What you should know about loyalty Miles

After three decades to win and combustion of frequent flyer miles, what we know about their value?

On the eve of the 30th anniversary of the mile - American has launched the first program focused on the mileage in May 1981 - there is no answer to this question. But what we have are ways more than ever to assess the value of a mile. For better or for worse, depending on your point of view, the only consistency between these values is their variability.

Given that the vast majority of the airline miles is used for tickets to award national coach, at a price of 25,000 miles in most programs, a golden rule of basis for the value of a mile of loyalty is the average price of a ticket of paid coach (approximately $350 currently) divided by the miles required, giving us a nominal value of 1.4 ￠ each.

To account for the inconvenience and difficulties - sometimes unable - to find seats at all prices, I infer 0.2 cents of the nominal value, giving us an average value per mile of 1.2 cents.

In most programs, it is possible to obtain more or less value, depending on the market of a comparable paid ticket price.

Cashing in 25,000 miles for a ticket that could be purchased for $100 rendements.4 cents (four tenths of a cent).

On the other hand, to Exchange 100,000 miles for a ticket of class Affairs for Europe at the price of almost $ 11,000 gives a nominal value per mile of 11 cents, a little less with the hassle factor adjustment.

Now again, there are more ways to assess the value of a mile of loyalty.

Merchandise was presented in the catalogues of prices of airlines and outside for years. Although it is an attractive option in theory, in practice these redemptions generally deliver low value.

A few examples at random:

Camera Nikon 14.2 Megapixel Digital SLR, available on BestBuy for $588, costs of 91 000 United miles, producing approximately 0.6 cents for each mile redeemed.

An Amazon Kindle 3 G + WiFi Bundle sale $ 189 at Amazon, fresh 83,400 miles in the program of Delta, or environ.2 cents per mile.

The history of frequent flyer miles is one of the most resemblance to a traditional currency such as dollars, yen or euro.

This evolution has taken a step forward in February when dotcoms, a ubiquitous facilitator of conversion and Exchange miles and loyalty points, teamed up with PayPal to allow programs of the Americans, US Airways and Aeroplan members to redeem their miles for cash credit in a PayPal account. From there, cash can be used to offset purchases paid for the use of PayPal, sent to anyone with an email address or transferred to a linked bank account.

Convenience is one thing, something other value again. And the value differs greatly depending on which program miles are converted into dollars.

Redeem miles for cash American PayPal gives a value per mile of 0.42 cents, approximately one-third the average miles used for flights. Aeroplan Miles are closer to half of the value of miles redeemed flights to choking cents each. And the US Airways miles are worth a maigre.083 ￠ each, approximately 6% of the value of the miles used to fly.

Value of the considerations set aside, there is now only a single degree of separation between miles and cash. The next and last stage: a debit-like card, loaded miles of frequent travellers who have a cash value when used for the purchase of goods and services.

There were other steps in the direction of miles as money baby, each making its own contribution to the concept of consumers' of what a mile is worth.