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Taking Advantage of Fifth Freedoms

By March 25, 2013 December 10th, 2013 No Comments

For anyone that has tried to redeem miles to Europe during the Summer, you know what a huge pain it can be because there is such limited Award availability!

This past weekend I was trying to help a Friend use United Miles to get to Barcelona in August and unfortunately we ran into that exact problem.

While there was quite a bit of availability going to Barcelona (just as long as it wasn’t a Friday), coming back to Chicago was a different story.

Without any Award availability on United, it looked like the only option would be to buy a Revenue Ticket.

While tickets to Europe can be reasonable during the Winter off season, during the Summer the prices for Economy tickets go thru the roof due to high demand.

The cheapest flight on Kayak that didn’t involve 20+ hours in transit was a whopping $1,479 for an Economy ticket!

While I am normally pretty good at finding solutions to sticky situations like this, with no Award Availability or a $1,500 Revenue Ticket, it seemed like my Friend had reached a dead end…

Fifth Freedoms

While the situation looked dire, in a twist of fate, my Friend somehow inadvertently came across a “Fifth Freedom” route.

For those of you not familiar, a Fifth Freedom is where an Airline not based in the Country they are serving, flies Passengers as part of a connecting flight. You typically find these Fifth Freedoms on long Asian routes.

In this case, my Friend found a flight on Pakistan Airlines that goes from Chicago -> Barcelona -> Lahore.

Lucky had actually posted a thing about Pakistan Airlines and Fifth Freedoms earlier this month, but I had completely forgot about it until my Friend found the Pakistan Airlines fare.

As Lucky talked about in his post, some other Fifth Freedom Routes include:

In the case of the Pakistan Airlines fare, it was only $888 dollars roundtrip and non-stop!

The thing I found most surprising was that Business Class on Pakistan Airways was cheaper than an Economy ticket on most of the other Airlines, not to mention they are flying a 777 on the route!

Getting Reimbursed With Credit Cards

While $888 for a round trip ticket to Europe is certainly a better deal than spending $1,497, at the end of the day it is still $888 that is coming out of your pocket.

To cut that $888 down, there are 2 easy options:

1. One Way Award + One Way Revenue Ticket

Since there was Award Availability on United going to Barcelona, my Friend could burn 30,000 United Miles on a one way ticket and then spend $474 on the Return Flight via Pakistan Airlines.

So instead of spending $888, she would only spend 30,000 United Miles & $474 out of pocket which is not as terrible!

2. Sign Up For Chase Sapphire Preferred

When most people think of the Chase Sapphire Preferred, they think of it as an easy way to get Ultimate Rewards Points to transfer to United, Hyatt, Southwest, British Airways, etc.

I’d guess that is what 95% of Sapphire Preferred Cardholders use it for and that can be a great deal, however in the above case, there isn’t any availability for Award Tickets.

As I have talked about in the past, with the Chase Sapphire Preferred, you can ALSO use your Ultimate Rewards Points to get “reimbursed” at 1 Cent per a Point for travel purchases. If you purchase your Ticket via the Ultimate Rewards Portal, you can even get a 20% bonus or 1.2 Cents per a Point!

Link To Chase Sapphire Preferred

In my friend’s case, if she was to sign up for the Chase Sapphire Preferred, she could redeem 30,000 Miles for the ORD-BCN leg, and then charge the $474 Pakistan Airlines BCN-ORD ticket to her Chase Sapphire Preferred. By redeeming 47,400 Ultimate Rewards Points via reimbursement, it would save her $474 in out of pocket expenses.

Another option would be to save her 60,000 United Miles and just charge the entire $888 round trip Pakistan Airline ticket to her Chase Sapphire Preferred. She could then redeem her 50,000 Ultimate Rewards for $500 in reimbursement, thus cutting her out of pocket costs from $888 to only $388. What is nice about this option is that the $888 she will be spending on the ticket also counts towards the $3,000 minimum spend requirement!

Although reimbursement doesn’t necessarily offer the best “value”, as compared to transferring the Points over to United, at the end of the day getting reimbursed helps cut the cost of your out of pocket expenses substantially. In the example above, redeeming Miles for an Award Ticket wasn’t really an option, so reimbursement was probably the best bet.

Recap

Although I never would have thought to look for a flight to Barcelona on Pakistan Airlines, it turned out to be the quickest and cheapest way to get to there!

Not only will Pakistan Airlines save my friend around $600 compared to if she had to buy the $1,479 United Revenue ticket, but Pakistan Airlines is the only Airline that flies directly to Barcelona from Chicago (crazy I know!), so it will save my Friend from having to layover in Europe!

Although United Award availability was not exactly an option in this example, by getting a Chase Sapphire Preferred and using the reimbursement feature, my Friend could easily get to Spain during peak season for around $388 out of pocket instead of $1,479!

-Parag

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