I think most of us were discussing domestic coach redemptions because that's the only way to nail down a true value for most of us in the US. I also try to make all of my transatlantic flights in C/J using a mileage upgrade or a systemwide. But there's no way to place a value on those miles because I'd never buy a $6000 ticket to begin with.

I understand that those of you in Aus/Asia don't use the same types of awards that I would. I would probably always use the cheap coach ticket + upgrade approach, thus renewing the miles as you fly (most of the time) in biz.

The two times I redeemed my Skymiles for awards were for tickets to Hawaii from the East Coast. First time was for a ticket on United for 35k (flight times worked out better), second time on Delta for 30k miles. Both flights had a stopover in San Francisco, and priced out close to $1000.

That brings up an interesting point. Maybe the 'value' of FF miles should be what we would have been willing to pay for a purchased ticket, not necessarily what the ticket actually cost. It's doubtful I would have paid $900-$1000 for those tickets (nor would I pay $2k-$6k for an international first class ticket).

Jeff

I've recently (while vacationing in Paris on upgrades to business class on AA) thought about this thread and I have totally re-thought the value of miles. I realizd that AA (as that's where most of my miles are, I will restrict my analysis to AA) provided anytime awards that have no restrictions - thus they represent miles' true value as they can be exchanged for tickets as if they were money.
I assume (if my assumptions are off, please let me know where I'm off) that business class flights to Europe cost about $5,000. Since an anytime business class ticket requires 160,000 miles (since my flights are for leisure travel, I assume the 2 ticket special reduced mileage awards), that works out to about 3 cents/mile. The restricted planahead ticket for 1/2 the miles shouldn't value miles at a higher cost per mile, because the tickets are capacity controlled. I assume that AA would value the planahead miles at the same 3 cents with a value for a business class ticket of $2,500. Thus, an 80,000 mile business classticket (plan ahead) would cost about $2500, while an upgrade would go for 50,000 miles ($1,500) plus the cost of the coach ticket ($1,000 in the summer, less in the winter - that's when the airlines discount (at least coach tickets) to Europe)(total $2,500).
On a related note, I try to buy as cheap a coach ticket as I can and upgrade, as I don't know how to buy a discounted business ticket any other way and the AA miles don't cost me 3 cents - they are basically free (if earned from flying, and maybe the 1+ cent/mile I could get as cash back from a Discover card. But, I can't get a business class ticket to Europe for the $800 in cash back or $500 in cash back on top of a coach fare.

Another issue is how many miles you have. If you have basically unlimited miles (you earn more than you could want to use in a reasonable time), you probably always travel for free. If you don't think you have an unlimited amount of miles, you pay the cheapest coach fare and upgrade (unless you can't afford coach, and then you use miles for coach).

What does everyone think?

.02 is a good benchmark, but only if deciding whether or not to use miles for a domestic coach ticket. Everyone is right in that with premium travel, using miles works out much better per cent wise.

I generally view both options and then make my decision. I have found it easier to book business travel using miles than trying to upgrade on a paid fare with miles. Greater flexibility as well as you have more options for routing as long as city pairs don't change. As for the stopovers allowed on AA, this is fantastic. CO charges something like an extra 15k to stopover en route.

Plus with the alliances, I get the opportunity to fly airlines I normally would not fly on, ie. Cathay Pacific fares to earn AA miles are expensive but mileage awards are even discounted sometimes.

Fares fluctuate so often, the idea of value is perceived by the beholder. If you feel you got a good deal, then you should not be dismayed when the passenger on the plane tells you he got his ticket for $100 or used less miles with reduced mileage award. http://www.flyertalk.com/forum/cool.gif

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"Fly me to the moon and let me earn alot of miles."

As to the value of miles I think it all depends on the individual. I think the argument about whether it is better to use miles for free coach tickets depends on two factors:

1. Amount of miles you have and can earn - if you earn enough miles through business travel or whatever that you will not run out, then why not go first class? If you do not or intend on having a free flight and not having to pay for coach to get a free upgrade, then the coach rewards are better. For me, I have to accrue double the miles (through business travel, credit cards, etc) as my wife does not usually earn miles - many of her trips have been free from my miles.

2. I think one should only value first class tickets at the price the airlines sell them at if that person would be willing to pay that price for them. Often they are over 5 times the price of coach. FC tix are priced as such simply because of supply and demand - there are business and wealthy travellers who will fly only FC and therefore the price is driven up. I highly doubt it costs the airline that much more to fly a passenger FC. It is the simple philosophy of the airlines to extract as much money as they think they can get from a passenger in whatever situation.

Some rewards I did that were good value:

- CO had a special 25K from N.America-S.America. I got a EWR-SCL flight for 25K. I had to purchase the other one and got it for $780 (published fare was $1200). There were flights with some other airlines that were about $100 cheaper, but they required connections or were out of JFK which I did not want.

- Since we were going to Easter Island, I got the SCL-IPC flights for 35K AA miles. That flight is usually priced at $900-$1000 and discounts are rare.

- I think if you take the off peak coach flights for 20K they can be a decent value. Any flight at least $400 would give you the standard .02 per mile. I booked some EWR-TUS flights because the ones with the flight schedules that were what I wanted were all about $600.

I will say that it is more difficult to schedule trips using miles than buying the tickets because the airlines have limitations on the number of reward seats on each flight. Something that was really difficult to schedule was the last one I did- use 20K CO miles and 20K NW miles to get two tix EWR-TUS for two people and have the seats together on the same flight. Even though both airlines can schedule and reward each others' flights, they often have differing numbers of reward seats available on each flight. I had to call back and forth for about 2 hours to get it worked out - it was a pain. Usually this is not the case if you are using miles from one airline only for a trip. Still, it is worth it considering I can plan a better vacation for the same money if the flights are free.

Here is something to ponder: I have to wonder if airlines are expanding the number of reward seats on the flights simply because they are rewarding more miles than ever before. Estimates say that over half of miles rewarded are not earned from flying. That means that many reward flights were earned from miles that were purchased from the airlines which means the airlines are not actually giving away the rewards in all cases. Depending on the partner and the agreement, I believe that they usually pay the airline between .01-.025 per mile. That means that your 25K flight, if the miles were not earned from flying that airline, would actually have costed the partners $250-$625.

If you have some time flexibility, wouldn't using Priceline lessen the ticket cost for domestic travel?

Just my 2 cents (not per mile...) http://www.flyertalk.com/forum/wink.gif

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WooHoo!