To go back to the subject, "The Value of a Mile", I offer the following anecdote.

I had been keeping an eye on the sales on ebay of the Kellogg's 100 AA mile certificates that appeared on the boxes of cereal, Eggo and other Kellogg's products over the past few years. For those unfamiliar with the program, you had to send them in to Kellogg's in groups of 5, and they'd post 500 miles to your AA account. Sadly, they quit printing the certificates earlier this year, and the last ones (if you can find them) expire tomorrow.

Over the last year (and to a lesser extent before), there was a thriving market in the certificates on ebay. As the supply in circulation appeared to dwindle, prices shot up amazingly! I posted a few links on the AA forum to sales where individual 100-mile certificates went as high as $10. It was not at all unusual to see groups of five certificates bring $25 to $40 (i.e., $5 to $8 per certificate).

Watching the auctions, I noticed that some individuals tended to win the high-priced auctions, while other folks would drop out as the bidding crossed $2 or $2.50 per 100 miles. Out of curiosity, I e-mailed one of the consistent winners of high-priced auctions, and asked whether he or she knew that American would sell miles at ~2.5 cents each.

She (it turned out to be a lady) responded that she was indeed aware of this, and had already bought her annual limit of 15,000 miles from American, and had also signed up for the AAdvantage credit cards to get the bonus miles offered for those cards. She said she remained on the look-out for such offers, so I sent her a link to pgary's wonderful website (if you're reading this, she says "thanks" for all the information, some new to her).

I had originally thought she was simply not aware of the "true" value of miles, but as it turned out she was quite sophisticated in this area, being fully aware that most flyers tend to value the miles at around 2 cents each, or even less. However, she said that, to her, they were worth about 10 cents per mile and she was willing to acquire them when they went for much less than that.

She explained that she is a business executive and vacations annually in Europe or Africa, and when she does so she flies first class for the comfort and convenience. She is also economical within those limits, and thus uses frequent flyer awards wherever possible. To her, it made perfect economical sense to assign a value of 10 cents per mile on the major airlines.

Perhaps this is nothing new, but it does again point up that the value of a mile is in the eye (or pocketbook) of the beholder.