Originally Posted by
mooper
If you value miles by their purchasing power of free market goods, then if 25,000 miles + $50 in fees gets you a ticket you would pay $550 for otherwise, they are worth 2 cents each to you. If 35,000 miles + $100 in fees gets you a ticket that you would have paid $800 for, they are still worth 2 cents each. Accordingly, as prices rise but mile redemption levels remain constant, the miles are actually appreciating as a currency.
All that may be true if every flight you plan to take is available both with miles and cash.
However, if you cannot wait to take a flight until it's available on miles, and more of the flights you need to take are not available on miles even when they would be far cheaper on miles, that changes the whole equation. It makes your miles worth less averaged over the cost of all your flights, because you're able to use the savings of using miles less often, and thus your
average savings is less.
So it matters very little what the
theory is of flight costs in cash and miles costs in miles.
Another example: If flights are generally going up in price, but there are still occasional sales (and there, so far), and the flights where you can redeem miles are the same ones that are on sale for cash, then you need to compare against the sale price (not the general trend price)!