WSJ: Are Frequent-Flier Deals a Good Deal?
Aug 18, 2010, 4:07 pm
#1
Original Poster
Join Date: Apr 2001
Location: USA
Posts: 8,031
WSJ: Are Frequent-Flier Deals a Good Deal?
THE WALL STREET JOURNAL
AUGUST 19, 2010
Investors who follow the adage buy low, sell high may want to avoid airline "bonus mileage" programs. Travelers who buy frequent-flier miles pay about 3 cents per mile, but then they typically redeem them for tickets at 1.5 cents each—or even less.
Mileage bonus programs—in which consumers buy frequent-flier miles directly from the airline—are popular with travelers. US Airways says about 5% of its customers are opting to pay to double or triple their miles when they buy tickets, and that revenue from mileage sales was up 236% in the first six months of this year compared to the same period of 2009. Sales on AirTran Airways' program are up 40% this year, a spokesman said. Alaska Airlines said its mileage sales are "very robust" and now top $1 million a month. United says it's doing 700 double- or triple-mileage transactions per day.
American Airlines won't say how many of its customers are buying since its May launch of the "Mileage Multiplier" promotion, where ticketed passengers can pay a fee and earn double or triple the miles on a trip. But some are going in for 10,000 and 20,000 miles.
http://online.wsj.com/article/SB1000...277727948.html
AUGUST 19, 2010
Investors who follow the adage buy low, sell high may want to avoid airline "bonus mileage" programs. Travelers who buy frequent-flier miles pay about 3 cents per mile, but then they typically redeem them for tickets at 1.5 cents each—or even less.
Mileage bonus programs—in which consumers buy frequent-flier miles directly from the airline—are popular with travelers. US Airways says about 5% of its customers are opting to pay to double or triple their miles when they buy tickets, and that revenue from mileage sales was up 236% in the first six months of this year compared to the same period of 2009. Sales on AirTran Airways' program are up 40% this year, a spokesman said. Alaska Airlines said its mileage sales are "very robust" and now top $1 million a month. United says it's doing 700 double- or triple-mileage transactions per day.
American Airlines won't say how many of its customers are buying since its May launch of the "Mileage Multiplier" promotion, where ticketed passengers can pay a fee and earn double or triple the miles on a trip. But some are going in for 10,000 and 20,000 miles.
http://online.wsj.com/article/SB1000...277727948.html
Aug 19, 2010, 4:19 pm
#2
Join Date: Apr 2010
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Programs: DL PM, UA *S, SPG/MR Gold, IHG Spire, Hertz PC, pleb in all the rest
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Fortunately, extremely savvy investors (all present company included), know how to time things properly and "buy" low and redeem high. That might be the whole point of FT.
Aug 19, 2010, 11:48 pm
#3
FlyerTalk Evangelist
Join Date: Feb 2007
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Aug 21, 2010, 11:25 am
#4
Join Date: May 2002
Location: Cows in Berkeley?....Moooo!
Programs: Fly Amtrak, Go Greyhound! I'm often wrong but always sincere.
Posts: 7,102
I think the article is spot on that one of the only times buying miles makes sense is if you are trying to top off for a premium award.