Travel Hacking From Scratch – Part 9 – Understanding the Power of Partners

Welcome to the Travel Hacking from Scratch Series – a series dedicated to getting those new into Travel Hacking up the curve as quickly as possible. Below is the layout of the series with links back to already published articles.

Today our topic is Understanding the Power of Partners – how you can leverage partners to open up redemption possibilities.

The Benefits of Travel Hacking

Earning Points

Credit Cards – Which Card and Why

Category Bonuses

Churning Credit Cards

US Credit Cards (ITIN)

Referral Bonuses

Manufactured Spending

Using Your Points

Alternatives to DIY

Understanding the Power of Partners

Weighing Convenience vs Cost

How to Avoid High Taxes and Charges

Sweet Spots

How to Travel Better

Why You Need Status

Leveraging Status

Understanding Your Rights

Beyond Travel – Financial Freedom

Alliances and Partners

A while back, I wrote an article titled “Understanding Airline Alliances and Partnerships” to provide some color around what Alliance and Partnerships are and why they exist but the simplest explanation is that a single airline cannot be all things to all people so they have to provide more value through partnerships and alliances.

Each country owns the airspace above it and they also set the rules for which airlines are allowed to land in their country. In almost all cases, airlines are only allowed to fly from their country to any other country and from any country back to their own country. Every airline in the world is based out of a country and that country is where they are allowed to operate from and to.

For example, Air Canada can fly from Canada to (almost) any country and back but in most situations, they cannot fly within another country. Air Canada could not fly from New York to Los Angeles as those routes can only be serviced by US-based airlines.

The exception to this rule is what is known as a Fifth Freedom Flight, where airlines are allowed to fly between two different countries with neither country being the home country of the airline. A great example of this is with Cathay Pacific (CX). Cathay’s home base is in Hong Kong (HKG) but has a route between Vancouver (YVR) in Canada and New York (JFK) in the United States. There are various reasons for fifth freedom flights but in most cases, it’s based on demand as many of these routes serve as feeder routes.

The main takeaway here is that almost all airlines are part of an alliance or part of a partnership. This is done to make their Frequent Flyer Programs (FFPs) more attractive and flexible.

Why This Matters

I can’t tell you how many times I have heard “but I don’t fly on Alaska Airlines … why should I collect Alaska Miles?”. That demonstrates a rudimentary understanding of how miles and points work. In almost all instances, when you collect the miles of a specific airline, you aren’t locked into that airline. Understanding this is to understand the power of partnerships.

If you can understand which program’s points provide you with the most options, it makes it a lot easier to find the flights you need to the destinations you want.

How to Decide

You can start by looking to see which airline alliance flies to the destination you want. You can do this by using FlightConnections and using the Alliance filter.

For example, if you wanted to go to Cape Town (CPT), you can take a look and see which Alliance has the routing that might make the most sense for you.

Star Alliance has routing to Cape Town from 19 cities from around the world, including a direct flight from New York’s Newark (EWR) airport.

Sky Team only has 4 connecting airports but nothing from North America, meaning you would have to find your way from North America to Amsterdam (AMS), Paris (CDG), or Nairobi (NBO) in order to get to Cape Town.

OneWorld has limited routing similar to Sky Team with no direct flights from North America, so finding award availability becomes more complicated.

In the examples above, it’s clear that Star Alliance has both the most direct flights into Cape Town (CPT) as well as a flight from New York, a city that’s fairly easy to get to from anywhere in North America. This would suggest that if you want to get to Cape Town, you would concentrate on earning miles with a program within the Star Alliance, such as Air Canada’s Aeroplan program.

In addition to Alliances, you should also familiarize yourself with Partnerships. Partnerships are very similar to Alliances in that you can use the points and miles of one program to book the award availability of another program.

The main difference between an Alliance and a Partnership is that all members of an Alliance agree to work together when setting things like the redemption schedule so you will see very similar rules and redemption pricing in an Alliance. In a partnership, the agreements are between two individual airlines and negotiations do not necessarily have to conform with with agreements made with other airlines.

Alaska Airlines is a great example of an airline with a strong partnership strategy. At the time of this article, Alaska partners with 18 airlines. When redeeming your Alaska Miles for one of those partners, there’s a good chance that pricing can differ (sometimes significantly). This is because each partner sets their own redemption pricing.

For example, in Alaska’s program, if you wanted to fly to the Middle East from Canada, you would see very different pricing between Cathay Pacific and Emirates.

Choice Equals Freedom

I have always advocated for you to earn miles or points in a program that gives you the most choice when it comes to flexibility. In the example above where we were looking to fly to Cape Town (CPT), in theory, you are better off in a program within the Star Alliance, but that isn’t always the case because there may not be award availability with the Star Alliance partners.

If you had points in a program such as American Express’ Membership Rewards, you would have what are known as transferrable miles. With Membership Rewards, there are transfer partners within each of the major alliances:

• Star Alliance – Air Canada Aeroplan
  • 1,000 Membership Rewards = 1,000 Aeroplan Miles
• OneWorld – British Airways Avios
  • 1,000 Membership Rewards = 1,000 Avios Miles
• Sky Team – Delta SkyMiles
  • 1,000 Membership Rewards = 750 SkyMiles

Additionally, Membership Rewards can transfer to the airline programs of Cathay Pacific’s Asia Miles, Alitalia’s MilleMiglia, and Etihad Guest. You can also transfer to Hilton Honors and Marriott Bonvoy. Having that choice is key when it comes to increasing your odds of finding the award availability you are after.

Thankfully, it’s quite easy to earn American Express’ Membership Rewards through credit card sign up bonuses including:

• American Express Gold Personal – 25,000 Membership Rewards after $1,500 spend – $150 Annual Fee
• American Express Gold Business – 40,000 Membership Rewards after $5,000 spend – No Annual Fee for the First Year
• American Express Platinum Personal – 60,000 Membership Rewards after $5,000 spend – $699 Annual Fee (get that to $499 – info in the review)
• American Express Platinum Business – 60,000 Membership Rewards after $7,000 spend – $499 Annual Fee
• American Express Colbalt – 40,000 Membership Rewards Select points.  Get 2,500 points on a monthly basis based on meeting a minimum spend of $500 per month.  Get an additional 10,000 points if you spend $3,000 in the first 3 months – $10/month fee ($120 per year).

If at all possible, you should collect your miles and points in a transferrable currency. I have personally used Membership Reward points to transfer to Aeroplan, Avios, Hilton and Marriott. Having this flexibility means that I can almost always use my points to fund the travel I want.

Conclusion

The big idea you should take away from this article is that you aren’t locked into flying with a particular airline if you collect their miles or points. If you wanted to experience taking a shower at 40,000 feet in Etihad’s First Class Apartments, you wouldn’t necessarily look at collecting Etihad Guest miles, but instead, you might look to American Airlines Advantage Miles.

Understanding which program provides the best value for the product you want to fly, goes a long way to achieving your dream redemption.

Series Navigation

<< Travel Hacking From Scratch – Part 7 – Manufactured SpendTravel Hacking From Scratch – Part 11 – How to Avoid High Taxes and Charges >>