Why you should avoid transferring Amex Membership Rewards Points to Airpoints for Air New Zealand flight redemptions

GUIDE: Using Points
DIFFICULTY: Intermediate
TIME TO READ: 4 minutes
POSTED: January 12, 2018
UPDATED: January 12, 2018
LOYALTY PROGRAMS: American Express Membership Rewards, Air New Zealand Airpoints

I recently had a family member remark that they planned to transfer their American Express Membership Rewards Points (MRP) to the Airpoints Program, for the purpose of making a flight redemption on Air New Zealand.

This sent a shiver down my spine, and I began to fear that it is something that other Kiwis may do on a regular basis.

Here at Point Hacks, we generally always iterate how poor value Airpoints Dollars are compared to the other point currencies that can be accessed through everyday spend with an American Express Membership Rewards Card.

However, there may be times where you want to redeem for a specific flight that only Air New Zealand flies, and you cannot otherwise find standard award seating through partners like Virgin Velocity, KrisFlyer, or United MileagePlus.

If you find yourself in this situation, there is a better way.

Airpoints vs Amex Travel

You can convert 10,000 MRP into 57 Airpoints Dollars. These are worth $57 when redeemed on domestic flights with Air New Zealand, and slightly less on international flights when you take into account the additional fees/taxes you will need to pay.

This is based on a transfer rate of 175 MRP : 1 Airpoints Dollar.

However, those same 10,000 MRP will convert into a total of $75 that can be spent with American Express Travel Online.

This is a transfer rate of ~133 MRP : $1 NZD.

You can immediately see where I’m going with this, in terms of value proposition.

This doesn’t even take into account the fact that you will earn points and status credits booking with Amex Travel – you won’t earn these if you redeem using Airpoints Dollars.

You also won’t need to wait the 2 business days for your MRP to transfer to Airpoints.

Here are two scenarios, with all costs being current at time of writing.

Scenario 1 – Domestic

A one-way seat+bag fare from Auckland to Wellington on 16 May 2018 at 9.00 pm will cost $59, or 59 Airpoints Dollars, when booked directly with Air New Zealand.

Air NZ Booking

You would need to transfer 10,325 MRP to Airpoints to redeem for this flight.

If you booked this same fare through Amex Travel, while the cost of the fare is slightly higher at $63, you would only need 8,400 MRP.

You would also earn 1 Airpoints Dollar for the flight.

Air NZ Booking

The fare difference between Air New Zealand and Amex Travel is due to the card payment fee that the airline passes onto Amex ($4 for domestic).

Scenario 2 – Trans-Tasman

A one-way Business Class fare from Auckland to Sydney on the 13 June 2018 will cost $649, or 582 Airpoints Dollars and $67.72 in taxes and charges.

There are five flights to choose from, all at the same price. Three of these are on Air New Zealand metal, the other two are codeshare with Virgin Australia. All are for sale at the same price.

Air NZ Booking

You would need to transfer 101,850 MRP to Airpoints to redeem for one of these flights, plus pay taxes and charges.

If you booked this same fare through Amex Travel, while the cost of the fare is slightly higher at $654.72, you would only need 87,296 MRP, and this would cover the entire cost of the fare, including the taxes and charges.

You would also earn 40 Airpoints Dollars for the flight, or 2,690 Velocity points, which we would value at about $53.

Air NZ Booking

If you’re happy to pay taxes and charges like you’d otherwise have needed to pay if you made an Airpoints Dollars redemption, this further reduces the number of MRP required to 77,466, a yugeeeee saving of 24,384 MRP compared to an Airpoints redemption.

This is courtesy of the fact that Amex Travel let you mix points and cash for a redemption, without any added fees or reduced points and status earn like with Air New Zealand Flexipay.

The MRP saved is almost the equivalent of three of those one-way flights to Wellington that we looked at in Scenario 1.

The fare difference between Air New Zealand and Amex Travel is due to the card payment fee that the airline passes onto Amex ($6 for Trans-Tasman).

What if I just transferred those MRP to Virgin Velocity instead?

Funnily enough, based on the above fare, the Amex Travel redemption method actually compares quite well to otherwise having made a redemption using Velocity Points on this flight.

MRP transfer to Virgin Velocity at a ratio of 2:1.

An ‘Any Seat Business’ award, which is effectively what Amex Travel are letting you redeem for, would set you back a crazy 181,600 MRP, or 162,600 plus taxes.

A standard ‘Business Reward’ seat, which doesn’t let you earn any points (the equivalent of an Airpoints Dollar redemption), would set you back 90,000 MRP, or 71,000 plus taxes.

When you take into account the points and status earn through Amex Travel, the redemption options are pretty much the same based on the current fare rates. As such, I would recommend always doing a points value comparison before booking, noting that it will vary depending on the current fare rate for the flight.

Also note that the taxes and charges between Air New Zealand, Virgin Australia, and Amex Travel vary, but not by any significant margin.

Amex Travel booking, change and cancellation fees

Amex Travel does charge additional change and cancellation fees for flight bookings on top of the airline’s own fees and the difference in fare. Assuming that changes are permitted for your fare type, these fees are:

  • Amendment Fee: $33.00 per person, per change
  • Cancellation Fee: $55.00 per person

If you are looking to make a flexible reservation and minimise the cost of any flight changes, then you could be better off booking with Air New Zealand directly.

Summing Up

Using your Membership Rewards Points with Amex Travel for the purpose of booking flights with Air New Zealand will in almost all cases work out to be better value than a transfer to and redemption through the Airpoints program.

This is a bit sad, frankly, and is a consequence of both MRP and Airpoints Dollars being tied to the cost of the fare.

While you can sometimes get a better value redemption on Air New Zealand metal through partners like Velocity and KrisFlyer, this will be rare. Our national airline are notoriously stingy at releasing standard award seats to their partners.

If you’re already pretty close to having the number of Airpoints Dollars required to make a redemption, this may tip the scales in favour of a transfer.

Otherwise, if you:

  • Want to fly with Air New Zealand;
  • Are looking to use Membership Rewards Points;
  • Don’t intend to make changes (and incur more fees); and
  • There is no cheaper standard award availability through partner programs

Then opt for an Amex Travel booking over an Airpoints redemption.

Why you should avoid transferring Amex Membership Rewards Points to Airpoints for Air New Zealand flight redemptions was last modified: January 12th, 2018 by Daniel Kinnoch