I've aimed for the super high value tickets, like CAD$17,000 for YVR-SEA-LHR-RUH-LHR-YVR, in First class, on BA (125,000 CP pts.) Anyway, here's the summary:

April 97 - August 99, 10 round trips
2 x AA 75,000 points, for $8400
3 x BA 325,000 points, for $41,600
5 x CP 121,000 points, for $13,000

521,000 points spent, CAD$63,000 (+taxes) saved.

This looks about like 12.1c ( + taxes) of value received, for each point spent.

Regards,

Ken Hamer
Notes:
Fares are based on current published fares.
Fares don't include taxes.
Dollar figures are approximate.
Fares are in Canadian dollars.
All tickets were in First or Business Class.


[This message has been edited by KenHamer (edited 08-26-1999).]

Great value Ken. I only learned late in the game about high value (not booking econo tickets). I always used to book econo for the family, even to Australia (twice!).

Even with my new found knowledge, some J class tickets have required excessive amounts of points (e.g. 185,000 miles from Canada to South Africa X3) but the alternative was worse (paying $21,000 to get the family to South Africa in J Class).

mkpkmp:

My spreadsheet shows the following value in descending order (with a ratio compared to a base value of 2 cents US or 3 cents per mile CAD):
 last minute Economy Class N. America (up to 4.3:1)
 N. American Business Class (3:1), last minute South America Economy Class (Varig)/W. North America last minute economy/Business Class Pacific Asia (2.9:1) or Australia last minute Economy Class/last minute European/South America Business Class (2.5:1)
 Australia Economy/Business Class to Africa (1.7:1)
 Pacific Asia/South America (Varig) (1.0-1.3:1) tickets in Economy Class

The worst value award for me is a short haul ticket in western North America with a ratio of .67:1 meaning it is worth about 2 cents/miles CAD.

I usually don't let value dictate where I am going, only whether I buy the ticket or use a reward. An exception was when I had two business class awards to anywhere Star Alliance carriers flew (a special AC promotion where you earned your normal points and bonuses plus they gave you extra awards!)--I would never have used those for North American travel so looked at Australia or South Africa. My daughter chose South Africa.

There's no point wasting 15000 points on a ticket I could get for $100 CAD or 25000 points (or 2 business class awards anywhere Star Alliance flies) on a ticket I can get for $300 CAD and then use upgrade certificates to travel in Executive Class.

I now look for premium class tickets for my reward travel or use awards for last minute North American travel to poorly served northern Canadian locations that rarely have real discount fares(i.e. when a client isn't paying for the travel).

Other frequent flyers have the option to buy upgrades in their plans and I think that is a great use of points as you build status plus you travel at reasonable cost and in comfort.

My plans used to allow us to buy upgrades but not anymore. Besides, I have been travelling enough that I now have a whack of international/domestic any fare upgrades and have had 100% upgrade success ratio this year.

I am fortunate in that I earn a lot of miles very quickly--usually more that I would probably ever use in a lifetime if I used them wisely. Therefore, we just use them extravagantly for whatever suits our fancies.

Yes I love to travel where and when I want, but my favorite way is to use them for gifts. Getting two 1st class tickets to their honey moon destination can brighten the lives (and pocketbooks) of newlyweds considerably. They also make great graduation presents for the college bound and, of course, our children (my favorite charities) assume that the mileage fund is a bottomless pit.

Naturally, we use them for some fairly practical purposes--upgrading those nice inexpensive advance fares on the PIP express. Also to purchase those ghastly expensive last-minute-purchase-no-Saturday-night-stay fares to Chicago that can easily exceed the ten cents per mile mark.

The price for our tickets to and around Europe this Spring would have been $28,000.00 had we paid cash. It doesn't really matter how many cents per mile that was. The real point is that I probably wouldn't have spent $28,000.00 at the drop of a hat to go play.

And no, tummyg, I don't think we would ever want to deduct gift tickets from our income tax. The IRS would be more than happy to turn that coin over in a heart beat. http://talk.flyertalk.com/forum/wink.gif



[This message has been edited by Punki (edited 08-26-1999).]

Hey Punki - did I tell you I'm getting married?! http://talk.flyertalk.com/forum/smile.gif (ok, renewing vows....)

Cheers,

'toad

Punki: yes I agree that giving to charities is a good cause. Just got my daughter a trip to New Orleans for January (she declined a business ticket so she could go in economy with her friends who had already used their parents air miles for tickets!).

I also have given rewards to registered charities that I volunteer with so their people could do those mid week flights that cost so much.

Hammertoad:

No kidding on the renewal? I am currently planning the same thing for next June (our 10th anniversary).

Nothing too fancy, but a big blowout reception afterwards though!


------------------
"I will not be pushed, filed, stamped, indexed, briefed, debriefed or numbered. My life is my own."

Same thing here (10th, that is) next year. Going to go to Vegas like we should have the first time! (meddling mothers, you know) http://talk.flyertalk.com/forum/smile.gif

She doesn't know it yet; so mum's the word.

Cheers,

'toad

So far, I've been able to keep this a secret. A friend has been helping with the prelimaries, and she receives all the phone calls so that none come to my house.

I doubt I'll be able to pull it off secretly, but I'm going to try.



------------------
"I will not be pushed, filed, stamped, indexed, briefed, debriefed or numbered. My life is my own."

Regarding the IRS tax issues, part of the problem is how to value the freebie (i.e., full-fare coach vs. discounted coach is all I'd actually pay for a ticket. But the bigger problem is that even the IRS realizes the FF miles are only taxable to the extent that somebody else (your employer) paid for the original ticket. For our own personal travel, the FF miles operate as a rebate, the same as clipping the UPC code for $10 (or whatever) back. All my travel is paid by myself now that I've stopped work, but back when I was working the IRS would have had a heck of a time figuring out how much was "work" generated and how much was "personal". Add to that the problem with 100% PremEx bonus (which I wouldn't be getting on work travel alone or personal travel alone, and you begin to see the headaches involved.

BTW, I read years ago that the airlines' biggest fear is that the IRS will announce taxability "effective such-and-such date." Can you imagine the rush to cash in miles? They'd much rather a sudden "taxability now" announcement!

Part of the problem is valuation, but a bigger one is that (in the U.S., at the Federal level) you can only deduct for donating something that cost taxable income in the first place. (There are exceptions, but they don't apply here.) To get a deduction for giving miles away, they'd have to have been taxable to begin with. This is the same reasoning (not to use the word "logic" in a discussion of income tax) that says we can't deduct the value of time we donate to charities, since there's no taxable income to offset, and any number of other things.

I don't think any of us wants to make miles taxable just to get a deduction when we give them away!

I am not a CPA. The U.S. tax code is not generally considered to be an example of clarity. This interpretation is worth no more than you paid for it, perhaps less. YMMV.

Putting a value to frequent flyer awards is like trying to determine how many angels can dance on the head of a pin...

I cringe when I think about the early days of awards, and how "cheap" they once were. Up here in Canada -- before discounted domestic travel was credited at half the points that full-fare was -- you could get 4 J-Class tickets anywhere CP Air (as Canadian was then known) flew, including Asia and Australia/New Zealand, for just 140,000 miles! A pair of F-Class tickets across the Pacific went for 125,000, if memory serves. And 100,000 bought 2 F-Class across the Atlantic.

Today, it's 100,000 for a single J-Class to the South Pacific. And it takes an awful lot more traveling to earn the same 100,000 miles (though using upgrades on discount fares at least earns mileage on a 1 to 1 basis, rather than 1/2 to 1).

Certainly couldn't calculate the value of all my awards over the past 15 years, but I have since day one taken the view that international F or J were the only worthwhile awards, since Y-Class travel is so heavily discounted. (And who wants to sit for 6-plus hours in the back cabin unless you have a large family to bring along with you?) And with a few exceptions, I've had little trouble booking space in either front cabin, using the logic of knowing when they're most likely to be heavily booked with paying customers.

Generally, I do think that both Air Canada and Canadian have less-costly awards in the front cabin (theirs being J-class only), than do the US airlines -- though discount domestic flights in US programs still get 1 to 1 credit, unlike up here, and so accumulation is easier -- and I suspect most international carriers. Though Air Canada has just (today) raised the price of J-class awards across the board. And its Star Alliance partners are pretty pricey when compared with those in oneworld using Canadian Plus miles.

In fact, some awards are so good on oneworld partners, I don't like too many people to find out lest they get raised. As already noted by one writer, F-class on BA -- surely one of the finest inflight experiences extant -- between North America and Asia (i.e. India/Sri Lanka) or Southern Africa (both via London) goes for a mere 125,000 miles. J-class is 100,000. In both cases, this is just 25,000 more than the same class flights across the Atlantic.

Although Air Canada itself does fly to India for 100,000 miles in J-class (an award that did not rise in "price" today), The Star Alliance doesn't come close to these oneworld awards. To get to Africa (using either Lufthansa or Varig) you have to "buy" two separate award tickets: the first to either Frankfort or Soa Paulo (at 100,000 miles), and the second to Johanessburg (at 110,000 miles on Varig, or 140,000 miles on Lufthansa).

And Thai asks you to "pay" 130,000 in J-class and 170,000 in F-class for the privilege of flying free with them. Even Air Canada and United "charge" just 100,000 in J-class to cross the Pacific, and United 120,000 to do it in F-class. Canadian and Cathay also "charge" 100,000 for J-class across the north Pacific (and Cathay 150,000 in F-class, somewhat more than United -- a "win" for the Star Alliance!)

And there is also Qantas in oneworld which covers the south Pacific as competitively as United.

So, aside from the generally poor inflight service quality of American Airlines -- the real weak link in oneworld when compared to the quality on offer from Cathay, Qantas and BA, not to mention poor little Canadian -- what's so "bad" about oneworld? Or what's so "good" about Star Alliance?

As to providing a more universal -- IRS-type -- value for award tickets, a judge up here in Canada did just that about two years back when our version of the IRS decided to tax award tickets in the course of an audit. While it is still not the norm to declare awards, it is expected when they are used for personal travel, but earned through business travel. There has been no great crackdown by Revenue Canada, but the precedent is now on the books.

I can't recall the exact formula the judge used (it's as complicated as trying to figure out the small business deduction on our T2 corporate returns), but the value of a seat even in First and Business is much lower than we'd think. The judge argued that because there are so many discounted fares, even in J and F classes (known variously as C, D, A, etc.), it was not fair to put the value at the "unrestricted" level as Revenue Canada had sought, nor at the "highly restricted" level of most discounts (as the defendent had pleaded).

The judge's formula had something to do with subtracting the lowest discounted fare from highest non-discounted fare and multiplying the result by some fraction relating to load factors or some such arcane benchmark. In the end it worked out to be about 1/3rd the highest fare in the respective class of service.

So much for the value of award tickets...

The value I receive has definitely increased with my knowledge. Prior to 1998, I valued flight rewards received at about $.023 US/mile. In 1998-99, I valued flight rewards received at about $.04 US/mile, almost double my previous rate! Still got a ways to go though:

My calculations indicate that the best I can do in my current programs is about $.06 US/mile (non-economy tickets in North America) to about $.11 US/mile (first class tickets eastern North America to western Australia).

Clearly, there are places to live where accruing points in a frequent traveller program can be of greater benefit (e.g. cities served by only one major carrier where fares are substantially higher).

[This message has been edited by BlondeBomber (edited 09-05-1999).]

How much of these travels are :
1) Company funded
2) Self Funded
3) Self funded in addition to company travel in order to get the upgrade