Here's an interesting twist on using FFP miles on business travel. I've never done anything like this, but I'm curious to think what others think of the ethical and legal (income tax) implications.

Suppose my company needs to fly me somewhere, and the ticket costs $1,000. I book the flight (paid for out of pocket by personal C/C, to be reimbursed). Knowing that this trip is very unlikely to get canceled, I go ahead and book a trip to the same destination with 25,000 FFP miles. Maybe it's on the same airline; maybe not. Maybe the departure and return times are not precisely identical, but I structure the travel so that the company will get the same amount of work time from me at the destination. (That is an important point.) Any incremental travel costs associated with the alternate itinerary, such as extra night of hotel stay, I pay out of pocket.

I've just effectively converted 25,000 FFP miles into $1,000 worth of fare basis exchangeable for other travel on the same airline. (Granted, the $1,000 worth of fare basis isn't nearly as liquid as $1,000 cash, but if I know I travel a lot on this airline, it's almost as liquid. There are also issues about whether the fare basis can be applied to more than one itinerary later, which may also reduce liquidity, but let's ignore those logistics for now.)

- Is this fair to the airline? They probably don't really care about this kind of thing on an individual basis. While their intent is to get business travelers with their relative price inelasticity to pay higher prices by how they structure fares, I haven't violated any rules of carriage. If millions of people started doing this regularly, they'd probably look to structure their rules differently to block it en masse in the future, but I don't expect that an individual would get into trouble for doing this.

- Is this fair to the company? They paid the same amount of money for my travel that they otherwise would have; they get the same amount of work out of me that they otherwise would have. I feel kinda funny about the situation, but I sort of think that the company isn't being cheated here.

- Is this legal? Should the $1,000 then be somehow counted as income? Probably not, but you never know with the IRS, which gets to presume you guilty until proven innocent.

Thoughts?

Do your thoughts change in the following alternate scenarios? (Call my initial scenario Scenario 1.)

- Scenario 2. Since I paid for the $1,000 ticket out of pocket, what if it was a refundable ticket and I have it refunded to my C/C 11 months later, before the fare basis expires, but still had submited the initial purchase for reimbursement? (This definitely seems slimier, but I can't quite decide why. The company is no better or worse off, really. The airline is out the $1,000, but they're not entitled to the $1,000; on a refundable ticket, they should only get the $1,000 for actually delivering the services, and I never actually used the services purchased with that $1,000.)

- Scenario 3a. What if I purchased a $300 ticket (with a Saturday night stay-over, let's say) instead of using 25,000 FFP miles?
- Scenario 3b. What if I also then ask for the $1,000 refundable ticket to be refunded?
Then there are no miles involved at all, just an extra $700 in my pocket. Assume that the company policy is not to ask employees to stay over Saturday nights on business trips.

Looking forward to a lively thread.