FlyerTalk Forums - View Single Post - On the economics of Mileage runs - or why airline should sell qualification miles
Old Dec 11, 2010, 12:28 pm
  #1  
oshelef
 
Join Date: Nov 2010
Posts: 639
On the economics of Mileage runs - or why airline should sell qualification miles

So I'm fairly new, but I'm an economist. And I can't help but think that mileage runs are a waste. Not a waste to you when you do one, but a waste in total. You'd rather pay for your ticket and not fly. And the airline would rather take your money and sell the seat to someone else. So it seems that the airlines would be better off if they sold qualifications miles/segments. They'd be relatively expensive, but they'd be worth it.

It seems like the airfare involved on most runs is about 5-15 cents per qualification mile. Plus your time of being in the airport/on the plane. An hour for every 500 miles seems low, but not unreasonable. If an hour of your time is worth $25 (probably low for someone who flies enough to want to do a mileage run) that's another 5 cents per mile.

So who would pay 10 cents (20 cents? 30cents?) for a qualification mile (on whatever airline)?

Airlines could limit the amount you buy so that you can't directly buy status unless you travel enough - say you could only buy 10% of the threshold. Although they might not care - if you are willing to pay $2,500 for a status level seems like they would come out ahead. Either you fly enough to make it worth it, in which case you would have earned it anyway. Or you don't fly much so the status benefits you get aren't worth much.


(if this isn't the right place to post please move).
oshelef is offline