Simeoni Christmas Newsletter
03rd Dec 2019Paul’s Introduction
With another year almost at an end, we have a tendency to look back on the past 12 months and it seems in my experience that life gets quicker the older we get.
At times we need to stop, reflect and appreciate what we have in life and Christmas time is usually a good time to do this.
I was recently signing a birthday card to our oldest client Violet who has turned 106 this year. What a wonderful achievement! When Violet was born the 1st World War hadn’t started, the first flight by the Wright brothers happened only 10 years earlier. The amount of change in Violet’s life time has never before been achieved in human history.
This Christmas newsletter goes through my usual predictions, but we also look at resolving a number of myths about the value of frequent flyers rewards.
The team at Simeoni would also like to take the opportunity to thank our wonderful clients on another great year. It makes working so much better when we have great people as clients, we appreciate your constant support.
I would also like to thank our magnificent team at Simeoni who are a joy to work with and are constantly dedicated to clients’ needs.
We wish everyone a wonderful Christmas and New Year and we look forward to catching up in 2020.
Enjoy the newsletter!
Paul’s Fearless Predictions for 2020…
My 2019 results of 4 ½ out of 10 is about average but I will be better focused with my predictions for 2020 which are:
| 1) Liverpool will win the first English Premier League (Liverpool fans will be unbearable) |
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2) Australia will win at least 12 gold medals at the 2020 Tokyo Olympics |
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3) The Federal Budget will finally record a surplus |
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4) Sydney house prices to increase by less than 5% |
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5) Donald Trump will win the USA 2020 presidential Election |
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6) The RBA will reduce interest rates at least once in 2020 |
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7) Tesla shares price will collapse to $0 (or close to it) |
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8) Meghan the Duchess of Sussex will be pregnant in 2020 |
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9) China will land a spacecraft on the moon |
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10) Australia will win the 2020 T20 World Cup |
Paul’s Prediction Results for 2019 are…
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1) Unfortunately New Zealand will win the 2019 Rugby World Cup. |
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Not definitive
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How to get Maximum Value from Frequent Flyer points
With the holidays arriving, I am often asked how to use frequent flyer points more effectively.
We have researched this topic and have come up with the following areas:
- Do I get more value in purchasing products / services or use points for flight rewards?
- Do I get more value using frequent flyer points for economy travel, business travel or first class travel?
- Are round the world trips better value than single destination return trips?
Products v Flights
Based on research conducted by Iflyflat.com.au & point hacks.
“Redeeming points on products generally aren’t good value compared with flights, especially long-haul international flights in premium cabins,”
“You should be looking for at least 2 cents per dollar for an ideal redemption value and this isn’t something you are likely to get with products. Most of them fall between 0.4 to 0.8 cents, while flights are between 1.5 and 14 cents per point.”
DON’T UPGRADE
“It’s common to think that upgrades are cheap, but they’re not,”.
“It’s normally the same as buying business class outright and upgrades are basically a waiting list.”
NEVER USE POINTS TO PAY EXTRAS
Airport charges, taxes and other costs can also be covered by frequent flyer points, but this strategy is an expensive way to waste frequent flyer points.
“The value of a point for this is around 0.5c, compared with 1.3c when using classic rewards.”
Fly Economy v Business v First Class
The Maths
Airlines charge anywhere north of 7 times the cost of an Economy ticket for a First Class seat on the same flight. It’s 4-5x for Business Class, and 2x for travel in Premium Economy.
The basic premise that points get so much more valuable for Premium Economy, Business or First Class redemptions is simply because the cost in points of these trips is a lot lower. It’s more like 3x the cost of an Economy ticket for First Class, 2x for Business, and 1.5x for Premium Economy.
Here’s our real-life example of flying Emirates from Sydney to London return during low-season dates:
| abin | In cash | Compared to Economy | With points | Compared to Economy |
| Economy | $1,318 | 1x | 120,000 | 1x |
| Business | $7,535 | 5.7x | 256,000 | 2.1x |
| First | $15,185 | 11.5x | 384,000 | 3.2x |
Therefore it costs 3.2 times more points to travel First class with points compared with 11.5 times if you paid cash. This is a similar result for Business.
It shows you get better value for Business and First class rather than Economy.
3. Round the World (RTW) v Return Flights
A RTW itinerary booked as a oneworld Classic Flight Reward is one of the best ways to maximise the value of your Points.
| Cabin | Melbourne to London return on Qantas or Emirates | Melbourne to London return on Qatar Airways | oneworld Classic Flight Reward |
| Economy | 110,400 | 132,400 | 132,400 |
| Premium Economy | 216,800 | 249,600 | 249,600 |
| Business Class | 289,200 | 318,000 | 318,000 |
| First Class | 433,800 | 455,000 | 455,000 |
| Miles travelled | 21,007 | 21,007 | Up to 35,000 |
Based on the above table, you could fly almost double the distance (up to 35,000 miles) and have stopovers in five cities for the same price as flying on the latter combination of airlines (Qatar Airways, etc).
Summary
The most efficient way to use your frequent flyer rewards are:
– Most value is for First class, then Business and last for Economy flights.
– The best value for flights is for round the world (RTW) flights
