How to Use American Airlines Business Extra Points for Free Flights
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American Airlines has a little-known business rewards program called Business Extra that lets businesses score points from booking their employees on American Airlines flights — while still letting the traveler earn miles on their flights. It’s a great double-dip program that every business should look into setting up.
We have covered the pros and cons of the Business Extra program and how to earn along with options for redeeming points. However, today we wanted to get into the nitty-gritty of how to actually redeem Business Extra points for a free flight.
Confession time: I hadn’t redeemed my Business Extra points since signing up for my account back in 2015, and I had around 8,600 points expiring December 31, 2018. With 12 days before the expiration date, it was time for me to act. Here’s what I learned:
Basics of Business Extra & Free Flights
Business Extra lets businesses earn 1 point per every $5 spent on eligible flights. These points can be redeemed for free flights, elite status, upgrades and Admirals Club membership or day passes.
Focusing on the free flight redemptions, there are two types of flight awards:
- American Airlines awards — limited to only AA-operated flights
- Partner Awards — require at least one segment on British Airways or Iberia
The Partner Awards are more expensive than American Airlines awards, and many Partner Awards are likely to incur a lot of extra taxes and fees. As a result, you’ll likely want to stick to American Airlines awards. The “PlanAhead” awards are equivalent to AAdvantage MileSAAver awards and price out as follows:
|Domestic (including transcon)||2,000||5,400||7,200|
|South America Zone 1||3,000||5,400||n/a|
|South America Zone 2||4,400||7,200||10,000|
|Japan, China, South Korea||4,400||7,200||10,000|
While this is unclear on Business Extra’s website, these prices are for a round-trip awards, not one-way. Award tickets must be issued by midnight one year from the original award redemption date, and then tickets issued are valid for one year from the ticket issue date. Theoretically, you can redeem points for an award on December 31, 2018 and wait until December 31, 2019 to redeem for a ticket that would still be valid through December 31, 2020.
Business Extra awards use the same inventory as awards booked using AAdvantage miles (T for economy, U for business and Z for first). That means that you can easily find out if an award is available or not just by searching for awards on AA’s website. Make sure that you limit your searches to only AA-operated flights for American Airlines Business Extra awards. Partner Awards require at least one segment on British Airways or Iberia.
There’s a points reinstatement fee of $150 if you want to cancel your award and redeposit the points into your Business Extra account. This fee is charged regardless of elite status. However, Executive Platinum and Concierge Key members are able to make free changes to their reservation — whether it’s date, routing or airport changes — as long as they stay in the same region as the Business Extra award. Non-elites and lower-tier elites are charged a $150 fee for making these changes.
Unfortunately, systemwide upgrades can’t be applied to Business Extra tickets. However, Executive Platinum and Concierge Key elites can get free 500-mile upgrades on eligible routes. In addition, an agent confirmed with me that EPs and CKs are eligible for day-of-departure upgrades based on load factors. That means that you could book an economy award and be bumped up to premium economy on certain international flights.
Redeeming Points for an Award
Once you have figured out where you want to fly, head to the awards redemption section of the Business Extra website. Select the region you want to redeem flights for and click Redeem Now for that type of award.
On the next page, choose how many awards you’d like to redeem. If you’re redeeming for multiple of the same type of award, note that this screen doesn’t subtotal the total number of points the award will cost.
Agree to the terms and conditions and click Confirm to process your redemption. You’ll receive a confirmation page with your confirmation number and authorization number(s).
Redeeming an Award for a Flight
Once you have redeemed your Business Extra points for an award voucher and have found availability online, you’ll need to call 1-800-433-1790 and then press 3 to get an agent to book your flight. The call center is open from Monday through Friday from 7:00am to 11:00pm CT and Saturday and Sunday from 7:00am to 8:00pm CT.
However, there’s a shortcut that you might want to consider before picking up the phone. When I called to book my award, the Business Extra agent wasn’t able to see the award availability that I saw on AA.com. However, I was able to hold the award reservation on AA’s website and give the agent the record locator to take over the award and ticket it using the Business Extra awards. This also saved the hassle of having to provide traveler information over the phone.
The final step was for me to provide the agent the authorization numbers from my redemption confirmation for the agent to be able to ticket the request. It took less than an hour after her request for the award to be ticketed.
Value of Business Extra Points
One aspect of the Business Extra program that I haven’t seen many data points on is the value of these points. And the trouble is that there are so many options — both good and bad — for redeeming Business Extra points that it’s hard to pin down an estimate of the value. As a result, I made sure to see how much these points saved me for this redemption.
At the time I booked my award, the cheapest one-stop itineraries from Atlanta (ATL) to Sydney (SYD) on the dates I’m traveling cost $1,030 per person. Booking this round-trip with Business Extra cost 4,400 points plus $116 in taxes/fees round-trip. That means I got around 20.8 cents of value from each of these Business Extra points. And considering that points are earned at a rate of 1 point per $5 spent on airfare and carrier imposed surcharges, that translates to a 4.15% return on this spending. Not a bad return for a double-dip program.
As a point of reference, the award I booked wouldn’t be a great redemption if I used AAdvantage miles. The round-trip itinerary would’ve cost 80,000 AAdvantage miles plus $116 in taxes. Compared to the $1,030 revenue price, that’s only 1.14 cents per mile of value. That’s pretty poor compared to TPG’s valuation of AAdvantage miles of 1.4 cents each.
That brings up one final aspect to keep in mind when considering how to redeem Business Extra points for free flights: the relative cost vs. AAdvantage miles. If you divide my above valuation of Business Extra points (20.8 cents) by TPG’s valuation of AAdvantage miles (1.4), you get ~14.87. This is a ballpark estimate, indicating that 1 Business Extra point is equivalent to roughly 15 AAdvantage miles. As a result, you should consider redeeming Business Extra points when you’d have to use more than 15 miles per point for the award ticket. If the AAdvantage award ticket would require less than 15 miles per Business Extra point, you’d be better off using miles (though again, this is simply an estimate).
Put another way, ask yourself this question: how many AAdvantage miles am I keeping in my account for every Business Extra point I redeem? If the answer is more than 15, use Business Extra points. If the answer is less than 15, use AAdvantage miles.
Here’s a comparison of the two, and pay special attention to the rightmost column and how it compares to the break-even mark of 15 miles per point:
|South America Zone 1||Economy||40,000||3,000||13.3|
|Europe and South America Zone 2||Economy||60,000||4,400||13.6|
|Japan, China, South Korea||Economy||70,000||4,400||15.9|
|Domestic including transcon||Business||65,000||5,400||12.0|
|South America Zone 1||Business||60,000||5,400||11.1|
|Europe and South America Zone 2||Business||115,000||7,200||16.0|
|Japan, China, South Korea||Business||120,000||7,200||16.7|
|Europe and South America Zone 2||First||170,000||10,000||17.0|
|Japan, China, South Korea||First||160,000||10,000||16.0|
*AAdvantage award prices are listed from the MileSAAver award chart as of January 16, 2019 — ignoring Off-Peak pricing. Domestic American flights under 500 miles in distance cost 15,000 miles at the saver level. Some Shuttle flights may cost 12,500 AAdvantage miles each way in economy or 25,000 each way in business class. Business class AAdvantage awards to Hawaii in lie-flat seats will cost 7,500 more than the price shown above.
Again, for redemptions with a higher miles per point ratio, you’ll want to use Business Extra awards. For example, my South Pacific economy award is one of the best options (comparatively speaking), since AAdvantage awards cost 80,000 miles round-trip vs. just 4,400 points. This award option is keeping 18.2 AAdvantage miles in your account for every Business Extra point you redeem.
However, you’ll want to use AAdvantage miles instead for Central America awards in business class, since miles will stretch much further than points. These flights cost 50,000 miles round-trip or 5,400 points — meaning your points are saving you just 9.3 AAdvantage miles each.
No matter how you end up using Business Extra points, make sure that your business is earning these valuable points and staying on top of when they expire. While there’s some value in redeeming smaller amounts of points for club day passes or upgrades, free flights can provide a substantial savings for a small business. I hope this post helped show you how to do so.
To read more about American Airlines Business Extra, check out:
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