What do corporations pay for miles?
Aug 8, 2003 | 12:43 pm
#2
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The various estimates that have been given in past threads have varied from 0.9 cents for very large purchasers to 1.5 cents for significant but less large purchasers.
Aug 8, 2003 | 1:15 pm
#3
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<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by MileKing:
The various estimates that have been given in past threads have varied from 0.9 cents for very large purchasers to 1.5 cents for significant but less large purchasers.</font>
The various estimates that have been given in past threads have varied from 0.9 cents for very large purchasers to 1.5 cents for significant but less large purchasers.</font>
Aug 8, 2003 | 1:24 pm
#4
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What your wife pays for merchant fees and what the credit card companies pay for millions of miles are two completely different things. Sure, the spread doesn't look too great, but the card companies do a LOT of volume. They charge interest, late fees, etc. and they collect all sorts of annual fees for mileage-earning cards. That's where the real money is for them.
Aug 11, 2003 | 7:35 am
#5
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<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by MileKing:
The various estimates that have been given in past threads have varied from 0.9 cents for very large purchasers to 1.5 cents for significant but less large purchasers.</font>
The various estimates that have been given in past threads have varied from 0.9 cents for very large purchasers to 1.5 cents for significant but less large purchasers.</font>
Aug 15, 2003 | 12:52 am
#6
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There have been numerous threads on this topic over the years, and no one has ever posted exactly what the large companies pay for miles.
In this thread, milesrus asserted that in 2001, Citibank paid AA $678 million for miles.
At one cent each, that would be 68 billion miles.
No matter how you slice it, that's an awful lot of money for miles that will eventually be redeemed for capacity-controlled award seats and upgrades.
Although some airline employees still don't understand the economics of mileage programs, it is clear that award seats are not always "free." AA, along with Citi and other partners are actually selling the award seats a mile at a time to millions of customers.
In this thread, milesrus asserted that in 2001, Citibank paid AA $678 million for miles.
At one cent each, that would be 68 billion miles.
No matter how you slice it, that's an awful lot of money for miles that will eventually be redeemed for capacity-controlled award seats and upgrades.
Although some airline employees still don't understand the economics of mileage programs, it is clear that award seats are not always "free." AA, along with Citi and other partners are actually selling the award seats a mile at a time to millions of customers.
Aug 15, 2003 | 8:31 am
#7
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The FF arem of airlines has been the ONLY part making money in the last year or two I recall reading.
Randy gave a potential "break up" figure for MP if UA went under, and it was based on what AC sold of a slice for. It ran IIRC way into the BILLIONS - just for MP.
Randy gave a potential "break up" figure for MP if UA went under, and it was based on what AC sold of a slice for. It ran IIRC way into the BILLIONS - just for MP.