By: Julie Szpira
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Every traveler is trying to maximize the value of the miles and points they have earned. Understanding how award tickets are priced is essential when trying to maximize the value of your hard earned points and miles.
Award ticket pricing is not standard across all airlines, so you need to learn the different award pricing schemes to find the best use of your miles and points.
There are three basic types of award programs: revenue-based, region-based, or distance-based. Which program is best for a particular trip will depend on a few variables including the cash cost of the ticket and particular region definitions.
Revenue-Based Award Programs
In revenue-based award programs, the award ticket cost is directly related to the cash price of the ticket. As the cash price of the ticket increases, the number of points or miles needed to book the ticket will increase as well.
The U.S. carriers that use revenue programs are Southwest and JetBlue. It is most advantageous to book flights when prices are low, as low cash prices mean the amount of points needed to book the award will be low as well.
Unfortunately, this type of award system does not allow for spectacular redemption values, as far as cents per point calculations go. Within these revenue based award programs, the maximum value is generally between 1.3 and 1.7 cents per point.
However, these systems are generally free from “blackout dates”. If there is a seat available for purchase, you would be able to use your points or miles to purchase the seat.
For example, when booking a one way flight from Los Angeles (LAX) to Boston (BOS), the cash price on Southwest is between $137 and $359.