MilesBuzz! - What's considered a great cost per mile?

A penny? It costs me $1000 or 80 000 miles to fly ATL JNB. So I would figure if you are paying more than $0.0125 a mile you are paying too much?

Nice board by the way.

Cheers

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Bruce

Hello Bruce, welcome to FT.

The answer to your question depends mostly on what you'd use your miles for (coach award vs. intl upgrade to first, for example) and what airline/alliance you wish to carry out these activities on.

Generally, you will find that most here will value their miles somewhere around $.02

If you would only use your miles towards domestic economy, your miles probably wouldn't be worth more than a penny each, because you can almost always get a domestic ticket for under $250 (Plus you'd earn miles on a purchased ticket). However, if its a last minute booking, it may be worth considerably more (even after the fee).

If you use your miles on international economy, see what the prices are and compare them to the award rate. There are some international destinations that are extremely valuable. For instance, flying to Australia from the east coast of the USA will put you out at least $1100+taxes&fees, but an econ award on United only costs 60k miles. After you factor in the miles you would have received for a paid ticket, you're around 1.5 cents/mile.
But miles are certainly worth the most when used to purchase higher class fares, upgrades, and RTW tickets. For some, the redeemed value averages above 3 cents/mile.
Lastly, make sure to consider your flexibility in your valuations. If you aren't flexible in scheduling your trips, your average purchased econ ticket should be more expensive, so the award redeemed for the same inflexible flights is worth more on average. Also, your ability to secure award tickets is dependant on your flexibility and your ability to plan ahead (or ability to chance a last minute redemption), so make sure to consider this.
Each person should plan out their projected usage and figure out their own valuation, especially since it is so simple to do. This will also help you pick the FF program that works best for you. There's tons of information on this site regarding all these situations and other related topics, so make use of the search option in this forum as well as the forum of any airline whose FF program you might be interested in.

Welcome to FT! http://www.flyertalk.com/forum/smile.gif

For 150K miles U.S. LH SEN members can fly to Europe in F on LH with a companion. Can be worth LAX-FRA almost 14000 or 16000$ in F for the two travellers. -=> almost 10c/miles value

Great cost per mile:
55,555 Star Alliance promo 2002, I received 250,000 miles for $1,000.

Alaska Airlines 35 segment promo going on right now, I received 140,000 miles for $675.

I consider a "great" cost per mile an opportunity to earn miles at less than 1/2 cent per mile. They don't happen that often, but usually once a year there is an opportunity for a "great" value.

Hi Bruce,

Good question and although it seems that the conventional wisdom is 2 - 2/2 cents per mile, my outlook is a bit different. I try not to value my miles in dollars(although sometimes it makes me crabby to know how much is spent) but rather how happy the mileage made me. If I want to go to a particular place for an anniversary then I don't mind burning more miles. And as far as earning miles, I'll do anything legal, ethical, and financially sound to get them. (US government savings bonds for instance).IMHO it is important to value the miles but also to figure out how pleasant the trip inspending them. Or as my wife says "life is too short to drink bad wine"

It all depends. . . .an advance purchase ticket to PHL might cost me $248 but if I have to fly there today you are looking at over $1200.

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by BruceinCary:
A penny? It costs me $1000 or 80 000 miles to fly ATL JNB. So I would figure if you are paying more than $0.0125 a mile you are paying too much?

Nice board by the way.

Cheers

</font>

You'll find that everyone here has their own rules of thumb. A lot of people have two different values for their miles: theoretical value and cash-in-hand value.

For example, 100000 miles for an FC ticket to London: that's a $10,000 ticket, or 10 cents per mile! Of course, I don't usually spend $10,000 on airline tickets, so that's a theoretical value for me. If FF miles didn't exist, I know I'd be in a $500 coach seat.

Compare that to 40,000 miles for a seat on a domestic flight I have to take tomorrow. Say a discount carrier could get me there for $500. If I take the award, I'm only getting a 1.25c a mile, but it's real cash in my pocket.

Depending on the airline, I also consider the miles I'd earn if I bought a paid ticket. For something like ATL-JNB, this might affect your decision.

Finally, you spend vs. redeem decision will probably be impacted by your own mileage earn/burn pattern, a quest for elite status, your current cashflow, and other factors. For the particular $1000 vs. 80k miles, there is no clear-cut answer. Do you need to keep that thousand bucks invested more than you need to keep those miles for a potentially better reward at some unforseen time in the future?

[This message has been edited by pinniped (edited Dec 04, 2003).]

Like others have said, it's such a personal decision, and hinged upon what you're going to use the miles for. I personally value the miles at 1.5 cents/total miles (including elite bonus). I use that as a benchmark to determine whether to fly or use an award, and in determining good prices for mileage runs.

Please take a look at the Value of Miles page on my web site below. Should answer your question.

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Free Frequent Flyer Miles (http://home.earthlink.net/~pgary/MilesFrame.html)

Most airlines sell miles for 2.5 cents if you need a few thousand to fill out for an award. Hilton sells Hilton points for 1.25 cents. They know the value of their points and they are going to for sure make a profit on them when they sell them. I figure they probably have a 25% mark up and as I look at how I can use them it seems consistent with that. So I value a mile at $.02 and a Hilton Point at $.01. Then when I'm trying to determine should I purchase a ticket or use miles it helps me. In your case I would have spent the $1,000 and gained the extra miles for flying rather than burn the miles.
But as others have said it depends on how you want to use them. I for one have NO desire to every again spend 13 hours on an airplane in Coach, so I burn mine for business class or better tickets on international flights. Which gives me a value of 3 to 7 cents. Same for Hilton points. I would never use them to pay for a room I can rent for $100 but rather save them up and use them for the high end stuff.

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"A day without FF Miles is like a day without SUNSHINE"

http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&item=2206897268&category=1306

I'm a buyer at 0.75 cents and a seller at 1.5 cents. Between those two values I'm indifferent.

I am a buyer at a 1.5 cents a mile or less.

I am a seller at 2.2 cents a mile or more.

Often I get to use miles at work, such as
1)using 25000 miles for what would have been an $1800 ticket to Seattle and I get reimbursed $900 which is a very very good deal at 3.6 cents a mile

2) using miles to upgrade to business class to Tokyo. Saving $5200 of which nets me $2600 for the miles used. (not the best example right now as I presently use my VIP's)but I have done this in the past.

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Oracle Implementations .... Will Travel....

[This message has been edited by TxLobo (edited Dec 05, 2003).]

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Tino:
I'm (...)a seller at 1.5 cents.</font>

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by TxLobo:
I am a buyer at a 1.5 cents a mile (...).</font>

Tino, meet TxLobo. TxLobo, may I introduce Tino to you. My commission is 20 % http://www.flyertalk.com/forum/wink.gif.

could someone help me out as I don't understand the cost per mile equation. If the annual fee on my CC is 55$ how much would I have to spend mimimally if I want to value a mile at 2c per mile? Would it be 11,000? Or as long as I earn AT LEAST 11,000 miles a year I am at least breaking even? Thanks in advance!

No.

If you earn 1 mile per dollar spent, and the miles are worth 2 cents each to you. then a spend of $ 2,750 is the break even since $ 2,750 x .02 = $ 55.00

11,000 miles at 2 cents is $ 220.00



[This message has been edited by CrAAzyPlatinum (edited Dec 05, 2003).]

so if my annual fee of my CC is 55, I only need to spend 2750 to break even?

if my annual fee is 130 and I value miles at 2c per mile then I need to spend 6,500$ or if I value them at 1c per mile then I would have to spend 13,000 to break even?

Also, if I buy a miles award ticket that would normally cost 386.50$ and I use 25,000 miles, what am I valuing a mile at. If I divide them I get .015 does that convert into 1.5c per mile? Thanks for the help and taking the time to explain this to a newbie :-)

The only reason I am using a mileage earning card and even earning miles is because I see paying 55$ for a ticket that costs 386.50 is much better than paying cash out of pocket. I know it's not the reason everyone else uses one and that EVERYONE else does it because they can get much higher returns but as a college student whose ENTIRE family lives 3,000 miles away, it makes sense, I think?

I try and earn miles at 1 cent or less and with LH it is not that difficult, once you get status. The current double miles on US are helping that - I can earn ~70K for about $550 - pretty good overall.

For redeeming miles, I usually go inter-continental and in C. Much better value because without the miles, I would be in a cheap seat in the back of the bus.

Domestically I only use miles when I have to pay out of pocket and my cash flow does not allow me to travel, but my heart says go for it.

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Also, if I buy a miles award ticket that would normally cost $386.50 and I use 25,000 miles, what am I valuing a mile at. If I divide them I get .015 does that convert into 1.5c per mile? Thanks for the help and taking the time to explain this to a newbie.</font>You're obviously not a science, technical, or business major! http://www.flyertalk.com/forum/smile.gif

Just remember to keep the units straight, dollars or cents. To calculate cents per mile, you have to divide the number of cents by the number of miles. So these can be stated as the following equivalent calculations:

$386.50 divided by 25,000 miles =
$386.50 / 25,000 mi. =
$.01474 / mi. =
$.015 / mi. (rounded)

There are 100¢ per $, so alternatively:

38,650¢ divided by 25,000 miles =
38,650¢ / 25,000 mi. =
1.474¢ / mi. =
1.5¢ / mi. (rounded) =
1½¢ / mi. (rounded)

See, that wasn't so bad!


Your other calculations were incorrect because you confused your division with multiplication -- again, not keeping your units straight.

If you have an annual fee (A) of $55.00 (5500¢), and a rate (B) of 2¢/ mi., ($.02/ mi.), you want to know how many miles (C) are needed.

Remember, dividing by something is the same as multiplying by its reciprocal.

$A divided by $B/mi. = C miles.
$A times (1) mi./$B = C miles.
$(A/B) times (1) mi. = C miles.
(A/B) = C
(55.00/.02) = C
2750 = C

Are you sure you're in college?!

http://www.flyertalk.com/forum/wink.gif

Well if law ever fails you a career in Math is a pretty decent 2nd choice it seems SPN Lifer. http://www.flyertalk.com/forum/smile.gif

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~ Glen ~ sipping bubbly from a UA 747-400 exit row 15 near you SOON!

I use my miles for international F and J. Therefore miles are usually worth at least .05 to .10 cents per mile.

[This message has been edited by aceflyer2 (edited Dec 05, 2003).]

I am a psych major
:-)
I use SPSS ,a statistics program, to do my math for me, LOL

so if I am redeeming miles at 1.5c ,minimlly am I wasting my time in the mileage game? I use DL amex and spend probably 15,000 a year, but through always double miles, and double and triples miles promotions end up getting around 25,000 or so a year, for 55 bux that doesn't seem bad, am I wrong?

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">I am a psych major</font> http://www.flyertalk.com/forum/cool.gif You should have plenty of opportunity see the direct application of your studies right here on Flyer Talk. (!)
<font face="Verdana, Arial, Helvetica, sans-serif" size="2">as a college student whose ENTIRE family lives 3,000 miles away, it makes sense, I think?</font>I doubt anyone will disagree with you. Actually using the "free" tickets means you won't be earning further miles on those award trips. But if that's the best use you have for them, who's to argue?

Those who can afford it might find upgrades a more "valuable" (dollar-wise) use of miles. But in your case, perhaps you can "gift" a ticket to a family member to come out and visit you (maybe getting "reimbursed" to a certain extent?) or find other ways to ensure that using the miles (maybe for a friend to accompany you home?) will hurt neither your mileage accrual nor your wallet.

Watch out for professional ticket brokers though, as "selling" miles can lead to confiscation of an entire account. And don't ask me, because I've never done it.

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">so if I am redeeming miles at 1.5c, minimally am I wasting my time in the mileage game? I use DL amex and spend probably 15,000 a year, but through always double miles, and double and triple miles promotions end up getting around 25,000 or so a year, for 55 bux that doesn't seem bad, am I wrong?</font>When I kidded you about your post, I was referring to the first calculation. For a $130 annual fee, the $6500 and $13,000 break-even points for 2¢/mi. and 1¢/mi. were correct.

$55/$.015 = $3666.67 "break even" spending. If you are getting 2 or 3 miles per dollar, that is even better.

If the items would have been purchased anyway, the only cost to you is the annual fee. There are a lot of threads on this topic.

Some of the most knowledgeable people on Flyer Talk are college students, though there is a very good generational mix here.

Thanks for your help! I appreciate you making sense of it for me and I am now just trying to figure out whether to keep my amex preferred rewards green card or my delta card. I can use the green rewards card for a non-stop on southwest to BNA from LAX for 20,000 miles for 110$ a year, or for 55 a year earn 1 ticket from BNA to LAX with 1 stop there and back for a 55$ annual fee. I am just trying to decide if award redemption would be easier with a card
that can trasnfer into MANY FF programs or to stick with delta. I guess since the no pre set spending limit, is not a big deal to me (my delta CL is 14,400), I should just stick with the delta card? I just don't want to earn miles on a card and then when it comes redemption time not be able to use them, ya know?