Cost per miles ! The final answer??
 

I've been reading extensively in the past threads and the various answers are extremely confusing about "what is a good deal" for a MR, as well as how people are calculating their cost per miles?

Sometime people are calculating their top tier bonuses into the cost per mile while some others don't. They include the booking online bonus and others. I think the real cost per miles should be the value of the ticket divided by actual mileage (not including various bonuses). To illustrate it, let's say I spent 757$ for a SIN run out of JFK and I rack up 21000 Q miles, my real cost per miles should be 0.036 cents per miles.

Bonuses shouldn't be part of the calculation to get a real base for everybody to compare apple to apple.

This being said, now what is a real deal? Below 3 cents per miles? Below 5 cents? I understand that with bonuses you lower your cost per miles. However, If I'm not a top tier I have no bonus. Therefore, what is a good deal?

I'm a bit confused about this whole thing. Anybody could bring some light into this?

I use a $0.02 per base mile as my outer limit for a good mileage run.

But as a qualifier, I use this only when I am trying to get to a higher tier. Once there I take flights which may be more than 0.02 per base mile but are much lesser when you count status bonuses and any other bonuses.

I agree that the cost per status mile should be the gauge for a generalized "good deal" because there are endless other factors that can figure in otherwise. (bonus miles, vouchers, change fees, tickets, etc.) I first heard around here that under 4c/status mile was considered good, but I think that is "standard" and I think under 3.5c/status mile should be "good" instead. Perhaps under 2.5c/status mile could be considered "excellent". http://www.flyertalk.com/forum/smile.gif It is exeedingly difficult to obtain that level absent a $20 fare to Europe on BA http://www.flyertalk.com/forum/smile.gif.

But, as always, many around here have differing levels of resources to apply and different standards of good deals.

[This message has been edited by Warrenlm (edited 01-04-2003).]

$0.04 per status mile is the basic standard, and that doesn't count bonus miles of any kind.

$0.02 per earned mile is the basic for a MR. A good mileage run will earn you miles at less, something like $0.015/mile.

An excellent run is when you go down to $0.01/mile.

It seems to me that a $0.02/mile ticket would be an extremely rare find, would it not? I mean in the example above that would be about $420 for a SIN run from JFK, rather than the current $625-$750. Or a LAX-LHR flight for about $215!

Where do you ever find these fares? Or do people just somehow come up with extremely convoluted routings on the good but more normal fares?

Thanks http://www.flyertalk.com/forum/smile.gif

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"Bother!" said Pooh, as Satan laid his soul to waste.

[This message has been edited by Mrukk (edited 01-04-2003).]

My trip to SIN two weeks ago has finally posted completely to my account......

$.0286 per status mile
$.0103 per earned mile

A very good trip and I wish I could see these SIN prices again for the Spring, but I lucked out getting the 15,000 JPNUS bonus for my trip.. :-)

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AA member since 1981.

mrukk.... i think what many of us seem to think is that 4 cents per status [q] mile is pretty good.then, when you add on elite bonuses & promos , the cost per mile earned can be much lower. none of us seem to include hotel,food,cabs,parking,etc in the calucation.

This subject has crossed this forum many times before - but interestingly, the topic does not occupy it's own special place in The Primer.

Soooo... this topic will make a nice addition. Thanks for bringing it up again, Super Larry! Any more 'final answers' ...or shall I just preach? hahaha http://www.flyertalk.com/forum/biggrin.gif




[This message has been edited by tvl4free (edited 01-04-2003).]

Super Larry: I look to get status miles for just less than 3.5 cents each and total miles for about one cent each. Both matter to me - since occasional bonuses can make an ordinary-looking flight a true bonanza in terms of total mileage earned. During 2002 I found some status miles for 3 cents each - amazing prices. I suspect the same will happen this year. http://www.flyertalk.com/forum/smile.gif

I agree that one should calculate cost per mile on the basis on status miles.
The cost will also depend on continental runs vs transoceanic. I have not gone accross the ocean so I usually compare the cost of my runs with continental runs only.

That being said, in the US the longest flight would be roughly 5500 miles (SEA-FLL). If the fare is $200 (a cheap fare but not the cheapest) then the cost per mile is 3.6 cents. That is my usual gold standard.

If you are very clever (more than me) and you have lots of time to find the right fare and airport sequence and you are flexible with the times you can travel (which I am not) then you may be able to had mileage (SEA-BOS-FLL lets say 7500 miles) then the cost could go down to 2.7 cents.

So, for me 3.5 cents/miles is a good run, 2.5 cents/miles is an excellent run.

Feel free to prove me wrong (there are all sorts of exceptions), but I a see myself as an average MRer only.

Thanks for all the answer so far! It definitely helps me understand better.

Now let add a little bit of multi-culturalism!! http://www.flyertalk.com/forum/biggrin.gif

We are always making the calculations in US$. Would it be safe to assume that a MR at a cost of 3.6 centsUS per miles that translate into 5.2 centsCAN is still a good deal for a canadian citizen?

Probably my fellow canadians would know the answer...

[This message has been edited by Super Larry (edited 01-04-2003).]

All of the fares of my mileage runs are in USD, so I calculate the cents/mile ratio in US dollar.

My personal threshold is less than 1 cent per earned mile if status miles are not my objective. For status miles, it's under 3 cents per mile.

It's my opinion but I find that it is really not hard at all to price runs that are 2 cents per earned mile. Elite bonuses (100%) help and special promotions can help but sometimes the routings are just too darn good. For example, I booked me a $151 NW SEA-BNA fare that would net less than 2 cents per status mile (hence less than 1 cent per earned mile).

Oh, and I do take into account discount certificates, vouchers used when calculating the cost. However, I do not take into account the bus fare from Vancouver to SEA, any layover costs (usually no hotel for me), and other travel costs (meals).

1) The first step in evaluating whether a mileage run makes sense is determining the value of miles for you. The critical error to avoid here is simply assigning what an award costs, not what it's worth to you or what you'd pay for it.

If you intend to use your trips primarily for first class trips to Greece, and those trips cost $20,000, you shouldn't jump to use this figure to determine the value of your miles without pausing to think. What is the trip worth to you, would you have actually paid this figure for that ticket? You don't want to spend $15,000 worth of effort thinking you are getting a good deal for something that is really only worth $3000 to you. There may be some benefits of award travel tickets over purchased tickets you should consider, like free stopovers.

Don't ever forget that miles most certainly will depreciate in value over time as awards become less available, have more restrictions, or cost more miles. If you won't use your miles for many years, maybe it's not worth killing yourself for something that could well be worth very little someday. Airlines have every right to change their program however they like, and are required by law to do whatever maximizes shareholder value... No mercy! More airlines are sure to go bankrupt. While miles historically have miraculously survived bankruptcies (TWA, etc..), there are no promises for the future.

2) Once you have a value of miles, you can factor in the double miles you'd get for future travel on higher elite status. You could assign a value for the other benefits of elite status and factor it in -- free upgrades every 10,000 miles, special elite lines, club use for international travel, that really pretty card that impresses vacuous people. Anyway, you'll get a dollar estimate for how much each tier is worth to you.

3) When evaluating a mileage run, factor in the cost of airport transportation or parking, and any hotel costs. Finding cheaper hotel rates can help you justify much more travel. Far more importantly, how much is your time worth to you? If you get little enjoyment out of the run itself, time is money, and you're flushing it.

If a 4th connecting city only gets you 45 extra miles and flushes 3 additional hours, consider taking a slightly more direct route on the run! I see this mistake all the time. If you extend the stay of a mileage run and see friends or enjoy exploring new places, it may be far easier to justify the run that is now a mini-vacation...

I almost always turn my mileage runs into travel runs, visiting new places or friends, even if only for a few days. It's incredible how much you can do with 2 days in Manhattan, Hong Kong, Buenos Aires, etc... ****, everyone should go to Buenos Aires right now.

Anyway, either I keep an eye out for cheap fares for places I'd like to visit, or an unusual fare gives me a new idea to explore a place I hadn't considered. A person with little free time would have a harder time justifying a pure mileage run, because their limited time would be more valueable. If your run alienates or stresses people you care about, don't forget to factor that in. Again, always consider what good you could have gotten elsewhere out of alternate uses of that same time.

4) Steps 1,2 and 3 are important, because they indirectly determine how much time and effort is sensible for each mile. It will be different for each person. Now pause to consider opportunity costs -- what could you have done with that same time and money? Dollars are really abstract figures, and it's easy to lose sight of how much they are really worth to you. Stop and think about something you value, but don't buy as much of as you'd like because of cost. Say visiting someone you care about costs $1000 per trip.

Then instead of using an abstract dollar amount to determine if something is worth it or not, you can instead say, "Is this worth 2 trips to visit sally? The cost of this item could have paid for half a trip, is it really worth that much to me?"

5) Another angle to check the value of something is to consider the amount of "economic slavery" required. Suppose an optional car purchase eats up a full year of your *discretionary* spending (do not use gross earnings for this step!) Then you'd pause to consider, is this car worth a full year of working day after day, with nothing else to show for my hard work? A person who enjoys cars much more than someone else, could justify more work days flushed to getting it. This makes you think what something is worth to you, not what the dollar cost is.

I'll edit this and add more later perhaps.

I think that a lot may depend on where you live. I fly out of ORD on United and it is hard to find domestic runs for less than 3.6 to 4 cents a status mile.

I made a lot of runs when DL had the 750 base mile bonus per segment offer 3-4 months ago. The best I managed was ~9500 base miles + 12000 bonus miles for $152. Not a bad deal at all.

edited to correct typo

[This message has been edited by DLrunner (edited 01-04-2003).]