Originally Posted by
Dave Noble
If say redeeming for LHR-SYD , the mileage cost in business class is 185,000 and a paid ticket might be , say, GBP3500 ( c. $4300 ) . This would make it a value per mile of 2.3c - but imo only a valid value if the person would otherwise have paid the $4300 and not purchased an economy ticket or gone on another cheaper airline. If the person would otherwise have paid GBP800 and flown economy or GBP2000 and gone premium economy, then the 185000 would imo only be a saving against that lowe value
I understand where you're coming from, but I don't think using the term "value" in this context is entirely appropriate. I think "savings" is a more appropriate term for what you're talking about. IMHO, the only way to properly calculate value of the miles is by comparing the cost of the same product. If I'm redeeming for business class, I'm getting the value of what a business class seats costs. Whether I am willing to pay cash for that seat or not is irrelevant. I'm getting that seat, so its' value is what the airline charges for it. So if I'm only willing to pay $1,000 cash, which gets me into Y or PE, but I am willing to redeem 185k miles for a J seat which would otherwise have cost me $4,000 means that I'm getting a *
value* of $0.02/mile, but a
*savings* of $.005/mile.
Originally Posted by
nk15
A more conservative mile valuation would be against the cheapest fare on any airline at that time, not any ridiculous amount that AA may charge and nobody will pay....
And yes, to correctly calculate value you should be looking at the cheapest comparable fare. So if I can get a $2,000 J seat on Air SuperSavers (I made that up) that gives me the same amenities and schedule and reliability and all the other things that factor into making an airline decision, then yes, I should be calculating my value against that $2k rather than AA's $4k.