If miles were freely bought and sold, how much [as a percentage] would miles have dropped in the last year?

With recent real changes and potential changes it is clear to me that my miles are less valuable today than they were even last week.

I am estimating my miles �value� has dropped at least 10% in just the last week [due to new award change fees, new inability to extend award reservations policy, and potential changes brought by US Airways].

What are your estimates and thoughts on this value drop?

I think awards on certain airlines have become less available as well. Plus, elimation of certain discounted awards, the AA change fees...

I would say 20% devaluation.

I'd say miles have increased in value over the past year: let's see, i didn't have toi fly as much to maintain elite level status (saved money on no last minute mileage runs); i enjoyed double mile promotions on all my flights late last fall, i've done great with all these double mile credit card earning promotions (in that alone i earned an extra 60,000 miles so far) and also awards at only 15,000 miles late last fall meant i redeemed for 4 tickets @ 60,000 miles instead of normally 100,000 miles. And the list goes on. Moved to a no fee credit card to earn miles because the credit card business has become more competitive among programs - saved $300 a year right there.

As for the fees, etc. they haven't effected me: i plan award use in advance so there are no express fees, i have not had reason to change itineraries so no change fees, etc. For me, i love all these opportunties that have come my way and figure that my miles have increase in value and opportunity by some 18-30% depending on the program. And for hotels - let's see, stay twice and get one night free. Needless to say Hyatt increased the value of extra benefits earned there by several fold.

If I could trade the X miles I had last week for money these miles WOULD be worth less this week.

As stated miles have also become easier to get...this only re-enforces my premise: [except for a brief period after 9/11] miles have devalued.

AAaLot - I'm having a hard time with your reason that as miles are easier to get they have less value? I can't see how that is so? Does that mean if miles were harder to earn - example: no miles on discount flights or less partners - that miles would have more value?

As for less value than last week? That's only if you are one that wants to change your plans. The actual award costs the same number of miles, nothing else has changed. I guess I could say that if i had traded all my money in for miles a few months back it would be of less value to me today since the price of first class stamps went up as did the price of gasoline recently.

One thing is very true - these changes are not universal - non-elites are not effected; those that don't chage award travel dates are not effected. It's selective value that might change, but as i noted, you must balance that against the things that happen on the plus side.

I find this discussion to be pretty interesting - thanks.

Well put Randy.

I, for one, believe that the $100 change fees with AA award tickets is a positive change. What everyone is looking at is $100. Read between the lines and you would see that it creates more award opportunities. ( 14 Day extension with availability and no extension in a last award seat scenario )

With AA not matching any of the changes that other airlines have made in the past 6 months, I personally believe that my AA miles are more valuable than they were before.

I think a distinction really needs to be made between the ease at which miles may be collected (double rate promotions, credit cards, etc.) and the ease at which they may be redeemed. Whilst there have been increased promotions post 9/11 to encourage travel (by both increasing mileage earning opportunities and making redemptions cheaper in a few instances), the key point regarding the 'value of miles' still remains:

The value of miles is closely tied with ones ability to use them. If there are more and more miles out in the public (and supply of award seats/redemption availabilities in general have not changed) their value has by definition gone down!

The same holds true with easing the barriers to reaching elite status: the more participants, the more crowded the space becomes and the less likely one is to benefit!

Basic supply and demand ... or am I missing something?

OnePass has taken a real hit these past six months or so...far fewer specials, no Q/T fares on most they do have, loss of the HP partnership (making them weaker to the West) and a number of other things.

Probably the most blatant devaluation was the elimination of off-peak awards; the company line on that was that they were taken away because they were hardly ever used (Garbage! Anyone who wanted a standard award and qualified, even for just half a roundtrip, was glad to get the reduction in miles needed. I used them many times.) The off-peak elimination was 20% right there.

But the thing that has me looking around for alternatives is the apparently increasing prevalence of the EasyPass devaluation, where standard awards are scarce but EasyPass is available for twice the miles. Continental wants you to see the glass as half full (i.e. EasyPass enabling something that wouldn't have been possible otherwise), but increasingly it's looking half-empty (EasyPass taking away standard-award seats and being the mechanism of choice to devalue miles by 50%!).

Continental realizes they have a P.R. problem and lately has been putting out aggregate-total statistics on awards redeemed (but with no context on the type of award or how many did not get redeemed, or whether redemptions are anywhere close to the % growth of outstanding miles).

Because of all the different usage and earning patterns, people have different reads on how much of a hit they've taken. Upgraders are different from people who do free-travel awards, and there's always someone who might use awards only to go to Cleveland that Continental could trot out to say, "I have no problem getting awards at the lowest level."

But for OnePass I'd say the ballpark figure would be around 30%, approaching 35%.

And to be fair, in terms of CO miles, I'm earning fewer miles/mile flown than a year ago. I know that some airlines are having some nice bonuses right now, but the cupboard is pretty bare at OnePass.

This is my point.

IF there was a 'stock market' for frequent flyer miles I am sure that we would have see drastic drops for the value of each mile.

Airlines keep this devaluing hidden because you cannot buy & sell miles freely and because it seems like a basic coach ticket is still 25000 miles. BUT this 25000 ticket is not the same ticket as it was a year ago [i.e. fees to change it].

kzoom - You mention "...supply of award seats/redemption availabilities in general have not changed". Statisically there seems to be other facts. From 1993 to 2001 airlines gave away 58% more awards during this period - from 8.3 million (1993) to 13.2 million (2001) on an annual basis. If supply of award seats has not changed then how could this be possible?

P.S. if you ever have a few minutes you might enjoy clicking through a wide variety of frequent flyer programs facts and stats that we have put together.

LINK: http://www.webflyer.com/company/pres...tats/index.php

Love this dialog. Very interesting.

Nope, the miles have devalued on several airlines that added restrictions.

By requiring at least 14/30 days in advance to make an award reservation without incurring a breathtakingly large fee, those awards have been devalued.

Would you say a 28-day advance fare ticket and a 1-day advance are the same product?

I used to use my awards for last-minute travel. Now I can't. That's a devaluation.

Here's the stat to use (I'll keep the years consistent):

1993:
202 billion miles redeemed / 1867 billion outstanding = 11% of outstanding miles were allowed to be cashed in

2001:
342 billion miles redeemed / 7889 billion outstanding = 4.3% of outstanding miles were allowed to be cashed in

Looks like deflation to me, unless of course you think people are willing to hold their miles for 25+ years at that rate.

AAaLot is right on - the draconian restrictions make award seats worth no more than the cheapest fare sale prices.

[QUOTE]Originally posted by Randy Petersen:
" ... Statisically there seems to be other facts. From 1993 to 2001 airlines gave away 58% more awards during this period - from 8.3 million (1993) to 13.2 million (2001) on an annual basis. "

Thanks, Randy, for those interesting statistics that you were pointing to. Whilst the number of awards given out appears to have increased significantly (as you indicated, 58% over the period 1993 to 2002), the key question remains:

Is the ratio of outstanding miles to available awards getting better or worse?

If the statistics are anything to go by, an interesting piece of data in attempting to answer this question is the fact that cumulative unreedemed miles (pogram liability) has in the same period increased over 420% (from 1867.1 billion in 1993 to 7888.6 billion in 2002).

Surely, unless airlines are increasing the availability of redemption opportunities in the same proportion/rate that they are handing out new miles, the value of an individual's miles has got to be going down!

I again disagree with you and AAaLot.

You are both looking at the ratio of outstanding miles to miles redeemed. That is an incorrect analysis.

As times passed, the airlines have grown in size and so have the number of awards redeemed. For e.g. AA would never let you redeem more than 7% of RPM (AA's value) miles flown in awards. As they have increased in capacity, that means more awards are available i.e. increased valuation.

If I could not redeem AA miles for a F ticket from NYC-SIN/BKK/DEL/SYD in 1993 but now have more than six options to choose from in 3 of the 5 best 'F' products in the industry, I do not consider it a devaluation by any standard.