New policy for paid and miles upgrades (AF/KL) - sept 2017
Feb 2, 2019, 5:39 pm
#646
FlyerTalk Evangelist
Join Date: Feb 2000
Location: London, UK and Southern France
Posts: 18,368
That one-way flight CDG-LAX for which you pay 200,000 miles cost about EUR 8,000 (sometimes 6,800, sometimes >10,000), on a roundtrip basis. As you say, a Plat needs to spend EUR 25,000 to have enough miles for such a flight. I find that an excellent deal: Pay 25,000 EUR, get something worth EUR 8,000 on top. Buy three, get one free - where else do you have that?
The problem with value and airline miles is that airline miles are sometimes used to "purchase" products that we would never pay for at their cash price because we regard that cash price as far exceeding what we are willing to pay, in other words, what we think the product is worth, i.e. its value.
So, yes, if you are willing to buy a P class flight for €8000 and routinely do so, then undoubtedly it is a cracking deal and can indeed be described as "buy 3 get one free". If you would never dream of paying €8,000 for a P class flight, then I do not think that it can realistically be said that you get a value of €8000 out of your P flight. and it would be misleading describing this as "buy 3 get one free" as you would never buy one, let alone 3, because you think that the product simply is not worth that.
Feb 2, 2019, 6:10 pm
#647
Join Date: Apr 2005
Programs: Eurostar Carte Blanche, SBB-CFF-FFS GA-AG, SNCF Grand Voyageur LeClub
Posts: 7,837
I find calculation of value that equate the value of a redemption to the price of the fare somewhat problematic.
The problem with value and airline miles is that airline miles are sometimes used to "purchase" products that we would never pay for at their cash price because we regard that cash price as far exceeding what we are willing to pay, in other words, what we think the product is worth, i.e. its value.
So, yes, if you are willing to buy a P class flight for €8000 and routinely do so, then undoubtedly it is a cracking deal and can indeed be described as "buy 3 get one free". If you would never dream of paying €8,000 for a P class flight, then I do not think that it can realistically be said that you get a value of €8000 out of your P flight. and it would be misleading describing this as "buy 3 get one free" as you would never buy one, let alone 3, because you think that the product simply is not worth that.
The problem with value and airline miles is that airline miles are sometimes used to "purchase" products that we would never pay for at their cash price because we regard that cash price as far exceeding what we are willing to pay, in other words, what we think the product is worth, i.e. its value.
So, yes, if you are willing to buy a P class flight for €8000 and routinely do so, then undoubtedly it is a cracking deal and can indeed be described as "buy 3 get one free". If you would never dream of paying €8,000 for a P class flight, then I do not think that it can realistically be said that you get a value of €8000 out of your P flight. and it would be misleading describing this as "buy 3 get one free" as you would never buy one, let alone 3, because you think that the product simply is not worth that.
It's simple math: you pay EUR 25,000. For that you get 200,000 miles. For those 200,000 miles you get an award in P. That award is worth EUR 8,000. Total cash value of goods/services obtained: EUR 33,000. Cash paid: EUR 25,000. Equivalent to a discount of 24,24%.
Whether the P award has EUR 8,000 value to you and whether you would have spent those EUR 8,000 instead of using 200,000 miles or whether you'd rather then not travel in P at all, that depends on your personal indifference curve. But it doesn't change the earn ratio (8 miles per EUR 1 spent) and the cash market price of the award. That was my response to the poster who complained that one would need to spend EUR 50,000 to have enough miles for a Premiere award - to which I replied by showing that it's actually a very good deal given that for every EUR 1 spent he gets cash value of EUR 1,33. I do not find that a bad deal.
If you don't value a Premiere award you are of course free to use any other award and run the same maths: an Affaires award for 67,500 miles. That award has a market price of, say, EUR 2,400. To have 67,500 miles costs you EUR 8,437. End result: you pay EUR 8,437, you obtain goods/services worth EUR 8,437+EUR 2400=10,837. Discount still 22%.
And so on. I presume you'll find that Premiere award, whilst very expensive in absolute terms, are in fact a bargain in terms of earn/burn ratio.
...of course only as long as you get these low-priced awards. Which isn't a problem in March, but impossible during vacation time. And therein lies the unattractiveness of Flying Blue: dynamic pricing makes some tickets ridiculously expensive. Whilst on some days you can have a Premiere award there are others where the Affaires award for the same route is 370,000 miles. Nuts.
Feb 2, 2019, 7:56 pm
#648
Join Date: May 2018
Posts: 761
Not entirely sure I understand your argument...
It's simple math: you pay EUR 25,000. For that you get 200,000 miles. For those 200,000 miles you get an award in P. That award is worth EUR 8,000. Total cash value of goods/services obtained: EUR 33,000. Cash paid: EUR 25,000. Equivalent to a discount of 24,24%.
Whether the P award has EUR 8,000 value to you and whether you would have spent those EUR 8,000 instead of using 200,000 miles or whether you'd rather then not travel in P at all, that depends on your personal indifference curve. But it doesn't change the earn ratio (8 miles per EUR 1 spent) and the cash market price of the award. That was my response to the poster who complained that one would need to spend EUR 50,000 to have enough miles for a Premiere award - to which I replied by showing that it's actually a very good deal given that for every EUR 1 spent he gets cash value of EUR 1,33. I do not find that a bad deal.
If you don't value a Premiere award you are of course free to use any other award and run the same maths: an Affaires award for 67,500 miles. That award has a market price of, say, EUR 2,400. To have 67,500 miles costs you EUR 8,437. End result: you pay EUR 8,437, you obtain goods/services worth EUR 8,437+EUR 2400=10,837. Discount still 22%.
And so on. I presume you'll find that Premiere award, whilst very expensive in absolute terms, are in fact a bargain in terms of earn/burn ratio.
...of course only as long as you get these low-priced awards. Which isn't a problem in March, but impossible during vacation time. And therein lies the unattractiveness of Flying Blue: dynamic pricing makes some tickets ridiculously expensive. Whilst on some days you can have a Premiere award there are others where the Affaires award for the same route is 370,000 miles. Nuts.
It's simple math: you pay EUR 25,000. For that you get 200,000 miles. For those 200,000 miles you get an award in P. That award is worth EUR 8,000. Total cash value of goods/services obtained: EUR 33,000. Cash paid: EUR 25,000. Equivalent to a discount of 24,24%.
Whether the P award has EUR 8,000 value to you and whether you would have spent those EUR 8,000 instead of using 200,000 miles or whether you'd rather then not travel in P at all, that depends on your personal indifference curve. But it doesn't change the earn ratio (8 miles per EUR 1 spent) and the cash market price of the award. That was my response to the poster who complained that one would need to spend EUR 50,000 to have enough miles for a Premiere award - to which I replied by showing that it's actually a very good deal given that for every EUR 1 spent he gets cash value of EUR 1,33. I do not find that a bad deal.
If you don't value a Premiere award you are of course free to use any other award and run the same maths: an Affaires award for 67,500 miles. That award has a market price of, say, EUR 2,400. To have 67,500 miles costs you EUR 8,437. End result: you pay EUR 8,437, you obtain goods/services worth EUR 8,437+EUR 2400=10,837. Discount still 22%.
And so on. I presume you'll find that Premiere award, whilst very expensive in absolute terms, are in fact a bargain in terms of earn/burn ratio.
...of course only as long as you get these low-priced awards. Which isn't a problem in March, but impossible during vacation time. And therein lies the unattractiveness of Flying Blue: dynamic pricing makes some tickets ridiculously expensive. Whilst on some days you can have a Premiere award there are others where the Affaires award for the same route is 370,000 miles. Nuts.
So your calculations are not correct anymore when you consider a return. That being said, I don’t have a problem with P being 200.000. The reality is that many routes cost 320.000 miles. One way! I don’t see much value in that.
Example: a round trip in P Europe-HKG on 10-17 April costs 5.122 euro. But it costs 640.000 miles as an award ticket. So you need to have spent 80.000 euro’s in order to have earned 640.000 miles. And that’s even without the taxes. So probably you needed to have spent 85.000-90.000 euro. These are 16 P round trips. Is it then really good value? Buy 16, get one for free? I don’t think so.
And we both agree that dynamic award calculations are nuts.
Feb 3, 2019, 2:22 am
#649
Join Date: Apr 2005
Programs: Eurostar Carte Blanche, SBB-CFF-FFS GA-AG, SNCF Grand Voyageur LeClub
Posts: 7,837
I do agree with you when you calculate a one way tickef. La Premiere for 200.000 miles is high but as you calculated, reasonable. And J for 67.500 too. But the whole bottom line is that one way tickets are NOT reasonable. The fare for a one way ticket is often the same or even higher compared to a return. So your calculations are not correct anymore when you consider a return.
I took *your* example of a Premiere ticket of 200,000. Plus: the example I gave was after having looked up the fare on a roundtrip basis.
cost about EUR 8,000 (sometimes 6,800, sometimes >10,000), on a roundtrip basis.
That being said, I don’t have a problem with P being 200.000. The reality is that many routes cost 320.000 miles. One way! I don’t see much value in that.
Example: a round trip in P Europe-HKG on 10-17 April costs 5.122 euro. But it costs 640.000 miles as an award ticket. So you need to have spent 80.000 euro’s in order to have earned 640.000 miles. And that’s even without the taxes. So probably you needed to have spent 85.000-90.000 euro. These are 16 P round trips. Is it then really good value? Buy 16, get one for free? I don’t think so.
And we both agree that dynamic award calculations are nuts.
Example: a round trip in P Europe-HKG on 10-17 April costs 5.122 euro. But it costs 640.000 miles as an award ticket. So you need to have spent 80.000 euro’s in order to have earned 640.000 miles. And that’s even without the taxes. So probably you needed to have spent 85.000-90.000 euro. These are 16 P round trips. Is it then really good value? Buy 16, get one for free? I don’t think so.
And we both agree that dynamic award calculations are nuts.
Just what I said: it depends what you spend your miles on, and what the availability is on the days that you look to travel. It can be a very good deal. It can be a horrible deal. Dynamic pricing will make the difference. Flying Blue will always point out the first set of examples. Moaners will always point out the second set of examples.
Summary, the program can have some attractive constellations, which is just what I said in my initial statement about this topic:
Depends how you look at it.
Both Flying Blue and M&M have moved to spending-based mileage credits. That sucks for people who fly on inexpensive fares and/or have low status and/or want to qualify for status with segments, no doubt.
However, for frequent travelers that have status and with certain travel patterns, the changes are not that bad. I usually end up with many more miles on my intercontinental flights than I used to in the past.
(...)
On the burn side, things look a little different:
(...)
Availability is of course a different issue. Flying Blue does make seats available, but sometimes prices are really crazy.
Last edited by San Gottardo; Feb 3, 2019 at 6:31 am
Feb 3, 2019, 7:02 am
#650
FlyerTalk Evangelist
Join Date: Feb 2000
Location: London, UK and Southern France
Posts: 18,368
IMO, this is not so much "simple" math as false maths because you put two entirely different things on both sides of the equation ("price" and "value") and treat them as if they were the same thing.
This is a non sequitur. Yes, the earn ratio is 8 miles per EUR 1 spent and yes the cash price for a the P ticket that you can obtain by an award resulting from spending €25K would be €8K. It does not follow from this that one gets a cash value of €1.33 for every € spent.
Let me take an example: let us assume that for each return P ticket at €16000, you will get as a reward 1 million Mitry-Claye to Garges-Sarcelles RER tickets. Does that mean that you get a value of just shy of € 10 Million with your reward since a single Mitry-Claye to Garges-Sarcelles RER ticket is €9.80? Of course not.
Let me take another example. My local supermarket used to stock a decent enough but far from exceptional Primitivo. Most of the time, they sold it at £8.99. On a fairly regular, they would run a "promotion" whereby the wine would be sold at £5.99. Now, at £8.99, I would never buy the wine as it seemed to me way overpriced. At £5.99, I would as it seemed to me a reasonable price for the quality of the wine. Does that mean that, when I bought the wine at £5.99, I was getting £8.99 worth of value? Of course not.
I would be able to extract a cash value of €1.33 for every € spent if I was able to sell my award to somebody else for €8000. But I am not. Therefore, the value of the award is how valuable it is to me it is and how we determine the cash equivalent of that (the cash value of the award) is by determining what amount of cash I would be prepared to pay for it. It is wrong to equate the value of a P award to the cash price of a commercial P ticket on the same route as this is confusing price and value.
Now, for some people it will indeed be that: these are the people who genuinely value the P flight at €8000, that is to say those who are happy to pay that price. In that situation, you are genuinely extracting €1.33 for every €1.00 spent.
If you are not willing to pay that price out of your own pocket for a P flight, then that means that you do not consider that the flight is worth €8000. You are not therefore getting €8000 worth of flight by redeeming for a P flight. You are getting the worth corresponding to the price that you would be willing to pay for that P flight.
This is the same kind of mistake as valuing high end credit cards by adding the cost of obtaining all the perks that go with them, without consideration of whether those perks are of any use to the individual concerned or whether similar products to these perks could be obtained elsewhere for a fraction of the cost.
These kinds of calculation almost invariably lead to grossly over-valuing perks. Your calculations would lead to valuing FB points at 4 euro-cents per point (€8K/200K FB miles). That valuation works is you normally pay 8K for a P flight and use miles to replace that expense. In most other cases, however, it simply does not and constitutes a huge over-valuation of FB points.
But it doesn't change the earn ratio (8 miles per EUR 1 spent) and the cash market price of the award. That was my response to the poster who complained that one would need to spend EUR 50,000 to have enough miles for a Premiere award - to which I replied by showing that it's actually a very good deal given that for every EUR 1 spent he gets cash value of EUR 1,33.
Let me take an example: let us assume that for each return P ticket at €16000, you will get as a reward 1 million Mitry-Claye to Garges-Sarcelles RER tickets. Does that mean that you get a value of just shy of € 10 Million with your reward since a single Mitry-Claye to Garges-Sarcelles RER ticket is €9.80? Of course not.
Let me take another example. My local supermarket used to stock a decent enough but far from exceptional Primitivo. Most of the time, they sold it at £8.99. On a fairly regular, they would run a "promotion" whereby the wine would be sold at £5.99. Now, at £8.99, I would never buy the wine as it seemed to me way overpriced. At £5.99, I would as it seemed to me a reasonable price for the quality of the wine. Does that mean that, when I bought the wine at £5.99, I was getting £8.99 worth of value? Of course not.
I would be able to extract a cash value of €1.33 for every € spent if I was able to sell my award to somebody else for €8000. But I am not. Therefore, the value of the award is how valuable it is to me it is and how we determine the cash equivalent of that (the cash value of the award) is by determining what amount of cash I would be prepared to pay for it. It is wrong to equate the value of a P award to the cash price of a commercial P ticket on the same route as this is confusing price and value.
Now, for some people it will indeed be that: these are the people who genuinely value the P flight at €8000, that is to say those who are happy to pay that price. In that situation, you are genuinely extracting €1.33 for every €1.00 spent.
If you are not willing to pay that price out of your own pocket for a P flight, then that means that you do not consider that the flight is worth €8000. You are not therefore getting €8000 worth of flight by redeeming for a P flight. You are getting the worth corresponding to the price that you would be willing to pay for that P flight.
This is the same kind of mistake as valuing high end credit cards by adding the cost of obtaining all the perks that go with them, without consideration of whether those perks are of any use to the individual concerned or whether similar products to these perks could be obtained elsewhere for a fraction of the cost.
These kinds of calculation almost invariably lead to grossly over-valuing perks. Your calculations would lead to valuing FB points at 4 euro-cents per point (€8K/200K FB miles). That valuation works is you normally pay 8K for a P flight and use miles to replace that expense. In most other cases, however, it simply does not and constitutes a huge over-valuation of FB points.
Feb 3, 2019, 11:31 am
#651
Join Date: Apr 2005
Programs: Eurostar Carte Blanche, SBB-CFF-FFS GA-AG, SNCF Grand Voyageur LeClub
Posts: 7,837
But we weren't discussing your personal indifference curve, but the statement made by BobTL that he finds it outrageous that to obtain a P award for 200,000 miles a Platinum member needs to spend EUR 25,000. My response is that this is a good deal, as the P award has a value of around EUR 8,000. So I am putting EUR and EUR on both sides of the equation. The thing inbetween is "miles"...
...and that is where there is a variable exchange rate: spending EUR 25,000 always gives you 200,000 miles. If you spend those 200,000 miles on a P ticket that would otherwise cost EUR 8,000, then the "value" (= market value/cash value/the price for which this product is sold in EUR/etc) of that is EUR 8,000. And so you end up having paid 25,0000 for tickets that you bought, and you got those tickets PLUS you got another ticket that is worth EUR 8,000. In sum you have gotten the equivalent of EUR 33,000 of tickets, but have paid only EUR 25,000. That is equivalent to an (almost) 25% discount or equivalent to getting tickets worth EUR 1.33 for every EUR 1 that you spend. It really is simple maths.
This is a non sequitur. Yes, the earn ratio is 8 miles per EUR 1 spent and yes the cash price for a the P ticket that you can obtain by an award resulting from spending €25K would be €8K. It does not follow from this that one gets a cash value of €1.33 for every € spent.
Let me take an example: let us assume that for each return P ticket at €16000, you will get as a reward 1 million Mitry-Claye to Garges-Sarcelles RER tickets. Does that mean that you get a value of just shy of € 10 Million with your reward since a single Mitry-Claye to Garges-Sarcelles RER ticket is €9.80? Of course not.
I wasn't trying to establish a universally valid formula that at Flying Blue for Plats EUR 1 of spend always gets them EUR 1.33 of cash equivalent value. But they do sometimes, in the example of the case that BobTL used (EUR 25,000 to get 200,000 miles).
Let me take another example. My local supermarket used to stock a decent enough but far from exceptional Primitivo. Most of the time, they sold it at £8.99. On a fairly regular, they would run a "promotion" whereby the wine would be sold at £5.99. Now, at £8.99, I would never buy the wine as it seemed to me way overpriced. At £5.99, I would as it seemed to me a reasonable price for the quality of the wine. Does that mean that, when I bought the wine at £5.99, I was getting £8.99 worth of value? Of course not.
I would be able to extract a cash value of €1.33 for every € spent if I was able to sell my award to somebody else for €8000. But I am not. Therefore, the value of the award is how valuable it is to me it is and how we determine the cash equivalent of that (the cash value of the award) is by determining what amount of cash I would be prepared to pay for it. It is wrong to equate the value of a P award to the cash price of a commercial P ticket on the same route as this is confusing price and value.
These kinds of calculation almost invariably lead to grossly over-valuing perks. Your calculations would lead to valuing FB points at 4 euro-cents per point (€8K/200K FB miles). That valuation works is you normally pay 8K for a P flight and use miles to replace that expense. In most other cases, however, it simply does not and constitutes a huge over-valuation of FB points.
Feb 3, 2019, 6:23 pm
#652
FlyerTalk Evangelist
Join Date: Feb 2000
Location: London, UK and Southern France
Posts: 18,368
Sorry, the maths is correct - until you decided that "value" wasn't market value/cash value/the price for which this product is sold in EUR/etc but the value it has to you when you have a choice between spending this market value/cash value/the price/etc on a P ticket or on something else.
What San Gottardo calls the "market value" or "cash value" is not the value of the product, it is its price. Now, it is true that, for certain purposes, we establish valuations of a product based on its price. For accounting purposes, for instance, we will normally use the price as the basis possibiy subject to a depreciation/appreciation according to certain criteria. For customs purposes, we will also sometimes use the price of a product as the basis for calculating duties, although there are complication sometimes. But none of this means that the value of the product is its price. The value of a product is inherently bound to the utility of the product for the user.
But we weren't discussing your personal indifference curve, but the statement made by BobTL that he finds it outrageous that to obtain a P award for 200,000 miles a Platinum member needs to spend EUR 25,000. My response is that this is a good deal, as the P award has a value of around EUR 8,000. So I am putting EUR and EUR on both sides of the equation. The thing inbetween is "miles"...
Please explain how EUR 33,000 / EUR 25,000 is not 1.32 (you're in fact right, it's not 1.33, but 1.32).
Not sure what that example is trying to prove. That EUR 1 spent has a different value depending on which award you select? Yes, of course.
Feb 4, 2019, 1:09 am
#653
Join Date: Apr 2005
Programs: Eurostar Carte Blanche, SBB-CFF-FFS GA-AG, SNCF Grand Voyageur LeClub
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I think it‘s clear to everybody that when I write „market value/cash value/price for which the product is sold“ I do not mean the happiness or usefulness that it gives to the purchaser. It means exactly what I wrote: market value, cash value, price for which the product is sold. All of those are measured in Euros/USD/GBP... I am familiar with the concept of economic value (which is what you seem to mean by value and you insist on saying that I also mean), and as I re-iterared several times that is not what is meant. I really meant what I wrote, market value, which is the price at which an asset trades.
If you still want to insist that I mean economic value instead of market value although I explained and re-explained what I meant (and that meaning is not contradicting any dictionary or economic theory) and despite me being precise which meaning of « value » I mean after you had raised the point in an earlier post, feel free. Otherwise you could also just have said « the term value could be misunderstood, just replace it by the word ‘market value’ or ‘price’ and it will not be misunderstood ». I don’t mix up price with value. I wrote market value/cash value. You seem to have picked only the term « value » and equated it to economic value, which I insisted I do not mean and I made an effort to be precise and used the term market value/cash value.
The fact remains that for the example given by BobTL, for tickets that cost EUR 33,000 one only pays EUR 25,000 when using miles to obtain the ticket that when purchased in cash costs 8,000. And the maths remains really simple: 33,000/25,000=1.32. All in EUR. A discount of close to 25%. Which answers his question about it being a bad deal having to spend EUR 25,000 to obtain something which he otherwise would need to spend EUR 33,000 to obtain. What is wrong with that maths?
If you still want to insist that I mean economic value instead of market value although I explained and re-explained what I meant (and that meaning is not contradicting any dictionary or economic theory) and despite me being precise which meaning of « value » I mean after you had raised the point in an earlier post, feel free. Otherwise you could also just have said « the term value could be misunderstood, just replace it by the word ‘market value’ or ‘price’ and it will not be misunderstood ». I don’t mix up price with value. I wrote market value/cash value. You seem to have picked only the term « value » and equated it to economic value, which I insisted I do not mean and I made an effort to be precise and used the term market value/cash value.
The fact remains that for the example given by BobTL, for tickets that cost EUR 33,000 one only pays EUR 25,000 when using miles to obtain the ticket that when purchased in cash costs 8,000. And the maths remains really simple: 33,000/25,000=1.32. All in EUR. A discount of close to 25%. Which answers his question about it being a bad deal having to spend EUR 25,000 to obtain something which he otherwise would need to spend EUR 33,000 to obtain. What is wrong with that maths?
Last edited by San Gottardo; Feb 4, 2019 at 1:37 am
Feb 4, 2019, 3:12 am
#654
Join Date: May 2018
Posts: 761
The fact remains that for the example given by BobTL, for tickets that cost EUR 33,000 one only pays EUR 25,000 when using miles to obtain the ticket that when purchased in cash costs 8,000. And the maths remains really simple: 33,000/25,000=1.32. All in EUR. A discount of close to 25%. Which answers his question about it being a bad deal having to spend EUR 25,000 to obtain something which he otherwise would need to spend EUR 33,000 to obtain. What is wrong with that maths?
Feb 4, 2019, 7:53 am
#655
Join Date: Apr 2005
Programs: Eurostar Carte Blanche, SBB-CFF-FFS GA-AG, SNCF Grand Voyageur LeClub
Posts: 7,837
To this:
You were the one that picked the example of 200,000 miles for a oneway award.
I was then just running the maths. If for those 200,000 miles you get an award in P where the leg would have cost EUR 8,000 (priced on a roundtrip basis), that would mean that you pay those EUR 25,000 that you mention on something that costs EUR 8,000 coming on top of those EUR 25,000. At that ratio (note the qualification) it's not a bad deal.
I agree with everything you say: you didn't say that 200,000 was too high, I agree that oneway fares are too high (which is why I had looked up roundtrip), and all the other things you said in prior posts about the dynamic pricing logic of FB making it usually unattractive.
Just to re-iterate: the numbers I looked up were for a return journey. I just looked up another date just to check my initial calculation. Thus, roundtrip (not oneway!) for CDG-LAX-CDG costs EUR 6,548 for the outbound and EUR 7,732 inbound. You see, I did not inflate the EUR value by looking at a oneway ticket. I did check for round trip fares, picking flights that can be obtained for 200,000 miles (resp. 400,000 for the roundtrip). The total cost of the ticket is EUR 14,280 - and you have to spend EUR 50,000 on fares to get enough miles for that. That means that you spend EUR 50,000 to obtain tickets with a market value of EUR 64,280. In this case, every EUR 1 you spend on fares gives you purchasing power of EUR 1.28. Probably one of the better deals of Flying Blue. Admittedly, very few people spend 50k on air fares, but it’s the earn/burn ratio which I am commenting, not the absolute amount of money.
On the other end you have things such as, for instance, earning enough miles for a European roundtrip award for a Blue/Ivory member. Cheapest Euro returns cost 17,000 miles, and can be bought for EUR 125. To get 17,000 miles an Ivory (or is it Blue?) member needs to spend EUR 4,250 on fares. To then get an award with a market value of EUR 125. That's a purchasing power of EUR 1.03 for every EUR 1 spent. Terribly bad deal.
In any case, I think we are aligned.
I was then just running the maths. If for those 200,000 miles you get an award in P where the leg would have cost EUR 8,000 (priced on a roundtrip basis), that would mean that you pay those EUR 25,000 that you mention on something that costs EUR 8,000 coming on top of those EUR 25,000. At that ratio (note the qualification) it's not a bad deal.
plus I never said that 200.000 miles for a La Premiere award was too high. I only think one way fares in general are too high. You can not compare a too high fare in relation to x-amount of miles and then say it's good value.
Just to re-iterate: the numbers I looked up were for a return journey. I just looked up another date just to check my initial calculation. Thus, roundtrip (not oneway!) for CDG-LAX-CDG costs EUR 6,548 for the outbound and EUR 7,732 inbound. You see, I did not inflate the EUR value by looking at a oneway ticket. I did check for round trip fares, picking flights that can be obtained for 200,000 miles (resp. 400,000 for the roundtrip). The total cost of the ticket is EUR 14,280 - and you have to spend EUR 50,000 on fares to get enough miles for that. That means that you spend EUR 50,000 to obtain tickets with a market value of EUR 64,280. In this case, every EUR 1 you spend on fares gives you purchasing power of EUR 1.28. Probably one of the better deals of Flying Blue. Admittedly, very few people spend 50k on air fares, but it’s the earn/burn ratio which I am commenting, not the absolute amount of money.
On the other end you have things such as, for instance, earning enough miles for a European roundtrip award for a Blue/Ivory member. Cheapest Euro returns cost 17,000 miles, and can be bought for EUR 125. To get 17,000 miles an Ivory (or is it Blue?) member needs to spend EUR 4,250 on fares. To then get an award with a market value of EUR 125. That's a purchasing power of EUR 1.03 for every EUR 1 spent. Terribly bad deal.
In any case, I think we are aligned.
Last edited by San Gottardo; Feb 4, 2019 at 9:26 am
Feb 4, 2019, 10:09 am
#656
Join Date: Apr 2005
Programs: AF/KL FB Plat ; A3 Gold ; HH Gold ; IHG Plat Amb
Posts: 2,381
I would not look much at the public fares to determine the value of miles earned. I would look at how much cash I would be ready to pay instead of redeeming an award ticket.
For first class to USA East Coast, I would perhaps pay 1000 EUR + tax one way and 1500 EUR to far east Asia or South America, since indeed I bought such tickets cash with special offers (not on AF though). So 200k/320k miles offset 1000/1500 EUR in my "personal value book", so 1000 miles are worth 5 EUR for me if I redeem them on AF F.
For Business class, I would pay 600 EUR+tax to USA one way, 800 to Far East Asia. An award is 50k to USA or 90k to Asia more or less, that makes 1000 miles worth 9-12 EUR.
I know that most of the time, when I can get a round trip to USA in J for 100-120k miles the retail price for a cash ticket can be 3000 EUR or even much more if I need one way or don't spend saturday night there but since I would not buy such ticket cash at this price, I should not consider it as a 3000 EUR saving but rather what I would be ready to spend for such a cash ticket. If someone like San Gottardo routinely buys expensive fares like that 3000 EUR or more C ticket to USA, then in his value book, 1000 miles = 30 EUR or more. Since for a platinum it takes 125 EUR spend to get 1000 miles, the new FB scheme is very profitable as 12500 EUR spent on 4 tickets at 3000 EUR each earns a value of 3000 EUR or more depending on what ticket it replaces, making 155 EUR value for 125 cash outlay, roughly a 25% discount overall.
For me, in my value book, 1000 miles = 10 EUR, and this has not changed much in the last 20 years actually. Of course I try to get better value for my redemption, it could be with promo awards, some sweet spots, or the odd European one way I need and would cost a lot of cash in Y but a reasonable amount in miles etc. So as a platinum, I spend 125 EUR and get 135 EUR value, so I count on an 8% discount, not shabby but I would not consider it an excellent or I would go out of my way to get these miles. For European flights, my platinum for life status makes the experience much nicer than on competitors with whom I don't have status or that don't recognize status properly (BA/SK/LH light fares and baggage/seating fees for elites). For long haul, since I would not fly Y anyway, status does not matter much, I have more to earn by flying on other airlines especially with good F deals or redemptions to get status in other alliances.
For first class to USA East Coast, I would perhaps pay 1000 EUR + tax one way and 1500 EUR to far east Asia or South America, since indeed I bought such tickets cash with special offers (not on AF though). So 200k/320k miles offset 1000/1500 EUR in my "personal value book", so 1000 miles are worth 5 EUR for me if I redeem them on AF F.
For Business class, I would pay 600 EUR+tax to USA one way, 800 to Far East Asia. An award is 50k to USA or 90k to Asia more or less, that makes 1000 miles worth 9-12 EUR.
I know that most of the time, when I can get a round trip to USA in J for 100-120k miles the retail price for a cash ticket can be 3000 EUR or even much more if I need one way or don't spend saturday night there but since I would not buy such ticket cash at this price, I should not consider it as a 3000 EUR saving but rather what I would be ready to spend for such a cash ticket. If someone like San Gottardo routinely buys expensive fares like that 3000 EUR or more C ticket to USA, then in his value book, 1000 miles = 30 EUR or more. Since for a platinum it takes 125 EUR spend to get 1000 miles, the new FB scheme is very profitable as 12500 EUR spent on 4 tickets at 3000 EUR each earns a value of 3000 EUR or more depending on what ticket it replaces, making 155 EUR value for 125 cash outlay, roughly a 25% discount overall.
For me, in my value book, 1000 miles = 10 EUR, and this has not changed much in the last 20 years actually. Of course I try to get better value for my redemption, it could be with promo awards, some sweet spots, or the odd European one way I need and would cost a lot of cash in Y but a reasonable amount in miles etc. So as a platinum, I spend 125 EUR and get 135 EUR value, so I count on an 8% discount, not shabby but I would not consider it an excellent or I would go out of my way to get these miles. For European flights, my platinum for life status makes the experience much nicer than on competitors with whom I don't have status or that don't recognize status properly (BA/SK/LH light fares and baggage/seating fees for elites). For long haul, since I would not fly Y anyway, status does not matter much, I have more to earn by flying on other airlines especially with good F deals or redemptions to get status in other alliances.
Feb 6, 2019, 7:02 am
#657
Join Date: Nov 2011
Location: MUC/AMS
Programs: Flying Blue Platinum, Hilton Honors Diamond
Posts: 57
One simply cannot understand AF's logic....... 
My girlfriend is flying AMS-CDG-HKG tonight and got an upgrade offer at OLCI:
Y->W €559,-
Y-> J €1449,-
She is FB Silver and travelling on a deep discounted Y ticket (X fare, 057 stock)
Today at 11:00am Expertflyer showed:
P2 F1 J9 C9 D9 I9 Z9 O9 W7 S7 A7 Y7 B7 M7 U7 K7 H7 L7 Q7 T0 E0 N0 R0 V0 X0 G0
Few minutes ago she checked in the KLM app to see if the seat next to her was still free and got the message 'Your boardingpass has been updated'
Guess what.....she already got upgraded to business on the CDG-HKG leg 8 hours before departure. A very nice surprise for her but it left me with a lot of questions
My girlfriend is flying AMS-CDG-HKG tonight and got an upgrade offer at OLCI:
Y->W €559,-
Y-> J €1449,-
She is FB Silver and travelling on a deep discounted Y ticket (X fare, 057 stock)
Today at 11:00am Expertflyer showed:
P2 F1 J9 C9 D9 I9 Z9 O9 W7 S7 A7 Y7 B7 M7 U7 K7 H7 L7 Q7 T0 E0 N0 R0 V0 X0 G0
Few minutes ago she checked in the KLM app to see if the seat next to her was still free and got the message 'Your boardingpass has been updated'
Guess what.....she already got upgraded to business on the CDG-HKG leg 8 hours before departure. A very nice surprise for her but it left me with a lot of questions