Value of all outstanding airline bonus programs together
 

Hi,
I am not sure, I am on the right board here. But does anybody of you know, what the value of all outstanding mileage programs taken together is in USD or EUR? I once heard a figure of some bn dollars but I would like to know it in more detail.
Any of you knows the anser or could guide me to a ressource where I can find such information?
Thanks a lot,
Fidibus

Hi Fidibus!

Welcome to flyertalk and thanks for posting. We have a forum "MilesBuzz" which is about general miles stuff not related to a specific airline/hotel program.

I'll just forward this thread to this forum.

Keep on posting - you will soon find out what wonderful place flyertalk is.

Regards,
ralfkrippner, communitybuzz co-moderator

Whatever the value you may see one place, it's bound to be different in another place.

That's because there is no ONE value of a mile. It depends GREATLY (by at least a ratio of 5 to 1, maybe even 10 to 1 or more) on how it's redeemed (from first class international flights on 3-class aircraft to domestic coach flights is already about 5 to 1, then throw in occasions to redeem for merchandise and/or magazines that some airlines offer and that's even lower worth than for domestic coach flights often).

And that doesn't even factor in the ratio of 1 to infinity that you get when you consider the oodles of accounts that have miles in them that will expire (after 1 to 3 years of no mileage activity at most airlines)!

(And the cost of acquiring a mile is highly variable too.)

And that's the beauty of it: Miles are not taxable BECAUSE no one can figure out the value of them in taxable currency!

Now, when forced to for accounting purposes like estimating redemption liability, an airline may "think up" a value, but that's only the value it thought up for THAT purpocse. For another purpose (like selling them to partners like hotel chains, rental car chains, etc) it might put a completely different value!

http://www.usatoday.com/travel/fligh...t-fliers_x.htm

I wonder if there's there an estimate of the profit airlines are making by passengers who simply do not accrue miles. What would happen if suddenly all passengers would start earning miles on all flights...?

That is a very helpful link you sent me here. Many thanks!

Probably not much of a difference, because probably the vast majority of the passengers who do not accrue miles (but can*) would not accrue enough miles to matter before they expired.

Remember, at most airlines miles expire with zero activity in one to three years. A huge chunk of passengers who don't accrue miles are infrequent travelers who furthermore fly a different airline each time (because they choose based on price or convenient times, and may be flying to a different destination each time served most conveniently by a different airline for each such destination) and thus are not likely to repeat the same airline even every three years.

http://www.ideaworkscompany.com/pres...ewards2006.pdf

hope this helps

My gut feeling is that many people fly at least once every 1-3 years, often with the same airline (or a partner), and still don't bother. Furthermore, I noticed that a lot of travelers are not familiar with the notion of airline partners. I recently met folks who traveled with an RTW ticket, not realizing that all the carriers were partners in the same FFP...

Airlines publish revenue-passenger-miles (RPMs), but how many of these are accrued?

For example, UA announced 9,811,660,000 RPMs in April '06, so potertially, if every passenger accrued miles on every flight, that would amount to at least this amount of miles (not taking into account bonus miles such as class of service miles, status miles, and special promotions) - or roughly the equivalent 400,000 US domestic Saver Awards... and that's just in one month.

Well, I bet many people are not really even aware of what airline they're flying! I mean, yes, they are aware at the time they go the airport (becaue they have to know which line to get in), but may not remember a few months later and may not remember if asked a week before.

Keep in mind that there's some signficant percentage (more on some flights than others) of flights booked through consolidators, tour companies, cruise companies, etc, where the passenger thinks of the flight as being from the company that sold them the package (rather than the airline).

And, in fact, in some cases (primarily international), these consolidator/tour group/etc fares may not even QUALIFY for mileage earning (even if the customer is a miles collector, therefore, it may not always help).

(At some European airlines regularly, and even on occasion with some US airlines, you also can't get miles on the cheapest internet sale fares.)

Because not all flights/fares qualify for FFPs, you couldn't possibly have miles awarded on all flights by all customers.

Airlines like miles in part for the same reason that some manufacturers or retailers like rebates: A certain percentage of the result is publicity without payoff (because the customers don't always fullfill the requirements). They LIKE having requirements which iinvolve a little "jumping through hoops", because it saves them money when x percent of customers don't take advantage (of a rebate, or of miles).