I hate to say it, but frequent flier programs are based on a faulty assumption...an assumption that leads to people who read forums such as this. The assumption is that people who fly the most miles, are worth the most to the airline. But that is not the case. The airlines will eventually give up on this whole mile thing, and start rewarding people based on how much money they spend, not how many miles they fly, and start rewarding the passengers who are truly worth the most to an airline. Although the flyertalk members would not be too happy. (Or would they be better off?)

I know that there may be tax consequences to this, but it seems to be the best way for an airline to attract loyal customers. The people who pay for a first class seat will be richly rewarded...much more so than the person who pays the rock bottom fare in coach. Right now both get the same miles, but the airline would probably want to award the first class passenger more.

And then this ends all this "how much is a mile worth?" question. If it was say 5% of your ticket. You spend $200, you get $10 towards a ticket. You spend $2000, you get $100 towards a ticket. And it even helps the in-frequent traveler. Because now they have a $10 coupon they can use on thier next flight, and they will stick with that airline.

Does anyone else have any ideas on the pros and cons to moving to a "dollar" based award system?

-locker1776

i think that a & based program would tend to make liesure travelers [like me], go for the low bidder, rather than spending a bit more for their preferred carrier to get the bennies....after all, many seats are occupied by people who want an inexpensive fare & support the frequent skeds that business travelers want.

...To find out what deals are out there, we looked at mileage runs in North America that offer travelers a good mileage return for their fare, factoring in airline promotions to estimate mileage totals for the flights. We found several options where 6,000 miles or more could be earned for an itinerary costing less than $230...

http://www.usatoday.com/travel/deals/fare/compare.htm

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So it seems then that 0.01 is about right these days!

-Mark

I, and I'm sure there are a number of people that fly this way, help fill up seats that were going to be empty by jumping on the planes at the last minute when a nice sale comes up. Once I got started with that, I stuck with the airline and started making more leisure travel specifically on that airline because that's where I had the status. Now I buy tickets for what I need and when I need to go, though I do go look for a decent deal.

If I hadn't been able to get status on some of the cheap tickets I started out buying, I doubt I'd have continued buying tickets and spending more as I do now. The hotels are a lot harder for me to hit status, and in general I don't have any loyalty to a hotel chain. I don't think I'd fly as often or stick to particular airlines if I hadn't earned and maintained status, since I do it as a voluntary leisure activity and not for business.

I can see the advantage to an airline having a dollar-based system, but I think the bonuses many of the airlines have implemented for more expensive classes of tickets address that issue pretty well.

this soluion would create a real problem for the airlines. Almost all of the awards would be redeemed, even if just $10 at a time. With Miles you have to hit a threshold first. Even if only 25K miles, hell that may be years before a casual traveler can get a free ticket (even assuming no blackouts). If they give me a $10 cert, I will just use it on the next flight.

I know I have "wasted" miles in the past in small quantities and I think the airlines count on this. If everyone was able to redeem every mile they had the airlines would be even more bankrupt than they are now.

Every mile/point has a different value according to the user. The other week, a friend of mine had to go to SLC. Tickets were around eleven hundred bucks. He spent 50k miles + $80. I know some people who blow 25k for less than $200. Go figure, but I like a 50k international award because you are allowed a stopover which would increase the price dramatically.

I value mileage at a penny/mile when a friend/relative I like needs an award ticket. Two cents/mile for everybody else. I usually use the award miles myself and I value it between a penny to 2 cents/mile. Depends on the award I'm seeking.

That's absolutely right. Stopever rules vary among airlines airlines of course. Delta in Europe is wonderful, where the stopover doesn't even have to be enroute! I've done TUL-HVR-IST-TUL where getting to Hanover required a round trip to Paris. This was a $1400 ticket, so that's 2.8 cents per mile.

Just last month we redeemed 25K intra-Europe Delta awards for LHR-MOW-PRG-LHR and MOW-PRG-ZRH-MOW and a 50K award for TUL-PRG-ZRH-TUL. It was a great multi-country overlapping vacation for the 3 of us.

The season of the redemption also changes the value of miles. To Europe, AA is 40K in the winter and 60K in the summer, while Delta is a flat 50K all year. For years my strategy was use Delta to earn miles in the winter and cash them in the summer on multi-city trips.

My redemption rule is generally 2 cents a mile, with a purchase rule of under a penny. However these are lowering now that I'm accuring 250K miles a year.

Another considerration that increases the value of reward tickets is that the dates can often be changed without penalty. This can be worth $150 or more a ticket. We changed the dates on all three of the Delta tickets mentioned above. Even if the dates don't change, but might, there's a value just like insurance has a value.

And don't forget that award miles can be reinstated if not used, which is much better than non-refundable.

The Value of a Mile

...In fact, we used to routinely recommend that program members use 2� a mile as a rule-of-thumb target value for their frequent-flier miles, based on the fact that the average domestic ticket price was in the neighborhood of $500 (2� = $500/25,000 miles).

Unfortunately, that advice is outdated. In the current environment�with today's combination of sluggish demand and intense downward pricing pressure exerted by the low-cost carriers�the average price of a domestic ticket has fallen below $400. That alone depresses the theoretical value of a mile to less than 1.6�....

http://frequentflyer.oag.com/stories..._of_a_Mile.asp

If you compare apples to apples, I think the average domestic ticket price with the same restrictions as a frequent flyer miles award is about $200 - $230. If you are paying more, you are getting more flexibility and/or a last minute ticket.

Not so sure I agree with this. Award tickets have pretty decent flexibility for changing dates and can generally be refunded, and the miles put back into one's account, for a modest fee.

100% ACK. I usually book my tickets way in advance to lock in a vacation and then fine-tune the itineries over the course of the year. Sometimes, if not always, the departure times get changed and this normally gets the modest fee waived.

Currently I am holding two saver/standard tickets to LIH in April, one on United, another on NW. Each airline had only one open seat. I am pretty sure that another seat will become available sooner or later or two for another week. The absolute worst case would be to actually travel on different airlines but arrival/departure times are within 1.5h.

Even if the fee does not get waived, I gladly pay it for the flexibility the award tickets provide.

One thing to consider is that tickets to Canada take the same amount of miles as domestic tickets, but they usually cost more. For example, I fly regularly from San Francisco to Montreal. Restricted tickets are usually around $350. Often they are over $400. Once in a while there will be a sale and they'll be under $300.

So I often use my FF miles for this trip. It almost always gives me more value per mile than any other "domestic" award.

Ed

I love how the airlines tell you it's against the rules to buy or sell miles - but then they offer to sell you miles, give them away to people of their choice, transfer miles if you pay a fee, etc.

My friend said the miles are worth a solid 1.5 cents and that's the flat going rate. But then how is it that the airlines offer to sell them to you at 3 cents?

OK, so help me out here.

I have always attempted to accrue DL Skymiles to use for awards on South African Airways (between US and SA).

80,000 Skymiles for a coach ticket on SAA
120,000 Skymiles for a business class ticket on SAA

Approx. prices I have encountered for these same tickets (paying cash)
$1,000 for coach
$6,000 for business class

Using everyone's math
$1,000 / 80,000 = 1.25 cents per mile (not too great)
$6,000 / 120,000 = 5.00 cents per mile (very good, the higher cents per mile the better)

Now, I am faced with the following dilemma
Trip to Europe - DL Skymiles 50,000 coach, 90,000 business
Cost - About $700 coach, $3,800 business (just quick Orbitz price checks)
700 / 50,000 = 1.4 cents per mile
3,800 / 90,000 = 4.22 cents per mile

Perhaps answering my dilemma, I should pay cash for the coach ticket But, if I want to go business, I would be wise to use miles. The higher cents per mile, the better.

Right?