This post has appeared elsewhere, but I'm reposting it so that we can get some others opinions
The Official Frequent Flyer Guidebook, 7 ed.
Randy, great publication. My favorite part is the Comparison at-a-glance section, especially the Elite-level comparison, upgrade and threshold bonus charts. Very handy for quick reference. Worth the money.
I would however like to bring up a point of discussion.
It's concerning The Taxation of Frequent Flyer Miles section, under the section Valuation (page 90).
I agree with the statement:
"Clearly, an award has less value than a full-fare coach ticket."
I do however disagree with the statement that immediately follows it.
"In fact, even the lowest discount fares exceed the fair market value of award travel."
I have redeemed awards on several airlines over the years and I always place a higher value on an award ticket then a LOWEST DISCOUNT fare. That's because an award ticket is changeable, within the same award level, in terms of dates, times, flights, etc;
My plans are as steady as the wind
When I book a lowest discounted fare, I'm often (very often) toasted. I can't tell you how many 100$ "fines" I've paid, for changing ticket times/dates. (That's the price you pay when you pay your own travel expenses and can't always justify a J class fare)
However, an award level ticket is constantly changeable (for up to a year usually) and I find the convenience worth it's wait in gold. As an example, because of unsteady commitments, I once carried a YUL-DTW award for three months constantly changing the dates form one week to the next.
Personally, I value airline miles/points at 0.02 (even though I usually receive values of 0.033). So, while a 500$ flight is equivalent to 25K miles, [benefits equaling the costs (25,000 x 0.02)], I would still view the 25K as more valuable.
As an example: Let's say I wanted to eventually visit Friend A who lives in a city where the airfare to get there costs a fixed 500$ (non-refundable) or 25K miles but that I had no FF miles in any account. Let's also say that a bonus offer came up where I could fly to a totally different city (City X) for 500$ AND earn 25K in FF miles. I would fly to City X for 500$, earn the 25K, and then use the 25K to visit Friend A. Why? Because now, that airplane ticket to visit Friend A is flexible and changeable (and even a re-deposit of points would cost 50$ rather than the 100$ charge for changing discounted tickets). So, if either Friend A or I, for whatever reason, decide that next week would be better . . . no problem if I'm holding an award ticket.
Maybe the original statement "even the lowest discount fares exceed the fair market value of award travel," which I disagree with had a purpose which came from a different angle, and I have misunderstood. In that case I'd be interested in others points and opinions.
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