extramileage

There are many discussions on the web about the value of FFP miles/points. These are very general and range from 1.5-2.2 US cents per mile (and ever decreasing!). Some argue that you can get a more value by using them for premium cabins while others argue that the value is essentially capped by what the airline will sell them to you for (4 cents/mile for EK!, capped at 25,000 miles per year; much lower for other programs). Skywards is generally viewed as a pretty poor earn/burn program.

But let's get into specifics. What do YOU value SKYWARDS points at?

The general view is that using Skywards miles for award tickets is a poor choice due to high fees. But if you fly only paid F and thus have an "infinite" amount of miles, then you may think differently (here's looking at you, "Mr who trades in China")

The question then becomes: should I upgrade or should I pay cash?

The answer is not as obvious as one may think and ultimately lies (spoiler alert) in what you value a Skyward point at.

Ok class, let's take a live example!

Below is the pricing for DXB-SFO one way cost on a return basis. These are the latest prices from emirates.com originating out of DXB. No Special fares available and Saver is promo til Aug 22. (Note: yes, prices are high originating from DXB, but that's not the discussion at hand)

General Assumptions:
- you want to fly J
- you fly only EK
- you have plenty of cash, so spending cash on J is not an issue
- you have plenty of miles, so spending miles is not an issue
- you have plenty of uses for miles in the future so earning miles is not an issue
- Tier qualification is not a motivating factor
- let's ignore change fees, optionality, etc for now

Specific assumptions (valid for me at least)
- Plat earning level
- earn 3 Skyward per USD on credit card (Amex PRG)
- earn another 1 Skyward mile per USD (via SPG)

Notes:
- J Cost Delta = difference between cash cost of Y fare or Award fees and lowest J fare.
- Miles value = J Cost Delta / Net Miles Spent
- Miles Cash Value = an assumption, here fixed so that Flex Plus + Upgrade is equal to paid J Saver
- J Saver Award fare not actually available, so just used the fees of the Flex Plus Award
- Miles Cash Value = assumption of cash equivalent value of 1 mile


Ultimately, it boils down to how much you value a Skywards point.

In this particular case, you could argue that the miles are worth anywhere from 2.6 to 4.4 cents based on the "Miles Value" line.

The equilibrium point is about 2.77 cents per mile for upgrading a Flex Plus and buying a J Saver to be the best options. Upgrading Y Saver and getting a Flex Plus Award are the "most expensive" choices (confirms general view). Note that these results can vary significantly based on the destination, situation and fare availability (e.g. J Saver not always available).

Increase the value of the mile and paid J is the "cheapest" option. Decrease the value of the mile and using miles to upgrade or award is the "cheapest" option.

So here is my question to all of you under this example:
- do you upgrade to J, do you pay for J, or do you get a J award?


Just trying to generate some good discussion here... no right answer.

By the way, I just threw this table together in a few minutes, so it may not capture all the permutations and assumptions.

skywardhunter

Nice thread! I've done miles-value related calculations before and generally found a Skyward miles to be worth around 1.5 - 2 US cents based on the cash upgrade cost vs number of miles required.

Miles earning from flights ranges from 9 - 15 US cents paid in air fare per mile earned. (This assumes no tier bonuses and was calculated using a sample of 27 randomly selected routes, including DXB origin and destination as well as transiting routes, all return in Y). As a Plat buying Y Saver you can pay as little as 4.12 cents per mile.

My spreadsheet had a calculation error in it, in that I had calculated the bonus miles based on the miles earned for the fare type, not the flex plus miles which is how it should be. Recalculating it now it appears Savers, and not Flex, are the best fares if one holds status.

Based on how you value a mile (between 1.25 and 2 cents) you can achieve up to a 25% cash back as a Platinum but even as Blue and the lowest assumed value (1.25 cents) you get 7.58% back so it's definitely worth signing up. This is based on buying Flex tickets which are my most common type of ticket. Based on my previous error which I have now fixed it appears as a Plat buying Y Saver exclusively you can effectively earn a 48% cash back assuming a 2 US cent value per mile and even as Gold you can earn 35% back if buying only Y Saver.

This spreadsheet is focused more on the cost of accruing miles through butt-in-seat flying.

eternaltransit

My spreadsheet also comes up with ~2c/mile as the redemption value for upgrading on a space-available basis (i.e. no taxes to pay) to a full cabin where only Flex/Flex Plus is available in the higher class.

extramileage

Do you have the back up for that just to compare?

extramileage

True, but if you keep buying Saver Y fares, you won't be Platinum for long!

skywardhunter

fair enough but there's an argument to be made for buying Saver Y fares when sufficient tier miles have been earned to achieve renewal (incl future Saver Y fare earnings). e.g. at 130k tier miles with 3 months to go knowing one would be getting enough miles from say 6 Y Saver returns in those 3 months to achieve plat one could go for this option.

Naturally there's virtually zero value in Special fares as earnings are minimal, the fares are super-restricted and the additional cost for a safer is usually very little.

extramileage

For sure, although if you accrue 130k tier miles in 9 months, you're probably not a Y Saver kind of guy.

skywardhunter

If you fly every week... This was a discussion about miles value wasn't it?

I do 70-80k tier miles a year on Y Flex tickets mostly.

m3red

Sounds awful!

skywardhunter

Not as awful as staying in one city the entire year... don't understand how people do that. Plus I somehow manage to fly J ~40-50% of the time (this year at least)

m3red

I wished I travelled a bit for work. Zero travel sucks although I'd probably have to cut back on personal travel if I had to travel for work.

Krzystos

I would try to spend miles for upgrades.

This is how I was using Skywards miles - before last changes
(now it is very expensive to upgrade on Skywards Saver and also Flex, Flex Plus is cheaper but this fare is so expensive that it can be better to just buy higher class.
e.g. upgrade WAW-DXB was 25k on any ticket, now it is 30k on.... Flex Plus)


But well, upgrade still can be best option.
If not upgrade I would try to spend on other (not Emirates) partner airline.

If both above is not possible I would just donate points to charity.

Krzystos

My all travels for work were on LCC airlines paid by company where I worked
(the same for all in the company, also my boss).
All my J/F class travels were on personal travels (mile upgrades, cheaper J tickets and other crazy stuff or luck).

eternaltransit

Will try and dig it out - I based it on the cheapest cash prices I could find for Europe-Asia for each fare group.

milegentleman

Excellent thread

A bit confused...As per EK website, 3 amex points = 2 Skywards