Travel Management

How to Manage and Get the Most Value Out Of Your Mileage

As airlines grow smarter with rewards programs so should you.  Award seats are harder to come by because airlines are tightening their belts, and taking advantage of all ways of accumulating miles and redeeming awards.  Arm yourself with the best information on how to be a savvy frequent flier in today’s climate.

KNOW THE VALUE OF A MILE  The key to redeeming miles lies in how the airlines value them.  The industries rule of thumb has always been that a mile was worth about two cents.  The underlying formula:  25,000 miles were required for one round-trip coach ticket, which was estimated to have an average price of $500.00.  $500.00  ÷ 25,000 = $0.02.  But discount airlines and Internet fares have forced ticket prices down:  the average domestic round-trip fare was $362.00 in third quarter of 2008.  One mile has depreciated to around 1.5 cents today.

DO THE MATH  To decide how much an award ticket is worth, make some basic calculations.  Redeeming award seats makes the most sense when the cash value of a ticket is roughly in line with its cost in miles. For instance, when you find a last minute flight to a popular European destination that costs $600.00, and use 60,000 miles – or 1 cent per mile to buy it.

USE A MILES-CASH COMBO  Half the battle of using award miles is finding available seats.  Some newer programs offer a compromise:  Delta’s Pay With Miles program allows you to “purchase” seats with a combination of miles and cash without having to worry about award seat availability.  With Delta’s Pay with Miles you can use 10,000 reward miles to knock down the cost of the ticket by $100.00. 

Finally, be aware that the miles you will – or won’t – earn are a factor in the “real” cost of the trip.  While crunching the numbers is more subjective than ever, at least now you have some options for spending a little less (in miles) in exchange for certainty.

DH

Kathleen Roberts

Kathleen Roberts

Kathleen Roberts is the Vice President of Business Development and passionate about providing innovative solutions for corporate travel programs. She is a member of GBTA and Utah GBTA, as well as a Certified Travel Counselor (CTC) and Global Travel Professional (GTP). In addition to being a travel addict she finds joy in a good game of basketball. Connect with Kathleen on LinkedIn.

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