Is it time to hoard miles – will their value go up?
#17
Ambassador: Alaska Airlines
Join Date: Nov 2008
Location: BWI
Posts: 7,390
Miles will not go up in value, probably ever, unless AA wants to explain to their investors why they are seeing a drastic reduction in offloading AAdvantage liability on their balance sheets.
My prediction, in 3-5 years redemption will be $$$ based similar to how we buy tickets with CC points. The huge upside will be we can book any seat, but we have to pay what that seat is worth.
My prediction, in 3-5 years redemption will be $$$ based similar to how we buy tickets with CC points. The huge upside will be we can book any seat, but we have to pay what that seat is worth.
#18
Join Date: Feb 2005
Location: PHL
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IMO trying to apply a supply and demand model to the worth of FF miles is incomplete. This is simply because the airlines have such a high degree of control over how easy/difficult it is to redeem them.
#19
Join Date: Jun 2002
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And, yes, I realize that you can just buy that segment for short money, but (a) two tickets are harder to deal with in several ways; (b) you just shouldn't have to; (c) makes it hard when you are trying to change a BOS/PHL/CDG ticket when you can find PHL or JFK to CDG but not BOS to the gateway. Arghh.
#20
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The whole point of these changes - on both the earn side as well as the burn side - are intended to decrease what the airline gives back. Just because you are earning less miles now doesn't mean that the miles you earn will be worth more... that would undo what the airline is trying to accomplish.
The opportunities for high value redemptions exist only as long as the award charts are around. Once awards start to get priced based on the corresponding cash fare (and in my view we're not far off), things become much less interesting.
The opportunities for high value redemptions exist only as long as the award charts are around. Once awards start to get priced based on the corresponding cash fare (and in my view we're not far off), things become much less interesting.
#21
A FlyerTalk Posting Legend
Join Date: Jan 2002
Posts: 44,600
The OP argument seems to be that cost is the same as value and that because it costs more to get a mile, that it is worth more
With value being defined as "The worth of something compared to the price paid or asked for it" , this seems flawed
The worth of miles has dropped significantly over the years. For instance 150,000 miles could provide a circular trip of 26.000 miles with stopovers. More recently 120,000 miles could provide a r/t from Europe-South Pacific worth GBP2000 ; now the same trip requires 41% more at 170,000 ( 1st class raised 53% from 150,000 to 230,000 )
Cost of buying miles used to be ( iirc ) $1000 for 40k (plus taxes and fees) whereas now it costs $1180 ( 18% increase )
The worth of miles to me was around GBP2000 for 120k miles ( 1 mile worth 1.67p ) but at 170k miles 1 mile is worth 1.17p
With cost increasing by 18% but worth dropping by 30% , I cannot see how can argue that the value has increased in this situation. I know that some redemptions have dropped in price, but don't think that there are likely to be many where the worth has increased by more than the cost
With value being defined as "The worth of something compared to the price paid or asked for it" , this seems flawed
The worth of miles has dropped significantly over the years. For instance 150,000 miles could provide a circular trip of 26.000 miles with stopovers. More recently 120,000 miles could provide a r/t from Europe-South Pacific worth GBP2000 ; now the same trip requires 41% more at 170,000 ( 1st class raised 53% from 150,000 to 230,000 )
Cost of buying miles used to be ( iirc ) $1000 for 40k (plus taxes and fees) whereas now it costs $1180 ( 18% increase )
The worth of miles to me was around GBP2000 for 120k miles ( 1 mile worth 1.67p ) but at 170k miles 1 mile is worth 1.17p
With cost increasing by 18% but worth dropping by 30% , I cannot see how can argue that the value has increased in this situation. I know that some redemptions have dropped in price, but don't think that there are likely to be many where the worth has increased by more than the cost
Last edited by Dave Noble; Jan 9, 2017 at 9:56 am
#22
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#23
Join Date: Aug 2010
Location: LAX
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It has never been, in the past, wise to hoard miles. Miles have always been devalued, thus in my opinion, Earn And Burn is the wisest course of action.
Even after heavy advertising "Get Something For Nothing", they are loathe to give away something for nothing.
Even after heavy advertising "Get Something For Nothing", they are loathe to give away something for nothing.
#25
Join Date: Mar 2008
Location: New Orleans
Programs: AA EXP
Posts: 655
1.5 CPM +
The miles probably have more value than this, but 1.5 cpm is my threshold value for use. Miles typically yield more value, e.g.,for longhaul C flights.
For EXP, there's value in fully flexible, or at least cancellable, award ticket reservations. Book an award ticket for a family member - if they can't get time off or whatever, cancel the ticket or cancel if a cheaper purchased ticket becomes available.
For EXP, there's value in fully flexible, or at least cancellable, award ticket reservations. Book an award ticket for a family member - if they can't get time off or whatever, cancel the ticket or cancel if a cheaper purchased ticket becomes available.
#26
Join Date: Aug 2006
Location: Dallas
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I understand what the OP is trying to argue. In the past accruing 300k RDMs for about $4k was easy. Today to get 300k RDMs would cost $27,200. So while before you could literally spend airline miles like funny money (and many, many people did), it would make sense to evaluate does it make sense at that XYZ redemption to use miles, or to pay cash. Before, outside of very minor instances it was almost always better to use miles (cash is king). How many of us were flying to Asia for $500 and then getting 35k RDMs for it? So spending 25k miles on a $300 ticket wasn't absurd.
Today, unless you MS the vast majority on here will earn fewer RDMs, which in a sense make the miles accrued "more valuable", since the ability to replenish our supply of them went up in price. So while "hoarding" makes no sense, the ability to easily earn 400k RDMs a year is gone for many of us, and so the willingness and ability to spend in large amounts diminishes.
In theory over the long haul, this should help increase the availability of awards as people earn fewer miles and ultimately use more than they are earning each year.
Today, unless you MS the vast majority on here will earn fewer RDMs, which in a sense make the miles accrued "more valuable", since the ability to replenish our supply of them went up in price. So while "hoarding" makes no sense, the ability to easily earn 400k RDMs a year is gone for many of us, and so the willingness and ability to spend in large amounts diminishes.
In theory over the long haul, this should help increase the availability of awards as people earn fewer miles and ultimately use more than they are earning each year.
#27
Join Date: Sep 2008
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Regards
#28
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