Etihad Guest Redemption – the ULTIMATE guide (Part 1 of 3)

An Introduction

Enough and more has been written about Etihad – the “Residence” experience, its recent struggles towards profitability and the equity alliance it has built. That requires a separate post on its own. In this post, I will concentrate on the redemption opportunities Etihad Guest offers.

Broadly, we can categorize the redemption opportunities into 3 parts – Upgrade on Etihad operated flights, Business-class redemption on Etihad flights and redemption on Etihad partners.

For the purposes of the analysis, I would consider four travel routes – Abu Dhabi to Mumbai, Abu Dhabi to London, Abu Dhabi to New York and Mumbai to New York.

Why these four routes? Because, these are very different routes in terms of distance and, as per my understanding, a fair representative for key routes of Etihad. The analysis would be number-heavy, so I would try to keep it simple as much as possible.

In part 1 of the series, let us look at the first option i.e. Upgrade on Etihad operated flights from Economy to Business.

Upgrade on Etihad operated flight

Even prior to 2016, using your miles to upgrade your ticket on Etihad was challenging. There were number of fare categories and getting a good value was difficult. Now, if you want to redeem your miles for an upgrade, you would wish you were in 2016!

Etihad’s lowest categories of fares (Economy Deal and below) cannot be upgraded using miles. There are three higher classes of economy fares that can be upgraded – Economy Saver, Economy Classic and Economy Flex. Economy Flex fares are more than double Economy Deal fares and it would almost never make sense to book. Therefore, for the purposes of the analysis, Flex fares have been ignored.

Now let us jump in.

Abu Dhabi -> Mumbai -> Abu Dhabi (Travel date: April 2019)

	Economy Saver Fares	Economy Classic Fares	Business Class Fares	Competitor Business Class Fares
Round-trip Fare	$424	$713	$1,136	$850
Miles required to upgrade	60,000	35,000
Effective cents per mile on Etihad	1.2	1.2
Effective cents per mile on Competitor	0.7	0.4

You would require 60,000 miles to upgrade a round-trip Economy Saver fare to Mumbai, which costs $424. The lowest business-class fare is $1,136 – which means your miles are being valued at 1.2c per mile.

Similarly, you will need 35,000 miles to upgrade a round-trip Economy Classic fare to Mumbai, which goes for $713. This also means that you are getting a value of 1.2c for each mile.

One final thing, if you are agnostic about the choice of your airline, Jet Airways – another airline offering best-in-class services – offers round-trip business-class fares on the same dates for $850.

If you were to book Etihad economy and upgrade it to business rather than booking a business fare on Jet Airways, you would be getting a value of 0.7 cents for each mile – not a good value at all!

But hold on, there is more. A direct business-class redemption in this route also costs 60,000 miles and US$260 in taxes and other charges. Therefore, an economy ticket followed by upgrade using miles makes little sense on this route.

Abu Dhabi -> London -> Abu Dhabi (Travel date: April 2019)

	Economy Saver Fares	Economy Classic Fares	Business Class Fares	Competitor Business Class Fares
Round-trip Fare	$949	$1,292	$3,962	$3,443
Miles required to upgrade	115,000	78,000
Effective cents per mile on Etihad	2.6	3.4
Effective cents per mile on Competitor	2.2	2.8

Things look slightly better in AUH-LHR route. The difference between economy and business fares is high and therefore you get more value for your miles.

If you were to book Economy Classic fare and upgrade to business using your Etihad Guest miles, you might be able to get 3.4 cents per mile – which is a decent bargain.

Abu Dhabi -> New York -> Abu Dhabi (Travel date: April 2019)

AUH to JFK is one of the longest non-stop routes for Etihad. As no other carrier operates a direct flight on this route, I have considered Turkish Airlines as a competitor. Turkish Airlines is comparable to Etihad in experience and service and operates this route with a small stopover in Istanbul.

	Economy Saver Fares	Economy Classic Fares	Business Class Fares	Competitor Business Class Fares
Round-trip Fare	$1,480	$2,025	$6,069	$3,917
Miles required to upgrade	190,000	140,000
Effective cents per mile on Etihad	2.4	2.9
Effective cents per mile on Competitor	1.3	1.3

If you care about non-stop travel, you would get decent returns for your miles at 2.9 cents. However, the value goes down significantly if you were to consider a one-stop travel using Turkish Airlines.

Mumbai -> New York -> Mumbai (Travel date: April 2019)

Any analysis would not be complete without considering the bread-and-better for Etihad’s passenger business – transiting passengers from East to West and vice versa. I have considered BOM-JFK-BOM route because it is one I have traveled a few times and is extremely competitive. India carriers (Jet Airways, Air India), US/EU carriers (United, Lufthansa, Swiss) and Middle-east carriers (Emirates, Turkish, Qatar) are all competing for your business here.

Given the Etihad uses a hybrid of distance-based and fare-class reward mechanism, value for your miles take a real beating here.

	Economy Saver Fares	Economy Classic Fares	Business Class Fares	Competitor Business Class Fares
Round-trip Fare	$1,232	$1,647	$2,973	$3,029
Miles required to upgrade	250,750	175,500
Effective cents per mile on Etihad	0.7	0.8
Effective cents per mile on Competitor	0.7	0.8

Due to competitive pressures, the fares are incredibly cheap. This leads to a very low return for your miles.

Summary

While we are yet to look at the other options, using your miles to upgrade an economy ticket does not seem very lucrative except in mid-haul direct routes such as Abu Dhabi to London.

Next up – Part 2 – Redeeming Etihad Guest miles for business class tickets