Steve Hui runs iFlyFlat.com.au. What he doesn't know about frequent flyer points probably isn't worth knowing.
Ever wondered how to fly first class? To find out, I sat down for a coffee to interview frequent flyer points expert, Steve Hui of iFLYflat . In this interview I ask Steve about his unique perspective on travelling in style using frequent flyer points.
Q: Tell us a bit about yourself and why you decided to start iFlyflat
iFLYflat was started from my frustration of hearing stories about people redeeming their hard earned points for normal everyday products.
The trigger was when I heard about someone from my prior work had redeemed over 100,000 points for an iPad (valued at approx. $1,000), and I thought that was a tremendous loss of opportunity and was poor value. Whereas those same number of points could have been used towards a one-way business class ticket to London, or a return business class ticket to Hong Kong, valued at more than $5,000.
Additionally, I had grown a love of business travel from a number of work trips I had taken, and thought that premium travel is the point of flying.
As an accountant, I always felt comfortable with numbers and dollars, and to me it always made sense to maximise the potential value of something. So this was the trigger which lead me to start iFLYflat, in order to help everyone to optimise their points to get more value out of them and to use them to experience something with wow factor, such as flying First or Business class. These are brilliant flying experiences which most people are not willing or cannot afford to fly if they were paying full price, but it is totally achievable with a structured plan.
Q: What do other first class passengers say when you tell them you’re flying for half price or free?
Actually this is a curly one, as most passengers don’t really like to talk while relaxing in the lounge or once on-board the plane. Though in a few instances I have struck up some very good and interesting conversations. I find conversations with travellers extremely interesting and makes you realise there is so much to see in our small world.
To come back to the question, I’ve seen there are three type of people who fly first class. First, there's the independently wealthy who are normally business owners. Then there are others who are also flying on points and thirdly there those who have been lucky to score an upgrade.
The reactions of the first type - they are very much interested to understand how my programs work out of interest, but ultimately they have successful businesses and want the total flexibility to be able to travel at a time of their choosing and the exact flights that suit their preferences, and have the financial means to achieve that.
As for the second group and third group – they are keen to learn about how they can fly first class more often, and with more certainty.
Q: We often read stories about how people need to spend $10,000’s per year on their rewards credit card in order to seek out enough for a ‘free’ flight. Is it really as bad as some people make it out to be? Is it too hard for the little guy to make points work?
When I read these stories - I think people are approaching it from the wrong way. People shouldn’t be trying to spend money to score a free flight out of it. It should be money they are already spending anyhow, and the free flight becomes the reward for earning points in the right places.
In my view, it is all about the maths and everyone is equal. It isn’t about the little guy or the big guy – if you spend the money on the right cards, your points will add up, and the reward can be redeemed. It might take a little longer if you are a low spender, but it will all still work out.
Also if they are low spenders, there is of course the annual fee to consider and a ‘break even point’ of where the reward benefit equals the cost of holding the card.
Q: Reality Check: $6,000 for a first-class seat is a huge saving compared to the $15k off-the-rack rate for some flights but it’s still a huge amount to spend. Who can afford to pay that?
Yes, I certainly agree that $6,000 is a significant amount of money. Even if we ignore the savings component when compared to the retail price of first and business class, it still works out to be less than double the cost of premium economy.
Currently my customer composition are split roughly, one-third small and medium business owners, one-third frequent flyers, and one-third corporate executives travelling once or twice a year for leisure.
A number of customers were already flying business class, paying upwards of $8,000 per trip. They can now have the opportunity to fly better and for cheaper.
Others who have travelled on business class for work, can now look forward to enjoying their whole holiday including the flight component when travelling for leisure, rather than dread the economy flight. They can now have the opportunity to experience the whole luxury of flying first class as a treat for their year’s work – which otherwise was totally outside their reasonable financial reach.
Q: Has the Qantas/Emirates partnership made it any cheaper or better for Aussies flying to Europe or the Middle East? Has the cost of flying business class or first class changed?
Overall, I think this is good for Australian travellers, this new partnership has enabled passengers to fly into their desired European destination directly (via Emirates). Previously Qantas European flight mostly had to fly into London, and then transit onto British Airways onto their destination. This will have saved time and expenses.
I’m not too sure on the impact on the retail prices for business or first class fares, as fundamentally, these prices are set based on market demands, the overall competition and the number of seats available on the route.
In terms of points, this has made it easier for Australians to try out the luxurious Emirates premium products using Qantas points, which should help lift up the standard across the industry.
Q: When we as Australians talk about credit cards with travel rewards our minds naturally jump to Qantas. Should people be paying any attention to the overseas programs such as Cathay AsiaMiles, Singapore Krisflyer or Malaysian Airlines etc?
The Qantas Points (referring to its new name) is the most popular program as Qantas is the dominant airline in Australia and also since Qantas has made it very easy to earn Qantas points, but it may not always be the best value.
Depending on where passengers are planning to fly, each airline have different sweet spots in terms of the number of points needed to fly, and also in terms of taxes and fuel charges payable. Additionally, different airlines may save extra frequent flyer seats for their own members, and provide less seats for their alliance members to book. Some examples:
- 1) Singapore Airlines KrisFlyer : They tend to reserve more seats for their members to book.
- 2) Cathay Pacific AsiaMiles : They charge approx. 33% less points to fly business class return to HK than if you use Qantas Points.
- 3) Malaysia Airlines Enrich : It is possible to fly business class to London for 102,000 points on Malaysia Airlines vs. 256,000 Qantas points for the same journey.
Thus it is smarter to structure the ability to earn points towards programs which might have more seats and where it is more efficient to use their frequent flyer program to fly to those destinations.
Q: Which frequent flyer credit cards do you like at the moment and do you have any advice from the travel+points perspective as to how people can do a better job at choosing a points credit card?
At the moment in my wallet, my personal favourite frequent flyer credit cards are the AMEX Platinum Charge Card and the Woolworths Everyday Rewards MasterCard. But these suit my personal situation as I have good points balances across a number of frequent flyer programs.
People should choose a credit cards with a high points earn rate, and which can be transferred later at a reasonable ratio into multiple airline programs at a time of your choosing. This allows you to take advantage of any bonus airline offers (such as the recent 15% bonus for Virgin Velocity), allows you to transfer points to an airline which has a sweet spot to your destination and allows you to transfer points to an airline which has seats. All this can be pretty complex.
Q: I’ve heard that using points for upgrades is the best value, is that true?
Upgrades are indeed very good value, but what I don’t really like about upgrades is that it is more like a lottery. There are a few factors to consider:
- 1) You need to have a ticket with is upgradable, as discount tickets normally are not upgradeable. Only certain fare classes become eligible.
- 2) Seats need to available on that flight
- 3) Depending on how many other people have also requested an upgrade, then the airline will prioritise based on how many people in your travelling party, how much you paid for your ticket and finally your loyalty status levels.
Q: How much is one point worth, what should I redeem my points for?
Different frequent flyer programs have different relative values – think of them like different foreign exchange currencies.
The value of each point will depends on what you choose to redeem the points for, the return can be between 0.63 cents per point (if redeeming for gift vouchers or products) and up to 8 cents per point (if redeeming for First class flights).
I would always recommend people to save their points and redeem them for flying in First class, as that is an absolutely special experience that is worth waiting for, and that will be remembered.
Q: What’s the #1 tip you’d give to our readers to help them better earn and redeem their frequent flyer points?
I’ve actually got two tips for your readers, as they need to work together. Think of each point being worth at least one cent, and to think of all the opportunities where you can earn points, as every point counts in the end. And, ensure you pay off your credit card balance each month, otherwise the interest will negate all the points and the rewards you could earn.