FF mile ticket adventure with AA over Thanksgiving
Nov 22nd, 2008, 09:02 AM
#1
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FF mile ticket adventure with AA over Thanksgiving
When we first tried to make reservations for our NC college attending dtr for Thanksgiving weekend, non-stop flights from Raleigh-Durham to Boston were over $500. So fortunately we had enough AA miles to use the 50,000 miles required.
We have been plesantly surprised to find out that by using these 50,000 miles it entitles us to change the reservation at will without a charge - the latest change being made this AM from a Tuesday flight to Sunday.
With all the fees and difficulty redeeming FF miles, this was a really nice surprise.
We have been plesantly surprised to find out that by using these 50,000 miles it entitles us to change the reservation at will without a charge - the latest change being made this AM from a Tuesday flight to Sunday.
With all the fees and difficulty redeeming FF miles, this was a really nice surprise.
Nov 22nd, 2008, 09:37 AM
#3
Whether you knew it at the time or not, you paid something like 1.5 cents per mile for those, in the form of credit card annual fees, markups from vendors, or skims from the airlines themselves.
Thus the math suggests that 50K miles = $750, so IMO not a great deal.
But of course if you have miles to spare, or no alternative, then good on ya.
Thus the math suggests that 50K miles = $750, so IMO not a great deal.
But of course if you have miles to spare, or no alternative, then good on ya.
Nov 22nd, 2008, 09:42 AM
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How do you get 1.5c/mile Gardyloo?
I use my AA credit card and get 1mile for every $ spent. Annual fee is $50. If I use a different credit card with no annual fee, the merchant charges me the same amount, and I accrue no miles. So my ~50k miles per year using CitiAA card cost me at most 0.1c/mile. What am I missing?
I use my AA credit card and get 1mile for every $ spent. Annual fee is $50. If I use a different credit card with no annual fee, the merchant charges me the same amount, and I accrue no miles. So my ~50k miles per year using CitiAA card cost me at most 0.1c/mile. What am I missing?
Nov 22nd, 2008, 09:59 AM
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Thanks for responses and advice - we happened to have AA miles that we did not expect to use otherwise. The same flights priced today are over $1000 - a silly amount to pay for a 2 hour flight. And to paraphrase the credit card commercial - to be able to get our dtr home earlier and not listen to her whine about how she is the only student still on campus - priceless.
Nov 22nd, 2008, 10:42 AM
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I wonder when you made the reservation, if there were regular First class FF seats available. The regular First class FF seats only "cost" 45,000 miles per seat, so it's a bargain compared to the AAnytime economy FF seats @ 50,000 miles per seat.
DH & I were "forced" to fly First class several times on AA because there were no regular economy FF seats left, but plenty of regular first class FF seats left for redemption.
DH & I were "forced" to fly First class several times on AA because there were no regular economy FF seats left, but plenty of regular first class FF seats left for redemption.
Nov 22nd, 2008, 12:33 PM
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Good reminder, yk.
That is something I stumbled across before and had probably missed out on sometimes.
We only accrue FF miles from flying. We use them when the price for a ticket is more than we want to pay cash and FF ticket is available. This often is when we want to make a last minute trip or help out a relative.
A couple of times last minute I saw that first class was available for fewer miles than coach--delighted my niece who we were flying on the miles. Other times I have forgotten to check.
That is something I stumbled across before and had probably missed out on sometimes.
We only accrue FF miles from flying. We use them when the price for a ticket is more than we want to pay cash and FF ticket is available. This often is when we want to make a last minute trip or help out a relative.
A couple of times last minute I saw that first class was available for fewer miles than coach--delighted my niece who we were flying on the miles. Other times I have forgotten to check.
Nov 22nd, 2008, 02:16 PM
#11
j62, Citibank (RIP?) buys the miles from AA for an amount which is a tightly held secret, but speculated to be in the range of 1/4 to 3/4 cents per mile.
They get it back through annual fees and through interest charged on credit card accounts, and as part of the merchant payment to MC for the transactions. If you're scrupulous at paying off your balance monthly, then your $50 is a good deal if you book more than 7,000 - 20,000 miles annually.
If like the majority of credit card users, you carry a balance of a few hundred dollars for a few months, then the interest payments alone (less MC and Citi's cost of funds) is fabulous gravy, and raises the net cost of miles "awarded" hugely.
If it wasn't good business (a) for Citi or AA to award the miles, or (b) to set high "anytime" redemption levels, then they wouldn't do it. But in fact it's great business: when Air Canada went tango uniform a couple years ago, they sold the Aeroplan FF program to private investors for more than the rest of the airline was worth.
They get it back through annual fees and through interest charged on credit card accounts, and as part of the merchant payment to MC for the transactions. If you're scrupulous at paying off your balance monthly, then your $50 is a good deal if you book more than 7,000 - 20,000 miles annually.
If like the majority of credit card users, you carry a balance of a few hundred dollars for a few months, then the interest payments alone (less MC and Citi's cost of funds) is fabulous gravy, and raises the net cost of miles "awarded" hugely.
If it wasn't good business (a) for Citi or AA to award the miles, or (b) to set high "anytime" redemption levels, then they wouldn't do it. But in fact it's great business: when Air Canada went tango uniform a couple years ago, they sold the Aeroplan FF program to private investors for more than the rest of the airline was worth.
Nov 23rd, 2008, 05:01 AM
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What is your point <b>Gardyloo?</b>
that's a lot of assumptions without knowing facts.... isn't it?
Perhaps the OP earned the miles actually flying?
I don't get it...
OP... You are allowed to change dates on any award ticket, no charge, as long as there is availability. 25K or 50K, doesn't make a difference.
that's a lot of assumptions without knowing facts.... isn't it?
Perhaps the OP earned the miles actually flying?
I don't get it...
OP... You are allowed to change dates on any award ticket, no charge, as long as there is availability. 25K or 50K, doesn't make a difference.
Nov 23rd, 2008, 08:55 AM
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OP is back - with other FF tickets on another airline we had to pay a change fee to make change in itinerary - and it was still using the same 25,000 FF miles.
Miles were earned flying. (husband on business trips). But we also have a USAir Bank of America visa on which we earn miles charging - yes, we pay an annual fee, but since we charge all my husband's business expenses (thousands per month) and our daughter's college room and board every semester AND pay it off each month - those are also very cheap miles.
And to answer another question - trip required 50,000 miles because of Thanksgiving black-out dates. For us, it was worth it to use this many miles for a $500+ ticket. Equipment is a regional jet - one class.
Miles were earned flying. (husband on business trips). But we also have a USAir Bank of America visa on which we earn miles charging - yes, we pay an annual fee, but since we charge all my husband's business expenses (thousands per month) and our daughter's college room and board every semester AND pay it off each month - those are also very cheap miles.
And to answer another question - trip required 50,000 miles because of Thanksgiving black-out dates. For us, it was worth it to use this many miles for a $500+ ticket. Equipment is a regional jet - one class.
Nov 23rd, 2008, 11:24 AM
#14
<i>What is your point Gardyloo?</i>
AAFF, just giving an answer (an overly long one, as usual) to j62's question. The OP has addressed your points above.
As to my assumptions without facts, which ones? Or are you just looking for a spat?
AAFF, just giving an answer (an overly long one, as usual) to j62's question. The OP has addressed your points above.
As to my assumptions without facts, which ones? Or are you just looking for a spat?
Nov 24th, 2008, 12:15 AM
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I still don't get it <b>Gardyloo</b>,
Your post is #3, which I assume it's a reply to the Gail's not J62's post.
You calculated that the OP paid so much for the free ticket.
Perhaps you knew that from a previous thread, but you did not know that from this post.....?????
Your post is #3, which I assume it's a reply to the Gail's not J62's post.
You calculated that the OP paid so much for the free ticket.
Perhaps you knew that from a previous thread, but you did not know that from this post.....?????
Nov 24th, 2008, 01:33 AM
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Availability was an issue - being Thanksgiving blackout dates. But 50,000 miles lets one have any available seat, not just one designated for FF miles.
My dtr is now home, having changed her ticket several times to get home a day or 2 early. We are thrilled to see her and for our present and expected future mile usage and accumulation, this made sense.
Discussions of formulas and conversions for miles to dollars to tickets always fail to take into account individual situations - and with airlines getting tighter on use of FF miles, we no longer "save" them as long - would rather use them than watch them disappear or not be able to use them.
My dtr is now home, having changed her ticket several times to get home a day or 2 early. We are thrilled to see her and for our present and expected future mile usage and accumulation, this made sense.
Discussions of formulas and conversions for miles to dollars to tickets always fail to take into account individual situations - and with airlines getting tighter on use of FF miles, we no longer "save" them as long - would rather use them than watch them disappear or not be able to use them.
Nov 24th, 2008, 06:36 AM
#17
AAFF, the valuation of unused FF miles is, as you're probably aware, the subject of some debate. That they're sold by the airlines to secondary issuers (credit cards etc.) for huge profits is not.
There are rules of thumb and speculations everywhere - Webflyer (Randy's site) has a lot of discussion on this point. I have seen 1.5 cents in many discussions, and up to <i>The Economist's</i> value of 5 cents/unredeemed mile from a couple of years ago. That seems very high, but if you look at, e.g., United's valuation of Mileage Plus, they carry a book value of unredeemed miles of 0.7 - 1.1 cpm, and they're trying to lowball the IRS and auditors on that as it is. AA doesn't even count unredeemed miles in individual accounts as a liability on its books unless the individual account has over 25K miles in it, as that's the redemption threshold. They also assume a 30%+ leakage (miles that expire unredeemed) similar to gift certificates from retailers.
For <b>gail,</b> I think your logic is strong and absolutely fine. I've burnt miles in similar situations where it made the most sense at the time, and if you sensed any criticism in my posts, please accept my apology. None intended.
FF programs are marketing schemes and revenue generators for the airlines, and for consumers to get value from them it's important to use the miles when and how YOU want to do so. If you can obtain good value in the process - not just monetary value but outcomes that are important to you personally - well, so much the better.
There are rules of thumb and speculations everywhere - Webflyer (Randy's site) has a lot of discussion on this point. I have seen 1.5 cents in many discussions, and up to <i>The Economist's</i> value of 5 cents/unredeemed mile from a couple of years ago. That seems very high, but if you look at, e.g., United's valuation of Mileage Plus, they carry a book value of unredeemed miles of 0.7 - 1.1 cpm, and they're trying to lowball the IRS and auditors on that as it is. AA doesn't even count unredeemed miles in individual accounts as a liability on its books unless the individual account has over 25K miles in it, as that's the redemption threshold. They also assume a 30%+ leakage (miles that expire unredeemed) similar to gift certificates from retailers.
For <b>gail,</b> I think your logic is strong and absolutely fine. I've burnt miles in similar situations where it made the most sense at the time, and if you sensed any criticism in my posts, please accept my apology. None intended.
FF programs are marketing schemes and revenue generators for the airlines, and for consumers to get value from them it's important to use the miles when and how YOU want to do so. If you can obtain good value in the process - not just monetary value but outcomes that are important to you personally - well, so much the better.
