Boraxo

As an economist you well know it is a question of price.

And as you've seen from the response, there is no agreement on the value, or at least one on which the airlines and the mileage runners can agree.

A big part of the problem is in valuing the various levels of elite status. If you do some research in the AA and UA forums, you'll find some threads addressing this issue as it arose when airlines were offering DEQM as well as when AA sold status extensions to those who came up short at the end of the year.

As noted above, the top tier for UA, AA and DL (leaving aside UGS and other tiers that can't be bought on mileage runs) are worth far more than the next tier down due to the SWUs, eVIPs which have significant value - the ability to buy a cheap ticket for $1000 and then fly internationally in a product that can often cost $10,000 or more.

The lower and medium tiers also offer soft benefits, i.e. time savings, that are worth something but that can now be purchased rather cheaply in many cases.

So if you are 10k EQM short of 50k, and the cost of 2 transcons is $500, you have to decide if the soft benefits plus 100% RDM bonus are worth $500. For most people that would probably be the case, but maybe not if you fly mostly paid international business class.

It is completely different calculation for a flyer who is 10k EQM short of 100k. The extra benefits are easily worth $500, in fact maybe worth $1000.

Would it makes sense for airlines to sell you the EQM rather then mileage run tickets? Of course. But keep in mind that AA used to price the buy-up pretty steeply, I think near $400 to renew Gold and $700 to renew Plat (and then only if you were 5k miles short). So there is clearly a difference between the airlines pricing and the customer's valuation.

In my own case, I can project that I may be 20k short of 1K this year. I would easily pay $1000 to avoid spending 40 hours flying on 4 transcon roundtrip mileage runs. But would I pay $2000? Probably not. Paying with time is easier than after-tax cash. Also keep in mind the value of RDMs that you get from actually flying, as these are rarely included with non-flight EQMs. After subtracting the value of these RDMs (200% of actual miles for many elites) the cost of the MR goes down substantially.

Evan!

I would hardly call it pure genius. JetBlue and Virgin America both base FF perks on $ spent and have been doing this before WN changed their program.

With that said, they were smart to change their system.