Real value of FF Miles in terms of a percentage
 

Hello,

I was wondering if you had any idea of the real value of a roundtrip plane ticket in terms of a percentage of what the ticket cost.

The reason that I'm asking is that I'm planning a tour in France for my 4-piece jazz band. My bass player will probably buy his plane ticket using FF Miles. The point is that once all of our concerts are done, I want to use the money we made to first and foremost repay all of our expenses. I know that I'll be reimbursing about $1,000 to each of the members who bought a normal plane ticket, but what should I give the bass player (in terms of a percentage of what his ticket would have cost without the FF Miles?)

Thanks for your help.

John

In my opinion, the value of what you paid to the others in your group as reimubrsement for their plane tickets. No FF ticket is in my opinion "free", it is a choice to use one asset, the points, in lieu of another asset, cash.

The amount reimbursed should be reported as compensation to the member of the group, in my opinion.

I agree. You have a cost calibration by having purchased tickets on the same itinerary for the other band members. If that's the best deal you could find, all things considered, that's what this ticket is worth.

Some companies have a policy that, if an employee wants to use his/her miles for a ticket the company would otherwise pay for, he/she is reimbursed half of what the cost would be (or some such percentage less than 100%). If that's a stated policy in advance, fine, but I wouldn't try to impose it on the fly.

If you think about how many hours your bass player had to spend cooped up in a sealed aluminum tube to earn those miles, you'll realize (as you may have already) that they're not "free." In the absence of a fair reimbursement policy - objectively fair, but also perceived as fair - for award tickets, he'll keep the miles and buy the ticket.

The guy got their with his own asset. You should pay what it would have cost you to get him there, without regard for what it cost HIM to get him there. You did for everyone else, why not him?

On the flip side, if he had paid for a first class ticket, and you bought coach tickets for everyone else, wouldn't you want to reimburse him for a coach ticket?

Or if he had flown his own plane, wouldn't you still only want to reimburse him at the same rate as everyone else, and not paying for the whole plane?

Don't penalize him for flying on an award ticket.

Just a note to say thanks for your input. I've never used FF miles before, so I wasn't sure of what they're worth conceptually, but these comments definitely help. Best,
John

He should be reimbursed exactly what you are paying the other people.

As a bass player, I already know we get no love anyway. Getting any less cash for the ticket than the other bandmates is just plain wrong.

Don't going into details about the art of handling your financials, I would reimburse the bass player the same amounbt of money as the others

Actually, the bass player's cost is higher, since the trip he's buying isn't earning him any FF miles or status points (if that's an issue), whereas those with paid tickets will be earning miles and possibly EQMs. That's not to suggest that you should reimburse him more than the other band members, though.

Nope
 

No, because he will have the @ $1000 in his pocket (which, if used to buy airfare on a comparable trip, will give him an equivalent amount of miles that the others have earned). Same opportunity cost.

It appears that no one else said it, so...Welcome to FlyerTalk, Mufasa!

Good point.

Looking at it that way, I suppose he actually has a potential opportunity benefit, since $1000 spend on the band's itinerary would limit his ability to maximize his miles-earning potential, whereas $1,000 and a couple of weeks studying the Mileage Run forum here could earn him about 4 times the miles the other band members might earn.

IF - and this is a big "if" - he wants to spend that much time cooped up in a hermetically sealed aluminum tube instead of getting on with what others call "life." FTers might, but we're not exactly a representative sample of humanity. Bass players, for all their supposed personality quirks (I have two semi-pro musicians in my immediate family), are probably closer to "normal" in that regard. :)

Almost, but not quite
 

Let's do the math with a simplified set of asumptions. Every 10 trips earns you miles for a free trip. Miles are "fluid" and so are worth "full value".

A ticket costs $1000, but earns 1/10th of the next ticket, so:

$1000 = 1+1/10 ticket = 11/10 ticket.

so:
$909.00 = 1 ticket w/o miles

and therfore:
Award Miles = 1 ticket w/o miles = $909.00

BUT, the bandleader graciously allowed the other members to keep their earned miles. These are worth 1/10 the award miles used by the 4th. So the other memebers pocketed miles worth $90.90.

So in fairness, if you give the other 3 $90.9 worth of freebies, you should give the 4th guy the same amount. And

$909.00 + $90.90 = $999.90

So the 4th owes 10 cents change.

Or, as a few cheap ... companies tried a few years back, pocket the other 3's miles and pay the 4th $909 :td:

Now, for award availability, income taxes, upgradeability and other issues :(

Actually, he doesn't. That's a rounding error introduced when you rounded the $909 to whole dollars and the other figures to pennies. If you carry it out to more decimal places, or multiply out the fractions as fractions without converting the intermediate steps to $ amounts, you'll see that it's an exact wash.