Aeroplan points actually have negative value..
Nov 18, 2012, 9:01 pm
#1
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Aeroplan points actually have negative value..
Was looking at NYC-BRU award ticket.
The price is 60000 miles + $605.40 in scamcharges on AC metal via YUL.
The retail price of the ticket (L fare) is $762.55
This means your 60000 points covers exactly $157.15 or 0.26cpm value.
now, take into account that you are also giving up earning 7922 UA miles (L fare)
Even valuing those points at 2cpm (which is what you can buy them from UA for) - thats an opportunity cost of $158.44
Therefore, by using your AE points - you are actually LOSING MONEY (on top of 60000 points you spent!)
The price is 60000 miles + $605.40 in scamcharges on AC metal via YUL.
The retail price of the ticket (L fare) is $762.55
This means your 60000 points covers exactly $157.15 or 0.26cpm value.
now, take into account that you are also giving up earning 7922 UA miles (L fare)
Even valuing those points at 2cpm (which is what you can buy them from UA for) - thats an opportunity cost of $158.44
Therefore, by using your AE points - you are actually LOSING MONEY (on top of 60000 points you spent!)
Nov 18, 2012, 9:07 pm
#4
Join Date: Jan 2011
Programs: MP 1K,
Posts: 274
Was looking at NYC-BRU award ticket.
The price is 60000 miles + $605.40 in scamcharges on AC metal via YUL.
The retail price of the ticket (L fare) is $762.55
This means your 60000 points covers exactly $157.15 or 0.26cpm value.
now, take into account that you are also giving up earning 7922 UA miles (L fare)
Even valuing those points at 2cpm (which is what you can buy them from UA for) - thats an opportunity cost of $158.44
Therefore, by using your AE points - you are actually LOSING MONEY (on top of 60000 points you spent!)
The price is 60000 miles + $605.40 in scamcharges on AC metal via YUL.
The retail price of the ticket (L fare) is $762.55
This means your 60000 points covers exactly $157.15 or 0.26cpm value.
now, take into account that you are also giving up earning 7922 UA miles (L fare)
Even valuing those points at 2cpm (which is what you can buy them from UA for) - thats an opportunity cost of $158.44
Therefore, by using your AE points - you are actually LOSING MONEY (on top of 60000 points you spent!)
Nov 18, 2012, 9:07 pm
#5
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Nov 18, 2012, 10:05 pm
#7
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Nothing new here. The smart money stopped collecting Aeroplan a few years back. Whilst there were certainly opportunities with mini RTW in F and others since, for the most part that could have been achieved cheaper and more effectively in other programs.
Nov 18, 2012, 10:58 pm
#8
Join Date: Sep 2012
Location: YVR
Posts: 1,847
I can always keep the taxes/fees for my redemptions under $100, which I am okay with. If they start scamcharging for the UA flights, that's when I will jump ship...
Nov 19, 2012, 5:56 am
#10
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Was looking at NYC-BRU award ticket.
The price is 60000 miles + $605.40 in scamcharges on AC metal via YUL.
The retail price of the ticket (L fare) is $762.55
This means your 60000 points covers exactly $157.15 or 0.26cpm value.
now, take into account that you are also giving up earning 7922 UA miles (L fare)
Even valuing those points at 2cpm (which is what you can buy them from UA for) - thats an opportunity cost of $158.44
Therefore, by using your AE points - you are actually LOSING MONEY (on top of 60000 points you spent!)
The price is 60000 miles + $605.40 in scamcharges on AC metal via YUL.
The retail price of the ticket (L fare) is $762.55
This means your 60000 points covers exactly $157.15 or 0.26cpm value.
now, take into account that you are also giving up earning 7922 UA miles (L fare)
Even valuing those points at 2cpm (which is what you can buy them from UA for) - thats an opportunity cost of $158.44
Therefore, by using your AE points - you are actually LOSING MONEY (on top of 60000 points you spent!)
Proper arithmetic says that you are comparing paying 60000 miles + $605.40 vs. paying $762.55 and gaining 7922 miles. Which yields a value of 762.55-605.40 for 60,000+7922 miles. That is, 15844/67922=0.23 cents per mile. Careful, not 2 cents, 0.2 cents. $0.0023/mile.
Surely Aeroplan loves you if you pick such a reward.
Nov 19, 2012, 6:41 am
#11
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Let's not overdo it.
Proper arithmetic says that you are comparing paying 60000 miles + $605.40 vs. paying $762.55 and gaining 7922 miles. Which yields a value of 762.55-605.40 for 60,000+7922 miles. That is, 15844/67922=0.23 cents per mile. Careful, not 2 cents, 0.2 cents. $0.0023/mile.
Surely Aeroplan loves you if you pick such a reward.
Proper arithmetic says that you are comparing paying 60000 miles + $605.40 vs. paying $762.55 and gaining 7922 miles. Which yields a value of 762.55-605.40 for 60,000+7922 miles. That is, 15844/67922=0.23 cents per mile. Careful, not 2 cents, 0.2 cents. $0.0023/mile.
Surely Aeroplan loves you if you pick such a reward.
so the equation is
60000AP+$605.40=$762.55-$158.44 (opp cost)
doing some grade 9 math:
60000AP=$762.55-$158.55-$605.40
60000AP= (-$1.51)
yes, its an extreme example, and noone here would use such an award, but I am sure everyone here knows somebody who has used a Y award to Europe at some point not realizing they are actually getting below zero value for their points.
Nov 19, 2012, 7:30 am
#12
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Still, you take an extremely poor example of using Aeroplan miles, but next when valuing your UA miles, you pick a relatively high value, which is not really consistent with the latter. Plus, using Aeroplan but accumulating on UA is not a terribly useful comparison. Not of much use to some of us.
The way I do it is based upon using *and accumulating* on Aeroplan.
No matter how you look Aeroplan miles have been seriously devalued. But for people with status, 2 cents/mile is not an unrealistic valuation. For mom and pop, I would say 0.8. Not 0.2...
I have recently purchased miles at 2 cents/mile. But then the ticket included minimal Aeroscam co-pay.
Nov 19, 2012, 7:50 am
#13
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No matter how you look Aeroplan miles have been seriously devalued. But for people with status, 2 cents/mile is not an unrealistic valuation. For mom and pop, I would say 0.8. Not 0.2...
I have recently purchased miles at 2 cents/mile. But then the ticket included minimal Aeroscam co-pay.
I have recently purchased miles at 2 cents/mile. But then the ticket included minimal Aeroscam co-pay.
now anything above 1cpm is probably a stretch for Aeroplan.
Add to it, that it can be argued that Aeroplan is twice as hard to earn from flying nowadays.....
Nov 19, 2012, 7:58 am
#15
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