I found this...it may be of interest to you.

http://money.howstuffworks.com/ff-programs.htm

If you travel at all, you've probably thought about getting a frequent flyer card so you can earn miles for free travel. Or, you may already have an assortment of frequent flyer cards riding around in your wallet. Do you ever get enough miles for a free flight? Lots of people do. Today's frequent flyer programs offer benefits above and beyond free air travel. And, you can earn miles without even traveling anywhere! How does that work exactly?

In this edition of HowStuffWorks, we'll explain what frequent flyer programs are, how to choose one, how to earn miles, and how you can put those miles to use!


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Take the road less travelled...but only if it means more miles.

"The actual monetary value is 2 cents per frequent flyer mile -- reportedly the airline industry average."

IMO, the author lost all credibility with that above statement. I'd love to cash in my miles for 2 cents each.

Sin1K,
Nice link, this is very informative and something I will pass on to my neophyte
(in)frequent flyer friends. Thanks.

This is just what I need to add to a recently created powerpoint presentation that I plan to share with some friends, family, and co-workers to help them maximize value from the various airline/hotel programs.

Depends on how you use them. I just bought two RT BUF-CDG Business Class tix. 80,000 miles each. At 2 cents, that $1600. That's probably in the right ball park for a purchase like that.

Of course, if you buy a first class ticket for LGA-PIT with miles, you're ripping yourself off.

I agree. For my informal calculations, I use 2 cents per mile as well. For my usage pattern, it's the right valuation.

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Vasant

The "airline industry average"? Sorry, I don't think the airline industry values mile at 2 cents each - the author's off by at least a factor of 10. And it's not an "actual monetary value"; otherwise we'd be able trade them for cash - it's an opportunity cost. And even if the mean FF valuation was 2 cents/mile, I doubt that the median valuation would be that much, which I would believe to be the more important data point for an article like this - if you disagree, please explain why when economists report on the state of the housing industry, they talk about the median price, not the mean.

What makes you think they are talking about a mean or a median? In order to do so, they would need to actually have some population (all frequent flyers/all companies/all award tickets issued) that is measured on how they value miles. Instead, the term "average" is just a journalist's way of saying "this is the number I get when I asked a couple people around the office".

But there is a good reason for the economists to use the median with home prices - and that is because the distribution of prices is skewed, with some prices being extremely high, and none being as extremely low. For that to be the case here, you would need some people/companies/tickets to value a mile very high. That may or may not be true.

Examples where people have received 6 or 8 cents "value" per mile can easily be found, but that doesn't mean miles are worth 6-8 cents each. Many people may say that, but their behavior is another matter. If miles were worth 6-8 cents each (or even 2 cents each), why didn't more people take advantage of the ValueMags promotion? Why is InsideFlyer not selling bazillions of subscriptions with its current bonus promotion of 3000 miles per? Why do people not stock up on airline miles at 2 or 2.5 cents each by buying up to the maximum directly from the airlines?

We should be looking at what the lowest redemption value you actually WOULD use miles for as the "true" value. If you would redeem 25K miles for an award ticket instead of paying $475 out of your pocket for the domestic leisure coach fare (non-reimbursable by your employer), then it's difficult to say miles are worth 2 cents each.

For me, it's about 1.3 cents per mile. That doesn't mean I don't receive more value for my miles, as I very frequently do. It's simply that is the point at which I switch to using miles rather than paying cash.

I would never cash in miles for this lowball figure. In the past two months, I've redeemed 260,000 miles, 125K for a TLV-LHR-JFK round trip on BA, all in First except LHR-JFK on Concorde, and 135K for LAX-SYD/MEL-LAX in F on QF. Seeing as how full fare for each of these tickets is around US$10,000, I spent the miles at an average of 7.75 cents each.

I've also redeemed 145K for a trip later in the year for a longhaul roundtrip in CX F at a similar cost.