FlyerTalk Forums - View Single Post - How Do Airlines Value Miles?

Jul 24, 2004 | 4:06 pm

#16

Sirecca

Join Date: Jun 2004

Programs: No More Loyalty

Posts: 608

Quote:

Originally Posted by JS

For 2003, Delta set aside a liability of $229 million for 10.4 million award tickets. Assuming all of those are the 25,000 mile version, that's $22, or 0.09 cents per SkyMile.

Thanks for the effort, JS. It would be interesting to know the average # of miles redeemed per R/T award ticket, per DL's definition. (Blending in int'l trips, Biz/FC awards, SkyChoice, etc.) I'm guessing it's not just a little but substantially more than 25k.

All in all, not a bad biz model, though. Give away something that costs you very little (especially when carefully managed thru restrictions

) but has a much higher perceived value to the customer.

Maybe these airlines are not such a bad investment here at the bottom....

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