Originally Posted by
roadtripman
Where on Earth did you get that errant idea from? Miles are valued at MUCH more than 1 cent per mile. The actual monetary value for buying miles on AA.com is 4 cents per mile ($1000 for 40,000 miles). However, the actual value of a mile is usually thought of as between 2 and 3 cents. I use 2.7 cents per mile as my baseline.
Your one cent per mile is almost impossible - no one will give you miles for that cheap, and if you find that out, let me know where you are looking.
Imagine, a Europe coach ticket for 40,000 miles only being worth $400 - No, sorry buddy.
It IS true that miles are often valued at only one cent apiece (this is REDEMPTION value, not PURCHASE value -- it is really erroneous to value them in terms of how much you pay to BUY them!!!). And there are a lot of ways to redeem them that yield LESS than one cent per mile. At the same time, you can in fact at times redeem them at a value of quite a bit MORE than one cent per mile (e.g., international premium class saver air awards).
Bottom line, though: even our illustrious founder, Randy Petersen himself, often uses the "one cent per mile" approximation. @:-)
Anyhow, the valuation of miles is something that has been discussed on zillions of other threads, on the MilesBuzz and various airline forums, so it's probably veering way off-topic for this forum. Go take a look at those forums for further discussion.
The point remains (it's a valid one) that e-rewards "dollars" are a "currency" that is usually worth less in real dollars than their nominal value. I value 3,000 HHonors points at about $20 in redemption value, but it costs $50 in e-rewards currency to get that $20 worth of points. @:-)