I did some annoying Air Miles calculations tonight. We are planning a trip to Cuba and we are trying to determine whether it makes sense to use our Air Miles or not. There are many annoying little details to think about. Since all Air Canada flights from Vancouver (YVR) to Havana, Cuba (HAV) are routed through Toronto (YYZ) (at least through Toronto, sometimes other cities as well) there are 3 options to consider: 1) using Air Miles for the YVR->HAV route, 2) the YVR->YYZ route, or 3) the YYZ->HAV route and obviously paying full price for whatever route is not covered by Air Miles in options 2) and 3). Also, because of the number of miles we have, some of these options work for both people, others work for only for one person. In some scenarios, our miles aren’t quite enough to meet the requirement but extra miles can be purchased for $0.30 + GST per mile. Also, I wanted to take into account the value of the remaining Air Miles (if any) associated with any of the scenarios. Also note that Air Miles only covers the base cost of the flight, not the fees (at least according to the lady I talked to on the phone).
Initially I ended up valuing the Air Miles at a very low price. I was valuing them according to what flights YVR-YYZ or YVR->HAV or YYZ->HAV were costing me in miles (works out to a valuation of $0.11-0.16/mile). But if we do have leftover miles after this trip we most likely will not be using them on those routes. My wife has a friend in Calgary and a flight there is likely in the near future so I checked how much miles were worth on that route. They are worth much more, at $0.23/mile. Also, the next time we fly anywhere (if at all) will be in November when we will take the rest of our vacation days. November is considered low season and a mile gets you much further at that time of year (on some routes the value of a mile goes from $0.11/mile to $0.16/mile). So I ended up assuming leftover miles were worth $0.16/mile. Here are the results:
Well it’s not really that illuminating. The cases which split the flight into two segments are bad deals all-around because the split flights are a lot more compared to the single round-trip flight for YVR<->HAV. The “without Air Miles” option is better because I have valued the leftover air miles at $0.16/mile which is higher than the cost of using them for that YVR<->HAV flight. If I value the leftover miles at $0.11/mile the gap between the “without using Air Miles” option and the “Using Air Miles to HAV for 1″ option becomes less than $100. That is something I am willing to pay in order to save the $638 on one of the flights now ($638=$808 base price of flight minus cost of lacking miles of $170) leaving more money in our pockets (or savings account, rather).
The other advantage of this is that using our Air Miles fully will bring our balance down to 0. I like that because it means we will not have any significant balance leftover in our Air Miles account. I am seriously considering getting rid of Air Miles account. The 10 years (yes I have been a collector since 1996 and have only redeemed once, for 750) it took me to get 7750 miles was not worth the hassle and I do not want any Miles hanging around in my account.
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