This week, Etihad Airways has come out with an attractive promotion to incentivize future travel: whenever you purchase an Etihad Travel Voucher between June 10 and June 24, the airline will add 50% to the value of your voucher for free.

That sounds like a pretty sweet deal on the surface, effectively representing an instant 33% discount on the price of any paid fares with the UAE flag carrier. But I’ll admit that I was skeptical about the deal at first, because after all, how often would I see myself purchasing a cash fare on Etihad? 

Looking into it a bit further, though, there are a few potential sweet spots that are at least worth highlighting, although also a fair few cautions to go along with it as well.

Buy an Etihad Travel Voucher with a 50% Bonus

The 50% bonus is valid for purchases until June 24, 2020. Purchase an amount between US$250 and US$65,000, and the airline will top-up your voucher for an additional 50%. So if you’re looking to redeem this on a particular Etihad Airways fare, you’d just purchase a voucher for 66.67% of that fare in order to be able to redeem the voucher towards the full amount.

You may redeem the voucher starting on August 1, 2020, for a validity period of two years after that – so your travel would need to take place before August 1, 2022.

To purchase a voucher, you’ll need to have an Etihad Guest account (so that your voucher is associated with your Travel Bank), and then call Etihad to purchase. Even though the voucher is sitting in your account, it can be used to pay for anyone’s flight or extra incidental charges.

What Good Deals Are Available?

I’ve never associated Etihad Airways with particularly affordable economy class tickets, while their First Class flights are, as you’d expect, priced rather ludicrously in the mid-five-figure range for a round-trip. 

Therefore, I’d say that business class fares is the sweet spot if you’re looking to use the 50% bonus voucher to score some significant savings compared to the next-best alternative.

In searching for such sweet spots, we follow the same line of reasoning as previous deals that we’ve come across over the past few months: here in Canada, the American Express Platinum Card’s Double Rewards promotion effectively secures a minimum baseline valuation of 2 cents per point (cpp) for your MR points, so if we can find cash deals that cause an equivalent points redemption to clock in at less than 2cpp, then it could be a better deal to pay cash rather than redeem points for your next trip. 

(Even if there were no Double Rewards promotion, 2cpp is still a reasonable target to aim for when redeeming points for trips, especially in business class when you might aim for even higher value. If you aren’t getting 2cpp in value for your points, you should strongly consider using the cash alternative instead and saving the points for the next trip.)

We can take the Aeroplan program, a 1:1 transfer partner of Amex MR, as a fair point of comparison. It helps that Aeroplan miles are now redeemable on Etihad Airways, so we can be sure we’re comparing apples to apples: you can book Etihad business class through either Aeroplan or through the 50% bonus event, so are there circumstances when the latter is a better choice than the former?

Taking a look across the board at Etihad’s cash fares, the cheapest business class fares out of North America appear to be those with India or South Africa as their destination. These fares generally fall into the range of US$2,000–3,000 / C$3,000–4,000 round-trip.

Here’s on example of Chicago–New Delhi round-trip for $3,760 (CAD):

Taking into account the 50% bonus voucher, you’d only need to pay $2,507 for this flight. If you paid with your Amex Platinum, you could then offset that purchase at the doubled rate of 1,000 MR points = $20 for 125,333 MR points, which is a sizeable discount compared to the 150,000 MR points you’d need to transfer to Aeroplan and book a round-trip between North America and the Indian Subcontinent.

Now, we haven’t yet factored in the 5.5% net return you’d earn from paying with your Amex Platinum (8% gross return under Double Rewards, offset by a 2.5% foreign transaction fee since the travel voucher can only be purchased in US dollars).

An alternative would be to pay for the travel voucher with a US-issued Amex Platinum, in which case you’d earn a very healthy 5 US MR points per dollar spent, or 9,380 US MR points in total.

We also haven’t taken into account the miles you’d earn when crediting the Etihad paid fares to a frequent flyer program – and since Aeroplan and Etihad are now partners, we may as well credit the miles to Aeroplan to keep this simple.

Looking at the Etihad earning chart, we see that their Saver “Z” business class fares earn 115% of the total mileage flown; in the case of a Chicago–New Delhi round-trip, that translates into a further 19,995 Aeroplan miles in your account!

The best part? You can emulate an Aeroplan redemption by adding a stopover in Abu Dhabi in either direction of the paid fare as well, for a very small increase in the fare:

That’s only one example. You can run the numbers yourself on other competitively-priced fares as well.

Generally speaking, even a fare in the range of US$3,500 / C$5,000 might still be attractive after applying the 50% discount, comparing against a 2cpp valuation, and factoring in the points you earn from booking a cash fare instead of redeeming points.

Indeed, most fares out of the US East Coast to India or South Africa seem to fall in this range, while there are even some fares out of Toronto (which is generally priced higher than the US East Coast cities) that would save you the trouble of connecting through the US.

If you’d need to make a trip to India or South Africa over the next two years, the Etihad 50% bonus voucher could unlock significant savings even compared to a points redemption. 

At the same time, this deal would also be very attractive if you’re a frequent Etihad flyer who regularly purchases paid fares with them, or if you’re interested in flying the two-bedroom Etihad Residence with private butler service on the Airbus A380.

As I recall, fares on the Residence can be brought down to the region of US$7,000 at the lowest, so with a 50% bonus, you’re looking at US$4,666 – a much more reasonable outlay, I suppose? 😉

What Are the Risks with This Deal?

Just because there are a few potentially compelling use-cases doesn’t mean that everyone should jump on this deal.

It’s worth noting that you can only redeem the voucher starting on August 1, 2020, which means that any of the discounted business class fares that are available at the moment could easily change by then.

Given the lack of demand for travel globally, I don’t think they’re going to rise too much compared to current levels. But if you do purchase the voucher, you should at least be prepared that you may not get exactly the same deal as the fares that are currently available. 

Generally speaking, I’d only recommend making this purchase if you can envision at least two or three types of trips over the next few years when you might be able to score a good deal on an Etihad paid fare. Don’t put all your hopes on a single fare – if that fare were to be pulled, then you’d be left with thousands of dollars in Etihad money that you’d struggle to use up. You’d hate to see that. 

Some observers might point out the risk of Etihad going bankrupt before you can use the fare. I wouldn’t place too much weight on that, as I think Etihad are relatively safe, and even if they did go belly-up, a credit card chargeback should take care of you in that event.

I also think it’s worth mentioning that because so many travel providers around the world are competing to raise cash at the moment, we’re likely to see far more “great deals” in travel than we’re actually able to take advantage of over the next few months and years. 

Therefore, don’t be persuaded to jump on a certain deal simply out of the fear of missing out, because there will quite likely be better deals just around the corner.

Only hop on a deal if it’s perfectly tailored to your travel situation – in this case, someone who lives in North America and knows that they need to make regular trips to India might fit the bill, whereas someone who simply wants to visit India once over the next few years, but hasn’t actually planned the trip, might choose to hold off. 

Conclusion 

Etihad Airways is offering a no-strings-attached 50% bonus on the purchase of an Etihad Travel Voucher over the next two weeks.

While it won’t be appealing to everyone, some of Etihad’s attractively-priced business class fares now represent an even better deal than redeeming points, so it’s definitely worth thinking about whether you can make this deal work for you. A flat 33% discount on all airfare is virtually unheard of, so I’m sure some of you will end up benefiting from this!