FlyerTalk Forums - View Single Post - How to decide to buy a ticket vs us AP points?
Old Jun 25, 2005 | 7:55 am
  #4  
Doc Fraud
 
Join Date: Nov 2003
Location: Toronto, ON, Canada
Programs: SPG - Platinum, Hertz - 5 Star
Posts: 2,387
BB yours is an excellent post! What occured to me as I read it, is that you have also articulated a quantitative method to evaluate the various "User experiences" for 2006.

For example if we look at the SE packages this year I chose pkg # 3 which gives me 2 SWU, 2 SSWU and 100% bonus miles on AC fllights. Based on my travel patterns, I would use the SWU on International flights and SSWU on Transborder Domestic flights.

The value of each of the instruments would be derived from the fare differences (on the routes I fly) between the normal paid C/J class and the lowest available qualifying fare for the certificate. For example if I buy C/J YYZ-MEX I am looking at ~$1900. If I buy B class and use my SWU I can get the same benefit for ~$1200. Therefore each SWU is worth $700.

In the same way I would calculate the value of the SSWU as the difference between C/J on a route like YYZ-SFO where a C/J ticket is ~$2600 and a B class can be had for ~$1100, so for my travel pattern the value of the SWU is $1500. It is true that there is also the less tangible cost of the upgrade lotto on high demand routes like YYZ-SFO, but that is a very personal decision based largely on experience and the confidence in ones ability to game the system.

When I look at the 100K bonus miles, I see applications like 2 North American J tix and 1 shorthaul, or 1 J to Asia or 6 shorthauls for my kids. The value of these combinations is between $3000 for 6 YYZ-YUL or $8000 for J to Asia.

Using the values above the economic benefit of the Experience package I chose is $12,400 which is broken down as follows

2 SWU @ $700 = $1400
2 SSWU @ $1500 = $3000
100K miles = $8000

Total----------------= $12,400

Based on this calculation the economic benefit of the other experience packages would fall well short, so all of the folks who opted for the extra 10K Q miles, paid very dearly for the option.

DF
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