How to Earn and Redeem Air New Zealand Airpoints

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Star Alliance member Air New Zealand runs the Airpoints loyalty program. The airline says more than 2,000 flights are booked everyday utilizing Airpoints — a number which at first glance is surprisingly large given the size of the carrier and program's reputation for not being very rewarding. Today, I'll lay out everything you need to know about Airpoints to see if it's worthy of a place in your award travel strategy.

Earning Airpoints

For North Americans, the easiest way to earn Airpoints (other than flying paid Air New Zealand fares) is to transfer Starpoints earned from the Starwood Preferred Guest® Credit Card from American Express and hotel stays at a 65:1 ratio. As we'll discuss in a moment, even though an Airpoint's face value is more than most airline miles, that poor ratio may dissuade you from moving Starpoints to the program right off the bat.

Direct earn rates from SPG and other North American partners include:

To figure out how many Airpoints you'll earn on a paid ticket, you need to use the earning rates look-up table. I haven't cracked the code to figuring out what percentage back of the flight you earn in Airpoints, but it varies vastly dependent upon your booking fare and class of service. Here's an example of the Airpoints you'd earn on a LAX-AKL flight:

You won't earn Airpoints on Grabaseat Greenlight fares (booking class F is used for Grabaseat Greenlight fares available through grabaseat.co.nz) or redemption tickets.

Earning rates for partner flights are based on the distance of the flight and class of service. On United domestic flights, the earning rates table says you'll earn as many as 86 Airpoints per flight.

Using Airpoints

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The first thing most loyalty enthusiasts want to know when looking at a program is what the points/miles are worth. At face value, this is a simple program. Airpoints are often called Airpoint Dollars (APD) because 1 point is equivalent to 1 New Zealand dollar in purchasing power. You can use Airpoints at a 1:NZ$1 ratio toward paid Air New Zealand flights, upgrades, companion tickets, ancillary fees, hotels, rental cars, travel insurance, Air New Zealand merchandise and Air New Zealand wine.

What makes Airpoints an immediate disappointment are the fees the program charges almost any time you want to use your points. Air New Zealand was nice enough to put together a program fee chart that lays out the bad news. You'll pay anywhere between NZ$25 and NZ$100 if you want to use your points for a non-flight redemption; add a family member to your household account; or change a ticket. What really hurts is having to pay NZ$100 (~$72) to book any Star Alliance or partner airline award ticket. That's on top of significant fuel surcharges and other taxes already charged on a partner award ticket.

Most Airpoints members use points to subsidize their travel and cover ancillary fees to avoid extra charges. If a seat assignment costs $5, you can use 5 Airpoints to cover it. Note that you can only use Airpoints Dollars to cover seat selection when you book through the Australia or New Zealand websites. If you place a successful Oneup upgrade bid, you can select to pay with Airpoint Dollars. Using Airpoints to pay for upgrades, merchandise and ancillary fees is straightforward, but there's a catch when paying for airfare: You'll still have to pay the "taxes, levies, surcharges and service fees" portion of any international Air New Zealand ticket with cash. If a paid fare is $1,000 and $200 of that is taxes and fees, you can use 800 Airpoints for the ticket but must still pay $200 cash.

You can also use Airpoints to subsidize the cost of a traveling companion. Look at the Airpoints Companion Ticket Chart to see how many Airpoints you will need for your companion to fly with you. Remember that you'll also have to pay taxes, levies, and surcharges and a service fee of between NZ$35-NZ$60 with cash on each of these tickets. I don't see any particularly great deals when looking at the companion ticket chart for two reasons:

1. I know I can use 1 Airpoint as $1 toward paid airfare, and the chart doesn't appear any cheaper than paying for a ticket on most routes.
2. The taxes, levies, surcharges and service fees for my companion can be substantial on the international flights, meaning I may be better off booking a straight award flight depending on the fare.

Since 1 Airport equals 1 New Zealand dollar, one redemption isn't a better value than any other, whether you're using your points toward paid Air New Zealand airfare, upgrades or ancillary fees. You can use your balance as you see fit to subsidize your travel costs. While this means there aren't any "sweet spots," it also means you don't have to worry about award seat availability and can travel when you like as long as the asking price is acceptable to you.

Using Airpoints for Partner Flights

The one hope I had for finding substantial value in the Airpoints program lied in the ability to use rewards to book award tickets on Star Alliance and other airline partners. There's an airline partner award chart that shows you how many Airpoints you need to fly one-way, per sector, on Star Alliance carriers as well as Cathay Pacific, Etihad, Jet Airways, Virgin Atlantic and Virgin Australia.

Analyzing the partner airline award chart, I looked at the cost in terms of how many Starpoints I'd need to transfer. For example, North America to Europe in economy one-way is 565 Airpoints, or 31,720 Starpoints (after the ~77-Airpoint bonus for transferring 20,000 points) Starpoints. There are several other SPG transfer partners I could utilize to travel to Europe for far fewer Starpoints and not have to pay a NZ$100 service charge. The real pain here is that Air New Zealand says "the (partner) chart is to be applied to every sector of a partner itinerary." That means for each leg in an itinerary, you have to pay an additional price. If you fly ATL-EWR-FRA you're going to pay 200 Airpoints for ATL-EWR and 565 Airpoints for EWR-FRA. Ouch.

Studying the chart, I don't see any prices low enough to warrant a good deal and that would be worth converting Starpoints to Airpoints to book a ticket and pay the fees.

Bottom Line

Why is Airpoints an often overlooked loyalty program? Mainly because there are far too many other SPG transfer partners that offer better value, and the opportunity cost of crediting paid United or other Star Alliance flights to the program is too high. The lack of avenues to earn points wouldn't be a huge issue if it was the only factor, but add in the 65:1 SPG transfer ratio, the poor partner airline award chart and the very high taxes, surcharges, levies and service fees the program requires and it means there's little value to be had.

South Pacific residents themselves aren't thrilled with the program, mainly because of the incessant fees the program charges to do most anything with your points. If you fly a paid Air New Zealand ticket, check WheretoCredit.com and see which partner airline program will offer the best return.

Have you found value in Air New Zealand's Airpoints program?