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If one is saving miles for retirement travel then I would say that FF miles are pyramid scheme. I personally try to use miles at the same speed as I earn them. I always try to remember that:
1. I do not earn interest on the miles that are sitting on account 2. The miles are devalued when airlines change their redemption rates yearly December I booked one BF return LAX-GIG on Continental for 90K miles and then used my UA miles on Varig for three intra Brazil business class tickets 30K/each. Excellent use of miles in my opion. |
Your profile says you fly Continental. That is your problem, not frequent flyer programs in general.
LOL...but sooo true! |
Originally Posted by ani90
My opinion is that miles do not need cessation of an airlines operations to become worthless- Indeed I would argue that the majority of miles in circulation are already worthless - they will never be exchanged for airline flights, cannot be exchanged for cash, cannot be bartered for other products and will disappear into oblivion when the holder dies.
Many of us have miles here and there in different FF accounts, much similar to having several bank accounts, but you cannot consolidate your miles to spend them and little quantities of miles standing alone are of no use as they cannot be exchanged for flights or goods. Even those with large quantities of miles do not necesarily use them and there are numerous flyers on this board who have had balances in excess of 500K, some with acconut balances running in millions, for several years running. While the airlines accept miles as currency, they make it very difficult for flyers to spend miles unless the flyer is ready to adapt his/her itinerary to whatever rules the airlines prescribe. These rules are constantly revised in a way that ensures only a minority proportion of miles will ever be redeeemed - as flyers adapt and find ways to redeeem more miles, the airlines adapt and make the rules even more restrictive so flyers can no longer use miles as easily. In this way the airlines control the amount of miles that are redeeemed, and yet can continue to dish out millions each day knowing the miles cannot and will never be redeemed. Is that not a big scam? It is like being given a cheque you cannot cash. If miles were simply exchangeable as cash in any transactions with airlines, then the true level of the scam will be realised as the airlines will collapse because they will not be able to honor the trillions of miles they have put in circulation. They cannot redeeem the trillions of miles in circulation because they never intended to do so. So the solution is to make it as difficult or near imposiible to redeem the miles. Last year I made 5 attempts to use miles and was only successful in one. But I am not complaining though - personally for me the benefits of an FF program are not the miles but the benefits associated with being an elite. Nevertheless, unless one has a very adaptable or flexible life, I would agree there is great similarity to the unwitting customer accumulating miles in an FF program and the investor in a pyramid scheme, both are investing in schemes where there is really no desire or strong intention (on the part of the airline or scheme) to see your investment succed. |
One can argue with all the partnerships these days, miles have actually increased in value. Aside from slight nuances in rules and odd partners of a single airline here or there, the big boys in the U.S. have essentially merged into three different currencies: Oneworld (AA), Star (UA/US), and SkyTeam (CO/NW/DL).
I see many posts on this board of people who have been "unable" to use their miles, only to find a reasonably convenient alternative on a partner (or mix/match of partners) that is indeed available if they 1) think of it, and 2) ask for it. |
Originally Posted by channa
One can argue with all the partnerships these days, miles have actually increased in value. Aside from slight nuances in rules and odd partners of a single airline here or there, the big boys in the U.S. have essentially merged into three different currencies: Oneworld (AA), Star (UA/US), and SkyTeam (CO/NW/DL).
I see many posts on this board of people who have been "unable" to use their miles, only to find a reasonably convenient alternative on a partner (or mix/match of partners) that is indeed available if they 1) think of it, and 2) ask for it. I'm hardly a sucker, tossing my money into a scheme that will never pay dividends. Like most FTers, I'm an expert at playing this complex game to my considerable advantage. |
Originally Posted by vtqanh
Perhaps the 5 attemps you made were trying to book Saver Awards? Standard Awards seats are available as long as there are available seats for sale.
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As this is not specific to Mileage Runs, but rather about the value of miles in general, I'm going to move it to MilesBuzz.
Dave, a.k.a. dmfriedman Moderator, Mileage Run |
It isnt getting any easier to cash the miles in, but one still can. The main part is being flexible. but thats the same when buying a tkt, if you have a certain carrier in mind Only with a particular flight on a specific day, theres no way to be sure you will even be able to purchase a Full Fare tkt under those creatria. Its not a Scheme yet.
but why didnt anyone include the Hotels in it. You collect your points at a certain chain only to see that you now need more pts to get that same free night. Or you decide to go to XXXX for a vacation you've been waiting yrs to save up you got the plane tkt, only to find out that the Chain doesnt have any room at the Inn left during the period youd like to be there. Or that your Dream Hotel has left the chain you've been saving up in for that Ultimate stay and now its gone. Even hotels via CCs and other partners are selling their points. No Carrier or Hotel ever Promised that you would be able to use your Miles/Points whenever and whereever you wanted to. Now what each person needs to do is to work out if it pays to Fly or Stay with any particuliar brand. For some yes others no. When it all started it was a different Age and Time. Now one needs to make sure he doesnt allow the addiction to blind his/her ability to see if in fact what they are doing is still worthwhile or not. But the Game (and it is that) is still playable with some Great prizes to be had for all.IMO |
Frequent-flyer miles are no more pyramid schemes than are national currencies. All currencies lose value over time (inflation). The key difference with FF miles is that we can't invest them so they appreciate -- they're all stuffed under our respective mattresses. So it is dumb to hoard them.
With the definite exception of Continental, which markets "standard" awards to hot destinations like Europe that are in practice virtually unavailable, it is not that difficult to redeem miles if you're flexible. The people who seem most upset about being unable to redeem FF miles usually went after two first class seats to Hawaii the week before Christmas, a week before the departure date, etc. and were as you might expect disappointed. |
FT is populated by two main types of people. There are the heavy business travelers who accumulate FF points the "old-fashioned" way. And there are those who accumulate most of their points with credit cards. I fit in the latter category.
Living in NJ, most of my flying is with Continental. My Elite statuses are all courtesy of the Centurion card. The points I accumulate from flying that are in the airline FF accounts, are, I believe, there to be used ASAP. And you're right - they don't make it easy, especially if you have to travel during peak vacation times (my wife is a teacher). But the credit card points should ALL be accumulated on cards that allow you the flexibility to play the system to your own advantage. To me, that means either the Starwood AMEX (my answer) or the cards that use the points in your account to purchase ticket(s) for you. So with zero points in my American Airlines account, I was able to transfer points from Starwood and get upgrades to First Class to Hawaii this summer - something that was not possible on CO despite Elite status. Yes, I can't be sure what I will be able to redeem them for in the future, but I am a lot more comfortable having a 200,000+ Starwood points than if those points had been sitting in one specific airline's account. A close friend still uses the CO Mastercard - it actually pains me to see it when we go out together and he uses it to pay the bill! As the OP says - it is playing directly into their hands without any sense that you will be able to use them when you want, where you want. I'm still a newcomer here - always impressed by the knowledge of the people on FT and learning everyday. But let's not forget, it still remains "something for nothing!" Using cards to pay some of my office bills rather than paying them by check like I used to, is, for example, getting us 5 nights at the Princeville, 5 nights at the Ritz in Maui and First Class seats to Hawaii for the price of Coach this summer - about $7-8,000 saved just by changing the way I pay bills! Yes, I wish I could be certain about the future, but we can't count on them, on Social Security, etc. Let's just keep helping each other make the most of them now. |
[QUOTE=autopilot]The airlines know, miles they sell through third party are profit because 60 % (guess) will end up never redeemed. QUOTE]
72%. Randy says only 28% of miles issued are ever used. This plus the fact that award seats are usually seats the airline will never sell anyway accounts for the facts that 1. Selling miles is currnetly the only profit center for some airlines, and 2. On the airlines' financial statements, the value (liability) of unredeemed miles is very low (a small fraction of one cent per mile). |
Originally Posted by dhuey
Like most FTers, I'm an expert at playing this complex game to my considerable advantage.
The guys on FT represent the flying elite, people who know the ins and outs of airline industry, fare classes, routing options etc. True many of us may use our miles to the best advantage. But FT members and similarly informed flyers are generally people who design ways to accumulate miles with the very purpose of using them hence the biased few (in favor of miles) seen in response to this thread. However such experts form the minority. For most people who fly and who accumulate FF miles I again say that the miles will likely never be used - they have no clue of all these ingeniuos ways of obtaining bargains to exotic locations. I know several people who take numerous foreign trips related to work (who are also by definition very busy people who barely have time for holidays) and accumalte 100s of thousands of miles every year or two but they will never use them. What would they use them for? Many barely are able to take even 2 weeks holiday in a year. Many of those in FT are different because they seem to have abundance of time and the flexibility to travel at any time of the year, go on Holidays and to take mileage runs and can thus accumulate and burn miles easily, in a way many 'normal' people can not. For most of the trillions of miles in circulation amongst the majority (uninformed flyers) they will forever remain unspent, hence the scam. I suspect the airline industry knows this as they only redeem a small proportion of miles they issue every year. Maybe next time you are in the real world waiting for a delayed next flight ask the person next to you what has he done with his miles lately. |
Originally Posted by autopilot
The reason I posted that here is because Mileage runners (thats me :p ) are caught right in the middle. Nearly 90 percent of my miles are flight miles and I have to fight for an award seat at that airline I am loyal to with all the people getting their miles from hair cuts and buying flowers for their significant others.
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We can complain all we want about the devaluation of FF miles and how difficult it is at times to redeem the miles but can you imagine what life would be without FF miles? Both for us as flyers and for the airlines? The fact remains that we are getting something of value for doing something that we were going to do anyway and to me. paying $1200 to get a business class seat that would otherwise cost over $5000 for a trip to Asia is real value.
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Originally Posted by ani90
There in lies the correlation with the pyramid scheme - only the experts and clever guys will get the considerable advantage, but the majority of flyers will never reap the benefit.
The guys on FT represent the flying elite, people who know the ins and outs of airline industry, fare classes, routing options etc. True many of us may use our miles to the best advantage. But FT members and similarly informed flyers are generally people who design ways to accumulate miles with the very purpose of using them hence the biased few (in favor of miles) seen in response to this thread. However such experts form the minority. For most people who fly and who accumulate FF miles I again say that the miles will likely never be used - they have no clue of all these ingeniuos ways of obtaining bargains to exotic locations. I know several people who take numerous foreign trips related to work (who are also by definition very busy people who barely have time for holidays) and accumalte 100s of thousands of miles every year or two but they will never use them. What would they use them for? Many barely are able to take even 2 weeks holiday in a year. Many of those in FT are different because they seem to have abundance of time and the flexibility to travel at any time of the year, go on Holidays and to take mileage runs and can thus accumulate and burn miles easily, in a way many 'normal' people can not. For most of the trillions of miles in circulation amongst the majority (uninformed flyers) they will forever remain unspent, hence the scam. I suspect the airline industry knows this as they only redeem a small proportion of miles they issue every year. Maybe next time you are in the real world waiting for a delayed next flight ask the person next to you what has he done with his miles lately. But now the airlines are selling their miles to vendors and are using it as a profit center. I have heard that AA made $1 billion in revenue in 2003. I am sure that they do not limit the total number of miles sold in a year. Could you see them saying in December, 2003, "We only want to sell $1.1 billion of FF miles next year." I don't think so. Who is going out of their way to buy things and get FF miles from their purchases? The typical FTer? I am sure that some do. I do. But the airlines also created a whole lot of new FF mile customers who only travel a couple of times a year. A lot of these people will spend until it is time to get their reward. If they cannot get the promised reward, they will be unhappy. You may not see it as such, but these customers are as loyal to their given airline as you are. They will have have spent maybe years going out of their way to only patronize the vendors that offer FF miles on their airline of choice. Once these customers are screwed - and they will be - the vendors will dry up. This valuable revenue source will be gone forever. |
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