0.1266	$0.1642	$0.154
Midwest US	Minneapolis	$0.2225	$0.1710	$0.231
Midwest US	Kansas City	$0.3020	$0.2296	$0.231
Northwestern US	Seattle	$0.1153	$0.0997	$0.041
Northwestern US	Portland	$0.0380	$0.0445	$0.041
Southwestern US	Los Angeles	$0.0984	$0.1282	$0.099
Southwestern US	Dallas	$0.0933	$0.0742	$0.099
Southeastern US	Miami	$0.1085	$0.1312	$0.149
Southeastern US	Atlanta	$0.1950	$0.1594	$0.149
Caribbean	Punta Cana	$0.0965	$0.1044	$0.105
Caribbean	Jamaica	$0.0896	$0.1306	$0.105
Mexico	Cancun	$0.0879	$0.0944	$0.100
Mexico	Puerto Vallarata	$0.0719	$0.1476	$0.100
Hawaii	Honolulu	$0.0713	$0.0823	$0.078
Hawaii	Maui	$0.0714	$0.0863	$0.078
Central America/ Europe 1	Paris	$0.0877	$0.0650	$0.071
Central America/ Europe 1	San Juan	$0.0484	$0.0827	$0.071
South America/ Europe 2	Helsinki	$0.0883	$0.1203	$0.104
South America/ Europe 2	Rio de Janerio	$0.1179	$0.0884	$0.104
Europe 3	Warsaw	$0.0788	$0.0552	$0.069
Europe 3	Istanbul	$0.0723	$0.0687	$0.069
Middle East & Africa	Cairo	$0.0467	$0.1011	$0.062
Middle East & Africa	Lebanon	$0.0358	$0.0639	$0.062
Asia	Bangkok	$0.0785	$0.0997	$0.088
Asia	Tokyo	$0.0836	$0.0894	$0.088
Australia & New Zealand	Melbourne	$0.0751	$0.0985	$0.091
Australia & New Zealand	Auckland	$0.0777	$0.1145	$0.091
Total Averages		$0.1101	$.1210	$0.121

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
Toronto (Pearson)	Caribbean	4,400	5,800
Toronto (Pearson)	Asia	9,300	12,500

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	1300 Points

Step 1: Determining Net Gain

^$277.06 flight price ^$125.74 taxes, fees & surcharges =

^$151.32 net gain

Step 2: Calculating the Value of One Air Mile

^$151.32 net gain ÷ 1300 Air Miles =

^$0.1164 / Air Mile

Overall Flexibilty: Weak

Taxes and fees covered?	Consistent value?	Transferable to/from other rewards programs?
Partially	No	Partially
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	No	Yes
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
British Columbia:	Vancouver	3600	4900	$139.93	$139.93
Alberta	Calgary	2900	3800	$150.43	$150.43
Saskatchewan	Saskatoon	2500	3300	$139.93	$139.93
Manitoba	Winnipeg	1600	2000	$133.88	$133.88
Ontario	Ottawa	1200	1400	$120.06	$120.06
Quebec	Montreal	1300	1500	$136.37	$136.37
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
North Eastern US	Chicago	1300	1600	$160.71	$158.18
Midwest US	Minneapolis	1600	2100	$160.71	$158.17
Midwest US	Kansas City	1600	2100	$155.63	$158.17
Northwestern US	Seattle	3900	5200	$162.57	$162.57
Northwestern US	Portland	3900	5200	$162.57	$162.57
Southwestern US	Los Angeles	4300	5500	$162.57	$162.57
Southwestern US	Dallas	4300	5500	$162.57	$162.57
Southeastern US	Miami	2800	3500	$162.57	$162.57
Southeastern US	Atlanta	2800	3500	$162.57	$162.57
Caribbean	Punta Cana	4400	5800	$204.95	$201.92
Caribbean	Jamaica	4400	5800	$198.89	$201.92
Mexico	Cancun	4400	5800	$153.74	$159.02
Mexico	Puerto Vallarata	4400	5800	$164.30	$159.02
Hawaii	Honolulu	7900	10500	$174.03	$174.03
Hawaii	Maui	7900	10500	$174.03	$174.03
Central America/ Europe 1	Paris	5400	7000	$607.46	$454.60
Central America/ Europe 1	San Juan	5400	7000	$301.73	$454.60
South America/ Europe 2	Helsinki	6000	8000	$567.30	$458.36
South America/ Europe 2	Rio de Janerio	6000	8000	$349.42	$458.36
Europe 3	Warsaw	6300	8500	$598.22	$629.70
Europe 3	Istanbul	6300	8500	$661.18	$629.70
Middle East & Africa	Cairo	9300	12500	$689.02	$627.42
Middle East & Africa	Lebanon	9300	12500	$565.82	$627.42
Asia	Bangkok	9300	12500	$490.98	$417.81
Asia	Tokyo	9300	12500	$344.64	$417.81
Australia & New Zealand	Melbourne	14000	19000	$972.79	$932.12
Australia & New Zealand	Auckland	14000	19000	$891.45	$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.

Maximization Rules

Compare your redemption value to the Air Mile benchmark

RateHub’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.

Step 1: Determine the net gain of redeeming your miles

^$288.00 flight price ^$117.56 taxes & fees =

^$170.44 net gain

Step 2: Determine the value of your miles

^$170.44 net gain ÷ 1300 miles =

^$0.1311 value

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.

Redeem Dream Miles for travel rather than for merchandise

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	13750 Points

Value of Your Miles

^$899.99 price ÷ 13750 Air Miles =

^$0.0655 / Air Mile

Price of Broil King® Baron 440 Grill	Air Miles Required
^$549.99 Price of grill on Lowes.ca	7100 Points

Value of Your Miles

^$549.99 price ÷ 7100 Air Miles =

^$0.0775 / Air Mile

Redeem for the most valuable flights

Based on RateHub’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
Saskatchewan	Saskatoon	$0.150
Manitoba	Winnipeg	$0.208
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.

Become an Onyx or Gold Program Member

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 50% 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.