Are Alaska Airlines Awards On Icelandair A Good Deal?

In September, Alaska and Icelandair announced that they were reinstating their partnership, which they had previously discontinued in June 2013. When the partnership was reinstated it was initially only reciprocal when it comes to earning miles, though a couple of weeks ago they finally added reciprocal mileage redemptions as well.

Icelandair-Business-Class-1

I was really excited about the partnership being reinstated. I had the chance to visit Iceland last summer and had an amazing time, and can hardly wait to return. It’s one of the most gorgeous places on earth, so anything which makes it easier to redeem miles to Iceland is a huge win, in my opinion.

Iceland

Redeeming Alaska miles on Icelandair

There are a few things which make Mileage Plan redemptions on Icelandair unusual/special:

  • Alaska is imposing fuel surcharges for redemptions on Icelandair, which makes them the only partner other than British Airways where that’s the case
  • Traditionally partner awards can only be booked at the saver level, while Alaska has low, medium, and high redemption rates on Icelandair (business class awards have a single award level
  • Alaska allows stopovers on one-way awards, which means you can travel from the US to Europe with a stopover in Iceland — that’s the ideal way to visit the country, in my opinion

Icelandair-award-chart

With that in mind, there’s just one redemption rate for business class travel on Icelandair, which is 55,000 miles one-way. For that price you can fly from any of their US gateways to any of their European gateways, via their hub in Iceland.

Icelandair-route-map

Take the below itinerary from New York to Frankfurt, with a stopover in Reykjavik. As you can see, in addition to the 55,000 miles you’re stuck paying ~$200 in taxes/carrier imposed surcharges:

Icelandair-Award-Space

At the moment Alaska is selling miles with up to a 50% bonus, which means you can buy miles for as little as ~2.0 cents each.

At that cost, and if you’re valuing Alaska miles at 2.0 cents each, you’d be paying ~$1,300 for a one-way business class ticket between the US and Europe on Icelandair, with a stopover in Iceland.

Using that as a basis, let’s look at the other ways you can get to Iceland. Before we continue, I should note that Icelandair doesn’t have a “real” business class. Instead the seats can most closely be compared to domestic first class on a US airline.

Icelandair-Business-Class-6
Icelandair business class seat

Icelandair-Business-Class-12
Icelandair business class breakfast

Alternatives for getting to/from Iceland?

With the above “cost” for a redemption rate on Icelandair as a starting point, what are the alternatives for getting to/from Iceland:

  • Cheap ticket in WOW Air economy. WOW Air is a fairly new airline with a similar route network to Icelandair, except they’re not quite as far along in their growth process. They’re a low cost carrier with super low fares, and in many cases they charge just ~$100 each way. The catch is that they’re truly no frills, and charge you extra for everything.
  • A revenue business class ticket on Icelandair. Icelandair often has reasonably priced business class tickets between the US and Europe, and you’re allowed a stopover in Iceland. Often they’re in the ~$1,800 range, in which case you’re not paying that much more for a roundtrip ticket than you’d be paying for a one-way award on Alaska (assuming you’re valuing Alaska miles at ~2.0 cents each). And you’d be able to earn Alaska miles on that revenue ticket.
  • British Airways Avios ticket from London. British Airways recently launched flights between London and Iceland, which you can quite easily redeem Avios on. British Airways charges the following amounts for one way travel between London and Reykjavik:
    • Economy — 8,500 Avios off-peak, 10,000 Avios peak
    • Business — 17,000 Avios off-peak, 20,000 Avios peak

Wow-Air
WOW Air is a much more economical way for getting to Iceland

Bottom line

Generally I’m not someone who would fly WOW Air, since I don’t travel that light, so I’d end up still paying a decent amount for checked bags, seat assignments, etc.

Still, if I returned to Iceland I think I might just fly WOW Air as far as Reykjavik, then redeem Avios to fly British Airways to London, and then after staying in Europe for a bit I’d book a separate ticket back to the States in a “real” business class product.

While I suppose it’s nice to have the Icelandair award option, I just don’t find the value to be there. If the pricing were 45,000 miles one way in business class without fuel surcharges I’d say it might be worth it, but the extra miles and fuel surcharges just ruin the value for me.

I’d much rather redeem 55,000 Alaska miles for Fiji Airways business class from the US to New Zealand via Fiji (with a stopover) in Fiji Airways business class.

Fiji-Awards-4

How about you — do you plan on redeeming Alaska miles for travel on Icelandair? What do you think of the value proposition?

Comments

  1. @ Lucky – It seems like your trip to Portugal and Iceland (18 months ago) won´t be ever published. Not wanting to be fussy, but could you tell why? Dog ate your notebook? Bad memories from eating too many pastéis de belém?

  2. Perhaps not the best way to get to Iceland, but there is SK true OSL or CPH.

    So any *A carrier across the pond connecting to SK Iceland flight in OSL or CPH., bonus if you can find SK new J TATL.

    Isn’t most of Iceland Air flights from Europe day flights? But the returns from the US are short red eyes?

  3. By the way
    “Generally I’m not someone who would fly WOW Air, since I don’t travel that light, so I’d end up still paying a decent amount for checked bags, seat assignments, etc.”

    Who are you and what have you done with Lucky? We know he never checks bags :-))

    Seriously, Iceland is cold enough that you might just have to check bags due to the extra cloths.

  4. I think it’s a great value proposition for people who are only banking 1 type of points/miles currency, with a focus on economy travel. At the low level (55K round trip), that’s cheaper than a round trip to Europe on Delta (60K+), and you get the free stopover in Iceland!

  5. You say that there’s only one redemption level for business class on Icelandair. It’s true that they don’t have low, middle, and high level awards. However, they still have two redemption levels: 50K one-way to Iceland and 55K one-way to Europe.

  6. I assume the Fiji option is with no fuel surcharges based on your comments. I agree I’d rather go that route. Besides they are….wait for it….polar opposites 🙂

  7. Besides not having a “real” business class, I did not find ANY J seat in the whole month of May (hardly high season) for YVR-AMS on the YVR-KEF portion. However, it would set me back 55,000 valuable AS miles + $197. For this, you get 7 hours in Y on a B757, and 3 hours in their so called J.
    In short, a total rip-off!

  8. I flew IcelandAir twice this summer and I have to say I was completely blown away by them. I contacted them beforehand because I have major anxiety related to flying and on all legs of the journey I was invited to meet the pilots and see the cockpit. The stewardesses were charming and friendly (one held my hand for take off and landing), the seats in Saga class exceptionally comfortable and the food good, if not great. This isn’t bad since my ticket was £200 cheaper than flying Norwegian direct. My boyfriends father has platinum status with Delta and instead I’m making him fly IcelandAir to Seattle this February.

    Iceland is an absolutely beautiful country and a must visit too!

  9. @carlos I was also really looking forward to his Iceland trip report. But I gave up on that long, long ago.

  10. I’m wondering if we can use AA miles for award travel MLE-AUH-LHR (with Etihad) then connect with BA for LHR-KEF
    Middle East/Indian region to Europe category .
    Is it valid routing and will the BA sector carry high fuel surcharges?

  11. The fuel surcharge is just a nuisance fee, but those horrid business class seats are more than a nuisance, particularly from the West Coast where we expect (and demand) lie-flat seats for TATL flights. No way I would pay that many miles for an inferior seat. Better to use a Chase BofA 241 cert to fly in comfort to London and then a quick add-on flight.

  12. @Lucky – I think I speak for many of your readers when I say just how very, very much I want to see you write a trip report of a flight on WOW in coach across the Atlantic. Do it. You know you want to, just as someday I want to fly on Spirit or Ryanair (but just once).

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