Redeeming Miles - How to calculate the value?

Discussion in 'General Discussion | Miles/Points' started by SgtPeppers, Jul 31, 2011.  |  Print Topic

  1. SgtPeppers
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    SgtPeppers Silver Member

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    I am getting ready to travel to Alaska using AA miles.

    ORD-ANC is $650+. However its totaling 50k miles per person. What is considered a good value as far as redeeming miles is concerned?

    Would you use $$ or miles? Would you consider that 4 segments is all you need to get to GOLD status?

    Any advice will be appreciated...
     
  2. mattsteg
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    mattsteg Gold Member

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    It depends on a few things.

    1) How many miles do you have, how rapidly do you accrue them, and what opportunities do you have to redeem them?
    2) What are realistic alternative redemptions? Where and when else might you redeem?
    3) How important is this particular trip, and how able are you to "stick to your guns" and pay cash if you decide your miles are worth more?
    4) How flexible are your travel dates?
    5) If you are an elite, how are you doing for qualification this year? Do you need more EQMs? ORD-ANC-ORD is around 5700 miles.

    You will almost always get the most "value", in terms of relative cost vs purchasing the ticket, with international, premium cabin fares. However, if you would never pay for e.g. international first class, you need to set what you value that experience at and use that for your valuations, not the sticker price of the ticket. For a case like this, where you'd either pay cash or miles, valuing the redemption is a lot easier. Of course, there's now the other half of valuing the miles.

    1.3 cents per mile is not great, and that's what you're getting here. Also, you'd earn miles on the paid fare.
     
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  3. SgtPeppers
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    SgtPeppers Silver Member

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    Great feedback mattsteg. Didn't think about all the questions.
     
  4. MSPeconomist
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    MSPeconomist Gold Member

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    If it were me and I were four segments from Gold, I would purchase the ticket for $650 rather than 50K miles. I value elite status and normally higher status means more redeemable bonus miles are earned per trip, so that the implicit cost is more than 50K miles in this case.
     
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  5. mattsteg
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    mattsteg Gold Member

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    My personal threshold is to try to get around 2 cents per mile, and also to let me do things that I would not otherwise be able to do.

    I'm assuming you are looking at coach seats. If the award you are looking for, or similar, was available at the 25k mile saver level, I would likely jump on it. At the current pricing, I would not feel great about paying or redeeming - it's in that netherworld where the coach seat is expensive, and the premium seat is just a domestic first seat.

    Also, check pricing for first. There might be a biz/first seat available for the same price in miles.

    For sure I'd make sure to get GOLD this year.
     
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