FlyerTalk Forums - View Single Post - Penny a Mile Through Delta Marketplace a Decent Alternative?
Old May 26, 2010, 4:07 pm
  #7  
bronco2008
 
Join Date: Dec 2008
Location: Midwest
Programs: Delta/Skyteam Platinum Medallion and Million Miler, MR Titanium Elite
Posts: 50
Originally Posted by BigFlyer
OK, I know the title is heresy for many here, but let's look at it dispassionately.

I know there has been discussion re Pay with Miles being a bad deal, but with Pay with Miles you are not getting your full penny a mile value; you don't earn miles on trips you book. So, I'm not talking about that.

But, there are various redemption opportunities at Skymiles Marketplace where you do get a true penny per mile - including gift cards (at places people really shop like Macys, the Gap), as well as the ability to book hotels and rental cars at a penny a mile. I checked the hotel prices against Expedia, and they seemed more or less comparable (sometimes a little more, sometimes a little less.)

My analysis will not include business class awards, which, if you can get one, is probably a better deal than getting the penny a mile. However, I have rarely used them, and never used them since they upped the redemption levels.

So, first example. Let's say I want to fly from San Francisco to Berlin in July (I checked outbound 7 Jul, return 14 Jul.) I can buy a coach ticket via JFK, for $1440.30, and as a Gold I receive double miles. The calculation valuing miles at a penny a mile is therefore $1440 - $261 (26,160 miles at a penny a mile) - $28 (purchasing ticket using Amex Delta) = $1,151. Of course, under this scenario, the miles earned count towards status.

Using miles, the trip is available for 90,000 miles, which then calculates as $900 + $52 (taxes and fees) = $952.

In the above scenario, using miles comes out cheaper by $200 than cash and valuing miles received at a penny a mile. The difference may or may not be worth it, but many of us would prefer to pay the extra and earn the miles towards status.

Now, let's try same city pairs, leaving 6 Oct returning 13 Oct.

Paying cash, the fare is $1,014. The calculation is therefore $1,014 - $261 (26,160 miles at a penny a mile) - $20 = $733.

Using miles, it is still 90,000 miles, for a net cost of $952 using miles. So, using cash comes out $219 cheaper than using miles.

OK, a number of comments on the above;
  • I understand that things could change before October, the cash fare might go down, and the mileage fare might go down as well.
  • I am not saying there is a hard and fast rule here whether using miles or cash valued at a penny a mile is better, I'm simply saying it is a closer question than is generally assumed on this Board. I'm sure we can all find many scenarios that prove or disprove the point.
  • I'm not talking a theoretical value of miles here. You can buy your ticket SFO-TXL in cash, then take your 26,000 miles and get a $260 gift certificate at Macys and spend it.
  • This might not have made sense a few years ago, but with award seats harder to find, and awards getting pricier, sad to say this analysis now makes sense.
  • It's certainly easier and less hassle to find a flight at a convenient time and date using cash than it is using miles. Think of life where you can concentrate on the fun part of planning and going on mileage runs, without the frustrating part of trying to find flights on which you can use miles. Free at last!
+1, Until DL fixes the award calendar (if at all) the market place seems to be a good alternative to burn your miles and get decent value for them as well.
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