Miles - the worlds biggest currency

Discussion in 'General Discussion | Miles/Points' started by Gargoyle, Apr 1, 2014.  |  Print Topic

  1. Gargoyle
    Original Member

    Gargoyle Milepoint Guide

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    Per an old article in Economist Magazine, the value of all outstanding FF miles is greater than the total amount of U.S. dollar currency in circulation, and much greater than any other currency in circulation. This article is from 10 years ago, but we know it has only gotten way worse. Two ytears ago Inside Flier estimated there were 9.7 trillion unredeemed rewards miles given by airlines around the globe. Estimates are that between 25% and 80% of miles are never redeemed.

    Nice to own a printing press, isn't it?
     
  2. pointshogger

    pointshogger Silver Member

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    A lot of points and miles probably go un-redeemed and even expire, which benefits the programs' profit margin.

    However, we still continue to see devaluations anyway because so many new points are pumped into the system. It doesn't seem like points are expiring as quickly as new points coming into the system; thus the devaluations anyway.
     
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  3. gconnery

    gconnery Silver Member

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    Well then what is the inflation rate for miles/points? Typically if you were planning for retirement you want to plan for 3-4% inflation in your earnings. What percent of our existing miles/points do we need to earn every year just to stay even?
     
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  4. NYBanker
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    NYBanker Gold Member

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    Depends on the type of travel.... Domestic economy awards may have come down in real cost (25k unchanged for many years though miles are easier to come by...plus Avios makes many domestic shorthaul prices even lower than 25k)...while longhaul premium travel has gone up and up and up.
     
  5. gregm

    gregm Gold Member

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    I agree with most, but I put a lot of weight in the inflation theory, referenced in the below comment.
    On average, the price of everything goes up, not down. I doubt anyone would use 125,000 miles for a decent TATL F award ticket if the taxes and 'fees' were $1000+. (Those numbers would vary airline to airline and person to person so make your own limit.)
     
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  6. gconnery

    gconnery Silver Member

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    Well, Southwest started with their new points system on March 1st, 2011 and devalued it on March 31st, 2014. Previously it was 60 points per $ now its 70 points per $. So about 16.66% which is about 5% per year.
     
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  7. foxberg

    foxberg Gold Member

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    Now, if I could have a dollar for every mile and point I have...
     
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  8. TheBOSman

    TheBOSman Silver Member

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    Even a penny wouldn't be too bad :).
     
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  9. gregm

    gregm Gold Member

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    Have a penny, leave a penny, need a penny take a penny!
    If I did, I could retire tomorrow!
     
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  10. Slow_Mustang
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    Slow_Mustang Silver Member

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    If that is what the airlines require, then I have the option to come up with $10K for a revenue ticket, or 125K miles and $1K for an award ticket, or stay home. Personally, I would go with the miles and $1K option. So, don't be so doubtful. ;)
     
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  11. gregm

    gregm Gold Member

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    To be honest, I can't say that I wouldn't do it either! But, as I said, YMMV concerning fees and miles spent.
     

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