Fly with Business Class for Half a Price

Discussion in 'General Discussion | Miles/Points' started by andrewutus, Jan 29, 2015.  |  Print Topic

  1. andrewutus

    andrewutus Member

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    Disclosure: This poster is the creator of the linked indiegogo campaign

    Hi Guys,

    What do you think about this idea? The idea is to be able to purchase SkyMiles in order to book flights. Using this opportunity you are able to save up to 50% on a ticket price. Check the link below for more details:

    https://www.indiegogo.com/projects/fly-with-business-class-for-half-a-price/x/9757511

    In my opinion this sounds like a good idea. Any thoughts?


    Cheers,
    Andrzej
     
  2. mattsteg
    Original Member

    mattsteg Gold Member

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    Not viable. Airlines already sell miles (and cap the sale for a reason) and almost certainly won't do business with you. Sourcing your miles through other means would risk account shutdowns etc.
     
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  3. WilliamQ

    WilliamQ Gold Member

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    Agreed.
    And outright buying miles to purchase a restricted award ticket is generally not a great investment proposal.
    I also believe you do not earn miles on award tickets but not sure of status qualification.
    Not earning anything is fine when your miles were free but in the case where you pay good cash for it, it sucks.
     
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  4. andrewutus

    andrewutus Member

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    @mattsteg
    The whole trick is that I do not transfer my miles from my SkyMiles account...
    I earn my miles by credit card purchases. Therefore, I can transfer miles from my bank account as a reward to any SkyMiles member, so which account would they shutdown? They obviously cannot shutdown my bank account... :)

    @WilliamQ There are certain ways, like for instance using your credit card in casinos to buy chips. Fee for such transaction is 2.3%. for every dollar spent I earn 1.2 mile. I buy chips worth of 100,000$ and earn 120,000 miles, for such transaction i pay only 2,300$. I cash out the chips and I have 120,000 miles which i bought only for 2,300$. How does that sound now? :).

    I made some analysis and it turned out that you can actually get business class flights cheaper when you earn your miles this way.
     
  5. newbluesea
    Original Member

    newbluesea Gold Member

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    Pretty new this are you? :) Every now and then somebody comes also with some super-duper scheme they believe nobody else has tried or heard of before.
    Believe me its been tried.

    Lets start with credit the card/bank thingy - You need to first discover how it works. You will not "get miles in your bank account" your first have open a Delta account and the miles are deposited in that account. It costs $1200 to transfer 120k miles so boom your cost is now $3500.00
    So forget about the "I can transfer miles from my bank account as a reward to any SkyMiles member" part of the story.

    I suppose the only reason to buy $100K chips at the casino would be get around the annual limits since you would by paying about the same as buying directly from the airlines.
    However buying large amount of chips at the casino and then just cashing( without playing) them in isn't something you are going to be able do multiple amounts of times
    Not sure if have actually been to a casino but anytime you cash in large amount of chips the cage always asks what and where you have been playing
    Added to that purchase of casino chips most likely will show up as a cash transaction on your card and get you no miles.
     
  6. Mapsmith
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    Mapsmith Gold Member

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    And would not buying the chips at a casino also trigger as a Cash Advance and immediately put the interest charge into effect. What would be one day's interest on $100,000 Cash Advance figuring a minimum 16.9% APR. It would be a somewhat small amount but it would be a finance charge. It would also probably trigger a hard inquiry on your credit history and cause your FICO to probably drop somewhere around 100 points almost immediately.
     
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  7. webdes03

    webdes03 Gold Member

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    The game has changed a bit with the switch to revenue-based programs, but the way I continue to look at it is this...

    If an airline sells a round trip award ticket from the US to Europe in J at 115,000 miles, and that ticket would normally cost $6,000, then they're valuing those miles at ~5.2 cents per mile. Now if I can earn my redeemable miles at 50-65% of that... a target of 2.5-3.4 cents per mile, then I'm coming out ahead. Obviously every trip is different, and for big trips where we want to be in J or F I plan quite a bit ahead. At the moment, my target is to cover our honeymoon trip, which could cost anywhere from 330k to 440k depending on if it's on UA metal or a *A partner, and if it's J or F. I'll basically never use miles for a domestic ticket, there's not enough value there, and it's very rare that I'll use them for upgrade. To me, those miles have more value when they're used to discount a complete ticket.

    I consider credit card earning miles to be essentially free (aside from the nominal annual fee). I'm going to pay for merchandise anyway, I might as well use the card, and I've never gotten into the manufactured spend game... I don't have the time for that. Aside from CC spend and everyday travel, I still see a place for Mileage Running, though that's certainly a bit different now that the models are based on revenue. United almost always offers a buy-up mileage offer on an itinerary, and I'll almost always bite. They seem to always be around 3 CPM for me, which fits within my target, but even if it was 4CPM, that's still discounted against my target trip.

    I think you're looking at it the right way in the sense that many lay people think a FF program is a gateway to "free" travel, and that's absolutely not the case; especially in a revenue-driven world. The airlines don't help to skew that perspective either... they're always advertising "sign up for x credit card and get enough miles for a free round-trip flight"... that cements the idea to people that being loyal = free travel. There's something to be said (at least at United) for having/maintaining a status, which opens up better award availability and such. At the end of the day, I treat MileagePlus as a mechanism to bank miles at a rate lower than it costs to buy the ticket. I just spent $3k on travel in Q1 just to build up that balance at low CPM's before United's revenue system kicks in (think of it as the last of the true mileage running era). I'll have just about enough miles earned from that to cover the honeymoon trip, so I consider myself ahead of the game.

    So all that said, I don't see the value of the indigogo thing. With a little planning and some math, anyone can already fly business class for half the price, and it's perfectly within the rules of the program... while this indigogo thing is a bit... meh.
     
    Last edited: Jan 30, 2015
  8. Wandering Aramean
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    Wandering Aramean Gold Member

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    Opportunity cost. :-:
     
  9. webdes03

    webdes03 Gold Member

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    Your point being? If I buy something on Amazon for $500 that gives me 500 miles. If I pay off the balance then there's no lost opportunity there. It's the same cost, plus 500 miles. Unless you're referring to what else I might spend my $100 annual fee on, which is peanuts, or if you're trying to play the "this card is better than that card for x category purchases" game, which I don't do. I keep one card that gets me decent benefits and use it for everything. If I got down in the weeds and carried 10 different cards, I'm sure I'd make out better, but my system hasn't failed me yet.
     
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  10. HaveMilesWillTravel
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    HaveMilesWillTravel Gold Member

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    Perhaps you could clarify in your OP that this is a venture YOU are raising funds for, and that to be able to advertise it here, you posted a bunch of meaningless "hi there!" posts all over this site (to reach the threshold for being able to post links)?
     
  11. mattsteg
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    mattsteg Gold Member

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    Bank accounts do not contain miles. There are transferable miles such as Amex MR and Chase UR, but the rules on these are changing to forbid transferring from people that aren't cardholders on the account, family, etc. Card accounts have been shut down for things like this. Just as importantly, accounts that are transferred into have been shut down, and tickets cancelled (in some cases even for "legitimate" activities that are within the published rules (and your plan is not). You need to read the terms and conditions of the programs that you are involved with.
    If you could do similar to what you do with planning, but not need to plan ahead - in theory this would be attractive. In practice, violating program rules, dealing with shady characters, risking account closure and miles forfeiture, even risking being stranded midway through a trip, etc. are certainly not worth it.
    At a minimum you're choosing to spend on that card, instead of e.g. a 2% cashback card. That's fine since you clearly value the miles more highly, but at a minimum you're forgoing what you'd get by committing to another card instead.
     
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  12. Max M

    Max M Gold Member

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    I'm guessing that based on the name of the person running the Indie Go Go campaign being almost exactly the same as your s/n here in MP, you're trying to get people to donate money to you.

    I hope you realize, that most airlines wouldn't hesitate to close frequent flyer accounts in a heartbeat for people buying awards from others for cash. Including exactly what your propose for your Indie Go Go campaign.

    I fail to see the logic in this being a good idea, and am baffled as to why you'd even need the money unless you're trying to first get money to buy miles?

    Why should someone pay money to you to buy miles via your Indie Go Go campaigns for you to sell awards? And you're asking for $50,000???? For what-- a salary? To buy your first hoard of miles to then use to sell awards?

    Surprised someone has already given $50.
     
    Last edited: Jan 30, 2015
  13. Wandering Aramean
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    Wandering Aramean Gold Member

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    This.

    If you're consistently getting better than 2% on your awards then it makes sense. As that starts to slip a 2% cash-back card makes a ton of sense.
     
  14. Mark
    Original Member

    Mark Admin Staff Member

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    Disclosure added to first post noting they're the creator of the indiegogo campaign.

    @andrewutus - please keep this to one thread on the forum
     
  15. r0m8470

    r0m8470 Silver Member

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    I read the IndieGogo thingy and don't get it ....

    "Using my website, you will be able to purchase 102,000 Kris Flyer AirMiles for only 2000 USD, together with carrier surcharges, you will pay for your Business Class ticket only 2,500USD."

    Even if I could do that, that is a redemption rate of 1.9c per mile .... ? That's not a great rate by any stretch. Plus, I thought we could buy miles already from the airline, and it is capped.I thought also that earning miles is not capped, but buying is?

    I have not thought about the casino chip purchase. With 2.3% cost, that's not a great redemption rate either ...
     
  16. kiwi
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    kiwi Gold Member

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    lots of reasons why this won't work

    another is anti money laundering rules
     
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  17. andrewutus

    andrewutus Member

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    Hi Guys,

    Many thanks for your replies. I agree, this is mine campaign. The whole point of putting it up and starting a thread here was to investigate what people who use loyalty programs think about such idea and whether would be keen on doing such deals. I really found it impossible to find any forums where people would discuss over an idea like this.

    Clearly, after your replies, I can already see that it is not a feasible idea (suspicions for money laundering, etc) and simply will not attract any customers (based on your lack of enthusiasm ;) )

    Anyways, thanks for your feedback. I value your comments. oh and btw, the donation of 50USD is mine (donated to warm the whole thing up a bit)

    Cheers
     
    Last edited: Feb 1, 2015

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