Originally Posted by MileKing
Would you have paid $10K from your pocket for a business class seat? Would you have paid $2500 from your pocket for a coach seat? If not, it's very hard to make the argument that miles are worth 8 cents each ($10K / 130K miles).
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Given the reduction in award seat availability and all the restrictions airlines have placed on award tickets over the past few year, it is "old think" to value miles at anything above 2 cents each, and even that would be high. Even Randy doesn't value them at 2 cents any more.
1) I did not claim a value of 8 cents a mile.
2) If you would have read what I wrote, the ECONOMY CLASS FARE yields a value of 2 cents per mile. I have to go to Oz in this time, so I'm saved $5K. The marginal value of business class to me is, clearly, less than $10K per ticket...but if I could spend an extra $500 to $1000 I would in a flash. Thus, the real value of miles is something higher than 2 cents per mile.
3) The poster claimed 2 cents a mile was not a supportable valuation
Two cents a mile is a reasonably conservative valuation of miles IF the person spending the currency is reasonably clever. No one is holding a gun to people's heads and making them blow 25K miles on a trip from Austin to New York rather than 35K miles from Austin to Kona, for example.