💡 tl;dr – A helpful reminder purchasing the cheapest fully refundable fare can be a useful ‘hedge’ as you wait out premium cabin award availability. Doing so will allow you to continue making other travel arrangements. Budget carriers often offer the lowest fully refundable fare for a route. However, legacy carriers might offer a better alternative at a slightly more expensive price.
Introduction
Every traveler who loves points and miles will, at some point, experience the dreaded ‘no-vacancy’ frustration. You’ve amassed all the points you need for a fantastic airfare redemption only to find no availability. To make matters worse, you have other plans and bookings you need to make that are contingent upon you locking down that plane ticket. You’re in a pickle – there’s an excellent chance availability will open up closer to the departure date, but you’re under pressure to solidify other bookings now. What you need is to buy yourself more time.
The solution – hedge. It’s a simple concept: you purchase the cheapest fully refundable (this part is crucial) ticket available for a route you are going to fly. This provides you with an “if nothing else” placeholder flight, removing the crippling uncertainty, and enabling you to continue planning other elements of your trip…all while you await the (hopeful) availability of a premium cabin award fare. Simple? Yes…but I can’t tell you how many times I’ve seen even the most seasoned travelers overlook this option when waiting for award availability.
Why do this? Because life isn’t always as neat as we want it to be. You might have hotel rooms to book, reservations to snag, tours to reserve, and RSVPs to confirm. And if you’re anything like me – a happy counselor firmly entrenched in the no-risk-it-no-biscuit camp – you’re willing to wait for premium cabin availability down to the last minute. And if that award availability never comes around? Well, hedging now will help maintain the structure of the rest of your trip, and set you up for success, no matter how things shake out.
Key Logistics
1) The fare you purchase must be 100% fully refundable. Most commonly, the fare selection page during the booking process specifies the refund terms. You’ll also want to review the carrier’s conditions of carriage to confirm their refund policy.
2) Stick with nonstop/direct fares so as to avoid adding unnecessary complexity. (The example laid out below only lists carriers offering non-stop/direct routes.)
3) Book directly with the carrier. Travel search engines (Priceline, Kayak, Expedia) and bank travel portals (Chase, Amex, Capital One) may have their own cancellation policies complicating your ability to cancel with no penalty.
Hedge with Budget Carriers, if possible
Budget carriers are great options from which to purchase your hedge fare. I know what you’re thinking. Every seasoned traveler has their own war story, be it positive or negative, about flying a budget airline. Perhaps you’ve caught up with a friend and reminisced over €15 no-frills RyanAir fares that enabled your multi-city meet-ups during your study abroad days in college. Scoot and Peach held you down when you only had $220 and a pack of Trident to get from Sapporo to Perth. They were there for you when no one else was. Maybe you recently found a photo of you and your ex at the Blue Lagoon in Iceland, made possible by a $99 WowAir scoop. And possibly, when you bent over to pick that photo out of the drawer, you exacerbated your lower back mice, a pain reminiscent of your cozy middle seat on Spirit Airlines’ “Cancun Express.” Hey, you just needed to get there! Whatever the case may be, it’s safe to say that most folks have, at the very minimum, searched and sourced results for a curiously inexpensive, no-frills fare, on a route of interest.
So why the budget airline, as opposed to a legacy carrier? Because you’re aiming for the minimum expenditure that gets the job done. It’s a balancing act – you want to tie up as little valuable resources (cash) as possible to secure a confirmed ticket, while also maximizing your flexibility. I’ve often found two things to be true about fully refundable fares on budget carriers in a competitive market: 1) they are cheaper than those of legacy carriers, and 2) they come bundled with many of the add-ons you’d otherwise have to purchase separately on for the bargain- basement no-frills fare.
Well, what if the fully refundable fares on a legacy carrier price out lower than the budget carrier? Then, by all means, choose the carrier that’s most comfortable for you!
What about holding a reservation on a legacy carrier with points? That’s certainly an option but comes with a few considerations. First, some carriers (though not all) charge fees to change or refund award fares (Air France is one example). Second, if you only have enough miles stashed for the same premium cabin redemption you’re waiting on, then logistically it may not make sense to tie those points up. You may need to strike quickly!
Let’s run through a scenario where this might work:
***For this example, I’m writing from the perspective of someone who doesn’t hold meaningful airline status with a specific carrier/alliance and isn’t concentrating on chasing or accumulating miles for a greater aim.***
You just received a delightful email from Osteria Francescana in Modena congratulating you for getting off the waitlist. Dope. This will be the perfect commemoration of you and your partner’s 10th anniversary. You start to scheme…fly into Milan, enjoy some time in the city, then Frecciarossa your way to Bologna a day or two before your reservation. From what you recall, Emirates operated a fifth freedom flight from JFK to MXP. Lay-flat business class on the Gulf carrier would make this trip even more memorable! You’ve got the miles, but darn – there’s no availability. A search on Google Flights delivers the following results:
This is a pretty competitive route. For your prospective date, you’re seeing options to fly on Emirates, Delta, and AA. And some rogue carrier named Neos Air? Emirates is fresh in your mind so you start there. The cheapest economy tickets price out at $675, but there’s a $200 fee for any changes or cancellations. Not fully refundable. For a fully refundable fare?…you’ll need to fork over $1425!
The fully refundable Emirates fare will set you back quite a bit.
Ok – let’s consider Delta. Looks like you can buy this ticket through both Delta and KLM, and either way you run it – it’ll be $818 to lock down a fully refundable ticket. That’s an improvement. What about AA?
Delta and KLM fully refundable fares price out at $818
Similarly, the AA flight is also a codeshare – with Iberia and Finnair – each of which is charging $780 for a fully refundable fare. A new leader in the clubhouse.
AA, IBERIA, FINNAIR, will cost $780
But what about that random airline – Neos Air, was it?… $610! You’ve found your hedge flight.
At the minimum, you’re saving $172 off the next cheapest fare here. $172 which you can put towards reservations, other bookings for your trip – really anything. Why pay more for a flight you may never take?
Break out that Amex Platinum earning you (a possibly temporary) 5X rewards, book the flight, then navigate to seats.aero and set an alert for the Emirates award space. Pat yourself on the back. A job well done.
Alert! We’ve found availability for your award…What now?
Huzzah! Your patience paid off – premium cabin award availability came available. Redeem those miles and snap up your hearty fare. You’re looking forward to kicking back, laying flat on your way to Milan. You can taste the Franciacorta already. But what to do with your hedge booking?
Cancel your ticket and have your money refunded back to your original form of payment. Then go on with your day. Book an appointment to see Cenacolo Vinciano, I suppose?
Alas, the best-laid plans don’t always work out. If you’ve waited it out as long as possible and your departure date is imminent but still no open awards, you can either fly with the budget carrier or switch to a legacy carrier. Here are some to-dos/things to consider:
- Re-shop the pricing for all fares. Fire up Google Flights and see what the current prices for all tickets are.
- Nonrefundable fares are now on the table, so take a peek at those options since you now know you’ll be flying. When reviewing pricing for the budget carrier, be sure to factor in any of the add-ons you need (carry-on bag, seat selection, meals, checked bags).
- Investigate the flight times (departure/arrival), current flight capacity, and frequency at which the flight is offered (daily, 3X a week, etc.) for all carriers in the event of a cancellation/rebooking, etc. Again, this doesn’t consider the goals of folks who hold or are trying to achieve status, so carriers or alliance-specific lounges that could enhance the traveler experience isn’t a thing.
- Finally, if the flight you’re most satisfied with is cheaper than the hedged reservation, grab the new, cheaper fare and cancel your original hedged flight reservation for a full refund. Conversely, if you’re better off sticking with the fare you originally booked, then you’re set. Get comfortable!
So…who might hedging not be for?
The ultra-planners and the “We’ll…I’d never” crowd. If every aspect of your trip needs to be booked and confirmed months out exactly how you want it, with no room for shifts, this is probably not your jam. Separately, if you’d simply never fly a budget airline, then this will not be for you either.
For anyone else searching for a way to sure-up your travel plans while you await award availability, remember that fully refundable budget fares are a great hedge!
