Cardless and Avianca LifeMiles announced this morning the details of their new co-branded credit cards. I’ll cover the cards separately, but I find a companion piece that came with the credit card news to be very intriguing even for those who are not interested in the LifeMiles credit cards: Avianca’s new LifeMiles+ subscriptions are going to present a potentially great value proposition for some — perhaps making LifeMiles a more compelling program for those willing to pony up for the cost of a subscription.
LifeMiles+ subscription levels and benefits
LifeMiles+ is a new subscription offering from Avianca LifeMiles. This new program includes some similarities to the former Club LifeMiles program, but with two features that could be really appealing:
- All subscription levels include a 10% rebate on all of your LifeMiles award redemptions. This includes Star Alliance awards as well as awards on other partner airlines. These miles are added to your account within 15 days of redemption.
- Basic, Pro, and Max subscription levels include free award changes and cancellations.
That second bullet point is one that I didn’t see in the original press release bullet points, but I attended the Cardless x Avianca LifeMiles launch event last night in New York City where I learned about that feature from Matt Vincett, CEO of LifeMiles.
Other benefits listed above, like “up to 25% discount on your redemptions with Avianca” (for travel on Avianca metal) may be of interest.
Note that if you subscribe, you will only be able to cancel your subscription after a minimum of 6 months. In other words, you’re committing to at least 6 months of the subscription plan you choose.
Here are all of the subscription levels:
Is a LifeMiles+ subscription worth it?
I am actually very excited about the new LifeMiles+ subscription. I initially assumed this wouldn’t be attractive, but the new benefits are making me seriously consider a subscription.
As you can see, for your subscription fee, at first glance, it looks like you’re buying a monthly allotment of miles for a price that isn’t attractive. If you only valued the monthly miles, here’s what you’d be getting over the course of a year
- Lite: 6,000 miles per year (500 per month) at a cost of $240 ($20 per month), which is about 4c per mile.
- Basic: 24,000 miles per year (2K per mile) at a cost of $600 ($50 per month), which is about 2.5c per mile
- Pro: 54,000 miles per year (4.5K per month) at a cost of $1200 ($100 per month), which is a cost of about 2.2c per mile
- Max: 120,000 miles per year (10K per month) at a cost of $2400 ($200 per month), which is a cost of about 2c per mile
Avianca regularly sells miles for less than the prices above, so none of these subscriptions would be worth it for the monthly miles allotment alone. Note that you’ll also earn additional miles on credit card spend with a subscription, but frankly that will only bring the credit card on par with earnings you could get elsewhere, so I don’t think that offer is particularly compelling.
However, I think the real star of the show here is the 10% discount on all Avianca LifeMiles redemptions, which applies to all of the LifeMiles award tickets you book (including for others). The value of that rebate alone could be fantastic depending on how often you redeem LifeMiles. Beyond that, the Basic, Pro, and Max subscriptions offer no fees for changes or cancellations, which would suddenly make LifeMiles bookings even more appealing for many.
Let’s assume that you value LifeMiles at 1.25c per mile (in reality, for premium cabin Star Alliance travel, they can be far more valuable). Looking back at the subscription levels, let’s consider the net cost of the subscription after considering the value of the annual miles received with it:
- Lite: $240 – 6,000 miles per year valued at 1.25c per mile ($75) = $165
- Basic: $600 – 24,000 miles per year valued at 1.25c per mile ($300) = $300
- Pro: $1200 – 54,000 miles per year at a value of 1.25c per mile ($675) = $525
- Max: $2400 – 120,000 miles per year at a value of 1.25c per mile ($1500) = $900
In my opinion, both the “Life” and “Basic” subscriptions start to look very appealing when you consider that they come with:
- Lite: 10% rebate on all award redemptions, including Star Alliance awards
- Basic: 10% rebate on all award redemptions, including Star Alliance awards, and free changes and cancellations
Given that Avianca LifeMiles often charges in the realm of $150 to $200 per passenger for cancellations (the cost varies by route), those who redeem LifeMiles often or who would like to but can’t accept the inflexibility might be particularly intrigued.
Personally, in most years, I redeem a lot of Avianca LifeMiles. Last year alone, I redeemed more than 700,000 Avianca LifeMiles. Even if I didn’t value the monthly subscription miles, getting 10% of that total back would be a great deal. I’d take 70K back for $240 any year I could get it.
Of course I don’t redeem that many LifeMiles every year, but a single one-way to Europe for my family of four booked via LifeMiles would likely yield around 25,000 miles back. Again, if I would make one redemption like that per year, I’d consider the Lite subscription a win.
But I think I’m even more interested in the Basic plan. I would probably book with LifeMiles even more often if I had the ability to make free changes and cancellations. If I accept that “Lite” plan is worthwhile to me at $240 plan per year, the buy-up to the Basic plan is an additional $360 per year. For that incremental increase, I would get free changes and cancellations and an additional 18,000 miles per year.
That obviously won’t be a deal for everyone; many people lock in a trip and never need to make a change or cancellation. As a family traveler, I do place some value on flexibility. I especially like it when I can lock in a booking far in advance and then tweak it as plans firm up over time. Even if I only valued the incremental 18,000 miles at 1c each ($180), the buy-up to basic amounts to about a net $180 more in order to get free changes and cancellations.
Still, those changes and cancellations aren’t really “free” considering the $180 per year that I’d be committing — and keep in mind that this is just a loss if I don’t cancel any trips. And to that point, I would much, much rather see Avianca LifeMiles eliminate change and cancellation fees for all passengers. In an environment where all of the major US airlines have eliminated change and cancellation fees, and many (most?) major airline loyalty programs worldwide feature far lower change and cancellation fees than Avianca LifeMiles, I think it would be a better business move on Avianca’s end to just eliminate the barrier caused by those fees entirely. They’d probably see a huge bump in redemptions if they did.
But as long as Avianca is going to hang on to its current fee structure, I see value in the Basic subscription. To be clear, I don’t see this being broadly applicable. In fact, I can’t imagine that LifeMiles will see wide pick-up on these subscriptions in an era where many Americans have cut the cord on cable bills and many (at least in my circles) have been looking to cut back on the cost of subscription-type services rather than add them. I’m not sure that the LifeMiles+ subscription makes sense from a broader business standpoint. But as an Avianca LifeMiles enthusiast who appreciates the solid redemption rates, the lack of carrier-imposed surcharges, and the beauty of some of Avianca’s pricing anomalies, I could see this subscription making sense for me and for other award travel enthusiasts.
And since you have the option to cancel after six months, some will find it worthwhile to sign up for a subscription just for the large rebate on a single trip and/or as an insurance policy of sorts for free change / cancellation fees on that single trip. The rules indicate that you must be subscribed at the time of change / cancellation to benefit from the free change/cancellation fees. If I were about to book a big LifeMiles redemption that would cost my family let’s say half a million miles, singing up for even six months of the “Basic” plan would yield me 50,000 miles back for a six-month cost of $300 and it would give me free changes and cancellations if they happen within that six-month window. I’d think it a no-brainer to subscribe at least in the short term if you’re booking a family trip like that.
Bottom line
I am excited about LifeMiles+, a new subscription program from Avianca LifeMiles. While these subscriptions aren’t worth it for the monthly allotment of miles included, they absolutely can be worth it for the mileage rebate and potentially for free changes and cancellations (for all but the “Lite” level). I don’t imagine that these subscriptions will make sense for everyone, but I do think they will almost be a no-brainer for anyone making a significant LifeMiles booking. The rebate alone on a round trip to Europe even for a couple will almost certainly make it make sense to consider subscribing for six months. Again, I don’t think that LifeMiles will see broad pickup on these subscriptions, but I imagine that those “in the weeds” with award travel will see these are being pretty attractive in the right scenarios.
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