How to Use American Airlines Business Extra Points for Free Flights
Business-owners: did you know that you can "double dip" on your employee travel? If not, you definitely need to look into airline loyalty programs for businesses. American Airlines' version is called Business Extra and it lets businesses score points from booking their employees on American Airlines flights — while still letting the traveler earn miles on their flights. Even if your business is small and/or doesn't fly a lot, it's a program that every business should look into setting up.
We have covered the pros and cons of the Business Extra program and how to earn along with options for redeeming points. However, today we wanted to get into the nitty-gritty of how to actually redeem Business Extra points for a free flight.
In 2015, I started a small side business and immediately jumped on the opportunity to start double-dipping. However, I hadn't redeemed a single Business Extra point from signing up for my account through December 2018. And with around 8,600 points expiring December 31, 2018, it was time for me to act. Here's what I learned:
Basics of Business Extra & Free Flights
Business Extra lets businesses earn 1 point per every $5 spent on eligible flights. These points can be redeemed for free flights, elite status, upgrades and Admirals Club membership or day passes.
Focusing on the free flight redemptions, there are two types of flight awards:
- American Airlines awards — limited to only AA-operated flights
- Partner Awards — require at least one segment on British Airways or Iberia
The Partner Awards are more expensive than American Airlines awards, and many Partner Awards are likely to incur a lot of extra taxes and fees. As a result, you'll likely want to stick to American Airlines awards. The "PlanAhead" awards are equivalent to AAdvantage MileSAAver awards and price out as follows:
|Domestic (including transcon)||2,000||5,400||7,200|
|South America Zone 1||3,000||5,400||n/a|
|South America Zone 2||4,400||7,200||10,000|
|Japan, China, South Korea||4,400||7,200||10,000|
While this is unclear on Business Extra's website, these prices are for a round-trip awards, not one-way.
There's a lot of dates to be wary of when using Business Extra. First, the points expire on the last day of the year three years after they are earned. And activity doesn't extend this expiration date. You can redeem the points for an award certificate specific for a region pairing (e.g. BX9B for a business class PlanAhead award between North America and South Pacific). Or, as of late April 2019, you can redeem points directly for flight awards through AA's new business website.
If you redeem points for an award certificate, you must redeem that certificate for an award ticket by midnight one year from the issuance of the certificate. Then tickets issued are valid for one year from the ticket issue date.
Theoretically, you can earn points on January 1, 2019, redeem points for an award certificate on December 31, 2022 and wait until December 31, 2023 to redeem the certificate for a ticket that would still be valid through December 31, 2024. But, remember that points and miles are a bad long-term investment. So, we recommend using your points once you have enough for a good redemption.
PlanAhead Business Extra awards use the same inventory as awards booked using AAdvantage miles (T for economy, U for business and Z for first). That means that you can easily find out if an award is available or not just by searching for awards on AA's website. While that's the easiest place for travelers used to search for awards on AA's website, you can now search for availability right on AA's business website.
To reduce taxes and fees, we recommend that you limit your searches to only AA-operated flights for American Airlines Business Extra awards. Partner Awards require at least one segment on British Airways or Iberia, and the surcharges can be steep on those airlines.
There's a points reinstatement fee of $150 if you want to cancel your award and redeposit the points into your Business Extra account. This fee is charged regardless of elite status. However, Executive Platinum and Concierge Key members are able to make free changes to their reservation — whether it's date, routing or airport changes — as long as they stay in the same region as the Business Extra award. Non-elites and lower-tier elites are charged a $150 fee for making these changes.
Unfortunately, systemwide upgrades can't be applied to Business Extra tickets. However, Executive Platinum and Concierge Key elites can get free 500-mile upgrades on eligible routes. In addition, an agent confirmed with me that EPs and CKs are eligible for day-of-departure upgrades based on load factors. That means that you could book an economy award and be bumped up to premium economy on certain international flights.
Redeeming Points for an Award Certificate
To see if you have enough points to redeem for where you want to fly, head to the awards redemption section of the Business Extra website. Select the region pairing you're considering to see the pricing for these awards. If you want to redeem points for an award certificate that can be used now, click "Redeem Now" to redeem points for that type of award.
This is your best bet if you have points that are expiring soon but you aren't ready to lock in dates or there's no availability. If you're seeing award availability and are ready to book flights, skip the rest of this process and jump down to the booking section.
On the next page, choose how many award certificates you'd like to redeem. If you're redeeming for multiple of the same type of award, note that this screen doesn't subtotal the total number of points the award will cost.
Agree to the terms and conditions and click Confirm to process your redemption. You'll receive a confirmation page with your confirmation number and authorization number(s).
Redeeming an Award for a Flight
The process of redeeming an award certificate for a flight used to be quite manual. You'd need to call a special American Airlines line to have an agent search, find and book award inventory. While that process is still available, travelers can now redeem award certificates online — or skip the award certificate process and redeem points for award flights right on the website.
To search for Business Extra award flights, enter your route and dates in these boxes and click search. Remember that Business Extra award prices are round-trip and you'll pay the full round-trip price for booking one-way.
You can limit the search results by airport, class of service, number of stops and airline (if applicable).
Once you confirm award availability and select your flights, you'll have the option to Book Now with either an award certificate that you've already redeemed points for or by using Business Extra points directly.
To redeem by phone, call 1-800-433-1790 and then press 3 to get an agent to book your flight. The call center is open from Monday through Friday from 7:00am to 11:00pm CT and Saturday and Sunday from 7:00am to 8:00pm CT.
If you plan to redeem by phone, there's a shortcut that you might want to consider before picking up the phone. When I called to book my award, the Business Extra agent wasn't able to see the award availability that I saw on AA.com. However, I was able to hold the award reservation on AA's website and give the agent the record locator to take over the award and ticket it using the Business Extra awards. This also saved the hassle of having to provide traveler information over the phone.
The final step was for me to provide the authorization numbers from my redemption confirmation for the agent to be able to ticket the request. It took less than an hour after her request for the award to be ticketed.
Value of Business Extra Points
One aspect of the Business Extra program that I haven't seen many data points on is the value of these points. And the trouble is that there are so many options — both good and bad — for redeeming Business Extra points that it's hard to pin down an estimate of the value. As a result, I made sure to see how much these points saved me for this redemption.
At the time I booked my award, the cheapest one-stop itineraries from Atlanta (ATL) to Sydney (SYD) on the dates I'm traveling cost $1,030 per person. Booking this round-trip with Business Extra cost 4,400 points plus $116 in taxes/fees round-trip. That means I got around 20.8 cents of value from each of these Business Extra points. And considering that points are earned at a rate of 1 point per $5 spent on airfare and carrier imposed surcharges, that translates to a 4.15% return on this spending. Not a bad return for a double-dip program.
As a point of reference, the award I booked wouldn't be a great redemption if I used AAdvantage miles. The round-trip itinerary would've cost 80,000 AAdvantage miles plus $116 in taxes. Compared to the $1,030 revenue price, that's only 1.14 cents per mile of value. That's pretty poor compared to TPG's valuation of AAdvantage miles of 1.4 cents each.
That brings up one final aspect to keep in mind when considering how to redeem Business Extra points for free flights: the relative cost vs. AAdvantage miles. If you divide my above valuation of Business Extra points (20.8 cents) by TPG's valuation of AAdvantage miles (1.4), you get ~14.87. This is a ballpark estimate, indicating that 1 Business Extra point is equivalent to roughly 15 AAdvantage miles. As a result, you should consider redeeming Business Extra points when you'd have to use more than 15 miles per point for the award ticket. If the AAdvantage award ticket would require less than 15 miles per Business Extra point, you'd be better off using miles (though again, this is simply an estimate).
Put another way, ask yourself this question: how many AAdvantage miles am I keeping in my account for every Business Extra point I redeem? If the answer is more than 15, use Business Extra points. If the answer is less than 15, use AAdvantage miles.
Here's a comparison of the two, and pay special attention to the rightmost column and how it compares to the break-even mark of 15 miles per point:
|South America Zone 1||Economy||40,000||3,000||13.3|
|Europe and South America Zone 2||Economy||60,000||4,400||13.6|
|Japan, China, South Korea||Economy||70,000||4,400||15.9|
|Domestic including transcon||Business||65,000||5,400||12.0|
|South America Zone 1||Business||60,000||5,400||11.1|
|Europe and South America Zone 2||Business||115,000||7,200||16.0|
|Japan, China, South Korea||Business||120,000||7,200||16.7|
|Europe and South America Zone 2||First||170,000||10,000||17.0|
|Japan, China, South Korea||First||160,000||10,000||16.0|
*AAdvantage award prices are listed from the MileSAAver award chart as of May 10, 2019 — ignoring Off-Peak pricing. Domestic American flights under 500 miles in distance cost 15,000 miles at the saver level. Some Shuttle flights may cost 12,500 AAdvantage miles each way in economy or 25,000 each way in business class. Business class AAdvantage awards to Hawaii in lie-flat seats will cost 7,500 more than the price shown above.
Again, for redemptions with a higher miles-per-point ratio, you'll want to use Business Extra awards. For example, my South Pacific economy award is one of the best options (comparatively speaking), since AAdvantage awards cost 80,000 miles round-trip vs. just 4,400 points. This award option is keeping 18.2 AAdvantage miles in your account for every Business Extra point you redeem.
However, you'll want to use AAdvantage miles instead for Central America awards in business class, since miles will stretch much further than points. These flights cost 50,000 miles round-trip or 5,400 points — meaning your points are saving you just 9.3 AAdvantage miles each.
And of course, be on the lookout for Economy Web Specials on certain American flights. If there are regular award rates below MileSAAver levels, that'll drop your miles per point ratio even lower, making Business Extra redemptions a worse option.
No matter how you end up using Business Extra points, make sure that your business is earning these valuable points and staying on top of when they expire. While there's some value in redeeming smaller amounts of points for club day passes or upgrades, free flights can provide a substantial savings for a small business. I hope this post helped show you how to do so.
To read more about American Airlines Business Extra, check out:
- Register for Double AA Business Extra Points on Transatlantic and South America Flights
- Guide to Earning and Burning With American’s Business Extra Program
- Add Your Business Extra Number to Your AA Profile
- The Pros and Cons of American Airlines’ Business Extra Program
This post was originally published on January 10, 2019 and updated on May 11, 2019 with the new online booking process.