CM,
There are many factors which will forever remain CO confidential that have a bearing on what the true cost of these mile is and how they compare to other purchased miles. Here are I few
1. What is the actual issue rate of miles vs. the purchased option?
Both MrsSG and I each spent $150 for the option to earn 15,000 miles each based on flying 30,000 miles each. We both exceeded the 30,000 EQM's and each earned 15,000 RDM's. I find it very difficult to believe that everyone who purchased an option, will completey fulfill the requirement and earn all of the Bonus Extra Miles. [We'll never know the numbers]
2. How quickly do these miles get used?
Neither we or CO will really ever know the answer to this question although I would venture to guess that CO has a very detailed analysis of the 'mileage float'.
3. The devaluation of the worth of these miles over time has been discussed on other threads and there is no doubt that their value decreases over time.
4. How do these miles compare to the miles that CO sells to promotional users such as Chase Bank and American Express. Again, we don't know the profitability of the miles sold to these programs, but other threads indicate that the price is much less than the $.01 of this program.
5. CO not only continued to offer this promotion again this year but was very willing to allow people who missed the application cut-off date to enroll when the made a request to do so. That would indicate a profitable product.
CO has recently demonstrated that they are willing to take the necessary flack for cutting programs which are not cost effective and there was no indication that this program would be among the future casualties.
There are FT'ers who have enrolled in this program and who would like to see it expanded as is evidenced by the responses do far in the thread but I would venture a guess that those enrollees who will have taken full advantage of their option by year end are in a minority for the program overall.
Another aspect is that we don't know what CO's market penetration is with this product. I'd guess that the percentage of those participating decreases as the level of mileage flown decreases but the population of each layer increases dramatically and that even a lower participation level yields greater revenue and profit.
Anyway, I'll never see CO's books and records so it's all speculation on my part.
My opinion is that for most people, this program is one of CO's equivalents of the banks of slot machines that your employer classes as their one of their most profitable products.
G