How much do mileage programs actually pay for seats?
 

Obviously this varies significantly and it's a mostly academic discussion, but does anyone have any idea how much mileage programs actually pay for premium seats? In the face of rising award rates, I just wonder how much these are actually costing airlines.

I'd imagine it's somewhere between the cost of 1cpm (the average liability mileage programs value them at) times the number of miles, as a lower bound since we can assume mileage programs don't like people to actually redeem them, just as something to aspire to. As a maximum upper bound, I can't imagine then paying more than discount F/J. Anyone have better estimates? How about when crazy non published routings are involved?

It must be a lot more for partners given united's new award chart that differentiates between united and partner awards.

depends on the agreements each airline has with one another. some airlines have a reciprocal agreement on each others flights so they don't charge each other anything.

without diving into it too much I can tell you that F seats one top notch carrier is costing one partner around 16CPM for the longest haul routes.

16cpm is insane! That would price out as more than the discount fares. Thank you for the insight but it begs more questions.

I don't think it will be more than "1.6"CPM. So yes, 16cpm is insane

i recently read that the sin-ewr nonstop in all biz class is being terminated, and the planes returned. it is about 16k miles rt. the cost was about $10k i may not have quite the right airports, or the correct cost, but i am close. the airline does not consider the flight profitable. that is a loaded rate of 60+ cents a mile. first class should be closer to a buck a mile.

a far site from pennies a mile.

maybe the cargo needs to pay its fair share

It's just hard, at least for me, to understand why airlines selling miles for ~0.25 per mile (plus bonus) if they have to pay 0.6 per mile.

When an airline sells a "mile", that is just an accounting unit for the loyalty program. When a loyalty program (either that own airline's program or a partner's) pays for a seat, the "cents per mile" refers to the actual distance of the flight. They are two separate concepts.