Airline Mileage Subscriptions: A Better Deal on Buying Points?

Just in case you didn’t already have enough monthly subscriptions in your life, it appears that more and more airlines are now looking to tap into that predictable stream of recurring monthly revenue.

As airlines continue to find new ways to monetize their loyalty programs, we’re seeing the introduction of an alternative to purchasing points outright in the form of monthly points and miles subscriptions.

While we generally do not recommend buying points and miles speculatively, especially on a recurring basis or prepaying in advance, a points or miles subscription could make sense in certain circumstances. These subscriptions may offer some value if you regularly purchase points, redeem them at a healthy pace, and have a clear plan for how you will use them.

Miles Subscriptions: What Are They?

At its core, a points and miles subscription works much like any other monthly subscription service. You pay a recurring monthly fee, and your account is credited with points or miles based on the subscription level you choose.

Rather than purchasing points or miles outright in a single large lump sum, these subscriptions provide a steady stream of points or miles in smaller amounts over an extended period of time.

Most programs offer a range of tiered subscription levels, starting at a low entry point and increasing based on how many points or miles you want to earn each month. The higher the subscription tier, the more points you receive and the lower the effective cost per point.

Along with the points or miles earned through a subscription, some programs offer additional incentives to encourage members to enroll in a monthly plan. These benefits may include quarterly bonus miles, extended mileage expiration, discounted redemptions, or qualifying activity toward elite status.

A Closer Look at Miles Subscription Plans

To get a better understanding of how miles subscription programs work, let’s take a closer look at a couple of the most popular programs in Canada offering monthly subscriptions. We’ll examine the inner workings of how these plans operate, including the cost of acquisition, any ancillary benefits, and the potential drawbacks and limitations of these types of subscriptions.

And finally, we’ll answer the question of whether miles and points subscriptions are actually a good deal.

Flying Blue Subscribe to Miles

Air France KLM Flying Blue is one of the most useful loyalty programs for booking economy and business class flights to and from Europe from many Canadian cities. Flying Blue miles can be earned in several ways, including directly through the program via the Brim Air France KLM World Elite Mastercard, by transferring points at a 1:1 ratio from American Express Membership Rewards, or by purchasing miles outright.

Flying Blue Subscribe to Miles offers four tiers of subscriptions (prices in USD) as follows:

• Starter: 2,000 miles/month for $34.20 (1.71 cents per mile)
  
• Smart: 5,000 miles/month for $79.00 (1.58 cents per mile)
  
• Advanced: 10,000 miles/month for $146.00 (1.46 cents per mile)
  
• Complete: 17,000 miles/month for $227.80 (1.34 cents per mile)

All charges for Flying Blue’s Subscribe to Miles program are processed through Points.com, which means Canadian credit cards will incur applicable taxes. To avoid these additional fees, you can use a U.S. credit card with a U.S. billing address if you have access to one.

Some key terms to be aware of when signing up for Flying Blue Subscribe to Miles are:

• A minimum 3-month commitment applies to all plans (this is common across most points and miles subscriptions).
  
• You are entitled to a 14-day cooling off period from the date of your initial subscription purchase, during which you may cancel your subscription for a full refund, provided none of the miles deposited into your account have been used.
  
• Miles will not expire as long as a subscription remains active.

Flying Blue advertises its Subscribe to Miles program as offering the best value for miles earned each month, which, to an extent, is true depending on the plan you select.

Comparing the outright purchase of points with a subscription plan can help clarify whether points and miles subscriptions make sense. If you were to purchase the maximum allowable amount of Flying Blue miles without any discounts or promotions, you could buy 100,000 miles for US$3,050, resulting in an acquisition cost of 3.05 cents per mile. This is obviously poor value, and the primary reason we recommend only purchasing points when a bonus promotion is available.

Using Flying Blue’s most recent 80% bonus purchase promotion as a benchmark, the acquisition cost drops to 1.69 cents per mile (USD). While this represents a meaningful improvement, it also shows that subscribing to any tier above the entry level Subscribe to Miles plan provides a more favorable cost per mile, without the need to rely on any periodic bonus purchase promotions.

As an example of an optimal use case for a Flying Blue Subscribe to Miles plan, subscribing to the top tier Complete plan for three months would earn 51,000 Flying Blue miles at a cost of US$683.40. Applying those miles toward a 45,000-mile Promo Rewards business class redemption from Montreal (YUL) to Paris (CDG) could result in significant savings compared to purchasing a business class ticket outright.

You would effectively be paying under CA$1,000 plus taxes and fees for a one-way business class flight to Europe on an itinerary that would typically cost at least $5,000 round trip.

However, it’s important to note that this represents a best-case scenario, requiring several factors to fall in your favor to take advantage of such an opportunity. As we will discuss later, this also highlights one of the key pitfalls of purchasing points and miles speculatively. If you’ve been involved in points and miles for a while, you probably know that many factors are beyond our control, and things rarely go exactly as planned.

British Airways Avios Subscription

One of the pioneers of points and miles subscriptions is British Airways Avios, which, to the best of my knowledge, was among the first programs to introduce a mileage subscription. As with most points and miles subscriptions, this option allows members to steadily build their Avios balance at a better rate than purchasing points outright.

A common trend across loyalty program subscription plans is the push toward higher tier plans and longer commitment periods. Programs incentivize these options by offering a lower effective cost per point, encouraging members to subscribe to the most expensive package for the longest possible term.

As shown in the images below, British Airways includes the effective earning rate for each plan, with higher tiers earning more Avios per dollar spent.

This is especially apparent with British Airways, which offers four subscription tiers, and also allows members to choose between monthly or annually billed plans. Do note that all British Airways Avios accounts registered in Canada will have points purchases and subscriptions processed in U.S. dollars.

As expected, committing to the annual plan provides the best value in terms of cost per mile, as you effectively pay for only 10 months when signing up for a 12-month subscription. At the lower end, the least expensive annual plan results in an acquisition cost of 1.69 cents per point, while the highest tier reduces the cost to 1.29 cents per point.

The monthly plan naturally results in a higher acquisition cost overall. However, one of the main advantages of the monthly subscription model is the lower upfront cost, which may be more appealing to some people who may not be comfortable paying a large lump sum all at once on a yearly plan. It also offers greater flexibility, as you can cancel a monthly subscription if circumstances change, whereas an annual plan locks you in and leaves you more exposed to potential devaluations. Do note that, as with Flying Blue Subscribe to Miles, a British Airways Avios Subscription also requires a 3-month commitment.

We know that purchasing points outright when no promotion is active is poor value, so instead we will look at what British Airways has historically offered during purchase promotions. In this case, British Airways has previously offered a periodic 40% bonus promotion on Avios purchases.

Even so, this still doesn’t represent a particularly good deal, as buying points at the most favorable rate results in an acquisition cost of 1.64 cents per point, which isn’t tremendously compelling.

Another important point to keep in mind is that if you are simply looking to acquire Avios points, there are multiple versions of Avios issued by seven different airlines that use the Avios currency. All of these programs allow Avios points to be freely transferred between participating airlines.

Because of this, you can purchase Avios from whichever airline is offering the best purchase rate and then transfer the points to your preferred Avios program. For example, Qatar Airways frequently offers purchase bonuses in the range of 65% to 70%, so you have the option of shopping around when it comes to purchasing Avios.

Are Points and Miles Subscriptions Worth It?

Airlines have done their part in making miles subscriptions appealing, often advertising the lowest available cost per mile and a very low barrier to entry – sometimes as little as $10 per month. However, the best pricing is usually locked behind paying for an entire year upfront, which exposes members to significant devaluation risk. On top of that, the entire balance of the subscription will not be delivered until twelve months have elapsed, when travel priorities may no longer be the same.

Most frequent-flyer programs now use some form of dynamic pricing and no longer publish award charts, meaning that just one month after purchasing an annual subscription, the program could introduce negative changes. The result is that you may find yourself having prepaid for miles that are suddenly worth far less than expected.

Despite the higher acquisition cost, the landscape is somewhat better with month-to-month payments, as they at least provide an exit if a program deteriorates. However, some programs require a three-month minimum commitment, leaving less flexibility if things go south.

All that said, value can still be found in these subscriptions, particularly for those looking to engage with a program and earn miles at a steady pace. For some, paying a smaller monthly fee for a modest number of miles may be more appealing than committing to a large payment upfront. However, simply buying the miles if you need them in a pinch for an immediate redemption is likely to remain the prevailing wisdom. Ultimately, to make these subscriptions worthwhile, it’s essential to maximize the sweet spots within the program you choose and redeem those points at a rate sufficient to ensure a program devaluation won’t devastate the value of a large pool of miles.

In the end, I think it’s best to view these subscription models as a supplementary avenue for earning a stream of points over the long term. The most effective approach has always been earning welcome bonuses on cards that issue transferable points currencies, which are a far more flexible, faster, and cost-effective way to accumulate points and miles.

Airline Programs That Offer A Monthly Miles Subscription

Below is a list of airlines and loyalty programs that currently offer a monthly miles or points subscription. Many of these programs charge members based in North America in U.S. dollars, so all figures have been converted to USD for easier comparison. Due to currency fluctuations, some figures may not be exact, but they should provide a reasonable estimate to help assess the overall value of each subscription.

Furthermore, it’s worth repeating that most airline subscription plans are administered by Points.com, which means taxes will be applied if you pay with a credit card that has a Canadian billing address.

Some programs offer escalating quarterly bonuses or a signing bonus as an incentive for maintaining a longer-term subscription, which effectively lowers the cost per mile. Therefore, the cost-per-mile calculations below factor in any quarterly bonuses or signing bonuses earned over a 12-month period.

I’ve done my best to identify all major airlines that offer a subscription program, but I can’t say for certain that this list is exhaustive. If I’ve missed any, feel free to let me know in the comments below.

Conclusion

Monthly subscriptions are invading every product and service in our daily lives, and airlines are now getting in on the act.

While these subscriptions can provide some of the lowest costs for purchasing points, the best pricing usually requires paying for a full year upfront. However, this results in the full allotment of miles not being credited until twelve months later, which limits the usefulness of a subscription for near-term redemptions.

In a world of seemingly endless program devaluations, committing to these subscriptions carry significant risk. However, they can be very rewarding if you are comfortable with this risk and know how to take full advantage of a program’s sweet spots. Though all subscriptions should be considered a secondary source for acquiring miles and points, as credit card welcome bonuses continue to be the most cost-effective method.