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High Finance of Flying Free



 
 
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  #11  
Old December 3rd, 2003, 09:53 PM
Reef Fish
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Default High Finance of Flying Free

(Ian) wrote in message m...
In practice, the $850 EQUIVALENT I get from the FFMs for the flight
will have the actual CASH-equivalent (whether I spend it in Hilton hotel
stays or flying on Delta, or any of CO's partners, or use them for
free Business First tickets on CO) that is likely to EXCEED $1,500
rather than just the nominal $850 equivalent.


If the CASH-equivalent is more than $1,500 try offering your FFMs back
to CO and see what they offer you in hard $s. That figure is what
they think the COST is. The VALUE remains at $1,500 to you.


Ian


You STILL don't understand the simplest of economic principles and the
terms "cash equivalent", "value", and "cost", do you?

Let's make it simple for you. I checked the CO webpage just now.
There are several roundtrips from ATL to HKG (2/15/2004 to 2/22/2004)
in First/BusinessFirst for $6,884.84 USD.

CO will accept that amount from anyone in CASH.

CO will accept 120,000 FFM for the same ticket.

It matters not how muddled YOU are about "value", "cost", or "cash
equivalent", the simple fact is -- the 120K CO FFMs are negotiable
as cash toward the purchase of that $6,884.84 ticket.

That means each 1,000 FFM is worth more than $50 USD.

The 42K+ FFMs I get for my ATL/HKG roundtrip then, is worth not only
much more than the $850 nominal value at $20 per 1K FFM, but more than
$1,500. Using grossly truncated figures, the 42K miles are worth AT
least (42 x 50) or $2,100 USD toward the purchase of that one ticket.

The VALUE now becomes $2,100+ USD for that particular application.
The cash-equivalent, value, or whatever you want to call it, VARIES
according to HOW to use the FFMs.

I have right now over 1,000,000 unused CO FFMs. You can BET your
bottom dollar that the VALUE I get out of the 1 million miles will
be MUCH greater than the nonimial cash-equivalent of $20,000 USD.

I am at the EWR airport waiting to complete the last leg of my return
trip which took only 14 hours from HKG to EWR thanks to the tailwind. :-)

-- Bob.
  #13  
Old December 4th, 2003, 12:50 AM
mrt
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Default High Finance of Flying Free

Dennis G. Rears wrote:


One big difference. For a cash purchase if there is an empty seat you will
always get it. This is not ALWAYS true of a FFM award ticket.


Is anyone else like WN? If the seat is available for purchase, it is
available for an FF award

  #14  
Old December 4th, 2003, 04:41 AM
Dennis G. Rears
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Default High Finance of Flying Free


"mrt" wrote in message
om...
Dennis G. Rears wrote:


One big difference. For a cash purchase if there is an empty seat you

will
always get it. This is not ALWAYS true of a FFM award ticket.


Is anyone else like WN? If the seat is available for purchase, it is
available for an FF award


WN does not have FC or INTL flights. I believe the major airlines have
special awards at double the miles for no blackout or capacity restrictions.
That is why I put ALWAYS.

dennis


  #15  
Old December 4th, 2003, 01:16 PM
Binyamin Dissen
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Default High Finance of Flying Free

On Wed, 3 Dec 2003 21:46:26 GMT "Dennis G. Rears"
wrote:

:"Reef Fish" wrote in message
.com...

: (Ian) wrote in message
. com...

: In practice, the $850 EQUIVALENT I get from the FFMs for the flight
: will have the actual CASH-equivalent (whether I spend it in Hilton
:hotel
: stays or flying on Delta, or any of CO's partners, or use them for
: free Business First tickets on CO) that is likely to EXCEED $1,500
: rather than just the nominal $850 equivalent.

: If the CASH-equivalent is more than $1,500 try offering your FFMs back
: to CO and see what they offer you in hard $s. That figure is what
: they think the COST is. The VALUE remains at $1,500 to you.

: You STILL don't understand the simplest of economic principles and the
: terms "cash equivalent", "value", and "cost", do you?

: Let's make it simple for you. I checked the CO webpage just now.
: There are several roundtrips from ATL to HKG (2/15/2004 to 2/22/2004)
: in First/BusinessFirst for $6,884.84 USD.

: CO will accept that amount from anyone in CASH.

: CO will accept 120,000 FFM for the same ticket.

:One big difference. For a cash purchase if there is an empty seat you will
:always get it. This is not ALWAYS true of a FFM award ticket. Another
:small difference is that you will earn some decent mileage with a FC cash
:ticket. You won't get anything for a FFM ticket.

Also, CO will accept less than list price for BF.

--
Binyamin Dissen
http://www.dissensoftware.com
  #16  
Old December 4th, 2003, 02:43 PM
Michael Thiele
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Posts: n/a
Default High Finance of Flying Free

Reef Fish schrieb:
If you CAN'T find flights to spend FFMs at more than the equivalent
value of 2c a mile, then you either don't fly much or you need to
increase your brain size to more than an ounce. ;-)

For 2/14/04 - 2/21/04, a roundtrip on BF to HKG from SEA is $7492+,
so the 42K FFMs I got from my present trip is worth more than $2,500,
if applied to that trip in BF Class.


i can understand FF miles have a high value for people wanting to fly
business class. It is a fact -at least for europe- that the lowest coach
fare is usually less than if you value the miles with half a cent. It is
even quite common to find low cost carriers who fly for less than the
airport tax of the network carriers that you have to pay anyway if you
use miles. For exemple: No problem to get a flight anyway within Europe
foraround 100 EURO, at least 150 RT incl. taxes. Average tax for flying
network carrier RT thru their hub is 70-80 EUR. So I value my 25,000 LH
miles about 100 EUR, which equals the value of a non-flight redemption
(like Investmentfonds). If you pay me 500 USD for me booking a RT for
you, okay.

You should watch that stupid Adam Sandler movie "Punch Drunk Love". He
buys tons of joghurts (4 for 99 cents) because this way he will receive
many 500 AA miles vouchers for 2,50 USD each for his first flight in
livetime to Hawaii!!!

  #17  
Old December 4th, 2003, 05:35 PM
Reef Fish
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Posts: n/a
Default High Finance of Flying Free

(me) wrote in message . com...
(Reef Fish) wrote in message . com...


Thought it was 25%, but I might have it confused with Delta.
Delta I think charges about 4 cents per, CO was charging 3.2 plus
tax for theirs.


"me" You valued FFM at 2 cents per mile, which is a bit high.

You seem to be contradicting yourself here. I have never purchased
any mile from any airline, but if you say they are charging 3 to 4
cents a mile, how can you say 2 cents per mile is "a bit high" for
the miles you DON'T have to purchase?



If you place your miles at less than 2c a mile, then you are not using
your miles JUDICIOUSLY or wisely. That's all.


That's the case for ALL airlines.



I understand what you mean, but this can be difficult to acheive.
I've got something on the order of 120,000 miles on Delta. Everytime
I try to use them, "judiciously" I am blocked.


Don't fly Delta then. ;-)

For me, they are most
valuable when traveling to europe, but I have a hard time using them
when I need/want them. But the flip side is I have them because
I won't use them for domestic tickets that would correlate to about
1 cent/mile or less.


Back to the "Elite status" that correlates with the FFMs you get. For
CO domestic flights, I have had 100% FREE, (now automatic) upgrades
since 1999.


In fact, let's consider using the CO FFM on a Continental flight to HKG!
I took an arbitrary date of 1/14/2004 from ATL and return on 1/21/2004.
The LEAST cost of a Business First ticket is $6,377.86, with most of the
available connections on the web over $7,000. It takes 120,000 FFM
for such a ticket.


When you can get it at all.


Why can't you? On the latest trip (including one of the busiest days)
the BusinessFirst section had a dozen or so empty seats while the coach
section was full, on both the EWR/HKG and HKG/EWR legs. The BF upgrades
can be requested up to 3 days before departure, and why wouldn't CO not
take your 120,000 FFMs? Only because you don't have them! :-)


The 42,000+ FFM I got from this trip is more than 1/3 of the FFMs
required for the BF ticket -- and it doesn't take a rocket engineer
(a very dumb expression G) to see that the FFMs so applied are
worth MORE than $6377.86/3 or $2,100+.

Thus, using it THAT way, you get MUCH more than the nominal value of
$20 for 1000 or 2c a FFM. That's an example of using the miles WISELY.


Accountants would argue with you about this.


The ones who would aren't the kind who teach accounting at the prestigeous
graduate schools of business.


For 2/14/04 - 2/21/04, a roundtrip on BF to HKG from SEA is $7492+,
so the 42K FFMs I got from my present trip is worth more than $2,500,
if applied to that trip in BF Class.

I am SURE there are PLENTY other flights for which the FFMs are worth
more than $60 per 1K FFM besides that example.

Now you see why $20 per 1K FFM is the nominal value used by airlines.
It counter-balances those flights that cost much more $ per 1K FFM
to those flown by people like you who get only $13's worth for YOUR
1K miles.

You're welcome for this free lecture. :-)



You might wanna have this with your accountant, he might see things
a tad differently.


See my preceding remarks about accountants. Besides, what THEY think is
entirely irrelevant to what *I* actually practice and use, and I KNOW
how to do a cost-benefit analysis properly that is indepedent of the
flyer's discipline/profession.

-- Bob.
  #18  
Old December 4th, 2003, 05:48 PM
Reef Fish
external usenet poster
 
Posts: n/a
Default High Finance of Flying Free

"Dennis G. Rears" wrote in message et...
"mrt" wrote in message
om...
Dennis G. Rears wrote:


One big difference. For a cash purchase if there is an empty seat you

will
always get it. This is not ALWAYS true of a FFM award ticket.


Is anyone else like WN? If the seat is available for purchase, it is
available for an FF award


WN does not have FC or INTL flights.


Then I would NEVER fly WN.

For domestic flights on CO, I ALWAYS (since the present Elite system
started in 1999) got complimentary upgrades from coach to First. I
can even recall an incidence or two in which I VOLUNTEERED to get
bumped to a later flight (for the First class seats), also in First
class (complimentary) while being PAID (and this was CO cash!) for
the bump.


I believe the major airlines have
special awards at double the miles for no blackout or capacity restrictions.
That is why I put ALWAYS.

dennis


For pragmatic reasons, your "ALWAYS" seems ALWAYS irrelevant to my
flights on CO, even though CO does have some blackout dates and
capacity control on its seats. :-)

-- Bob.
  #20  
Old December 4th, 2003, 09:27 PM
Anthony Craig
external usenet poster
 
Posts: n/a
Default High Finance of Flying Free


(Reef Fish) writes:

In practice, the $850 EQUIVALENT I get from the FFMs for the flight
will have the actual CASH-equivalent (whether I spend it in Hilton hotel
stays or flying on Delta, or any of CO's partners, or use them for
free Business First tickets on CO) that is likely to EXCEED $1,500
rather than just the nominal $850 equivalent.


If the CASH-equivalent is more than $1,500 try offering your FFMs back
to CO and see what they offer you in hard $s. That figure is what
they think the COST is. The VALUE remains at $1,500 to you.


Ian


You STILL don't understand the simplest of economic principles and the
terms "cash equivalent", "value", and "cost", do you?

Let's make it simple for you. I checked the CO webpage just now.
There are several roundtrips from ATL to HKG (2/15/2004 to 2/22/2004)
in First/BusinessFirst for $6,884.84 USD.

CO will accept that amount from anyone in CASH.

CO will accept 120,000 FFM for the same ticket.

It matters not how muddled YOU are about "value", "cost", or "cash
equivalent", the simple fact is -- the 120K CO FFMs are negotiable
as cash toward the purchase of that $6,884.84 ticket.

That means each 1,000 FFM is worth more than $50 USD.


Reef Fish,

I agree with others that your economics are not as general as you
imply. You suggest that FFMs are worth 2c/mile and that it might
really be 5c/mile. Sure, there is a case where CO will exchange
the FFMs at 5c/mile (above example).

In my world, I would never use 120k FFMs for a business class ticket.
I would use them for 2 economy class round trips. So lets say
those cost $1k each (generous). That works out to 1.6 c/mile. Each
individual will value FFMs at different rates. If you think they're worth
2c/mile or 5c/mile, that's fine. But don't suggest everyone does, and
don't suggest that someone not getting 2c/mile out of them is not
using the "right". It's not just the airline fares versus FFM. It's
how an individual uses/views the purchasing power of the FFMs. If I
can buy a $1000 economy ticket to Asia, I would purchase an upgrade to
business class for no more than $200. That's how I value it. It's just
not worth much to me. The $6000 upgrade cost on CO is irrelavent and
useless as a benchmark for me. The same is true of hotel rooms, but I
won't go there. I think I've made my point.

In fact, with all the low fares of the last couple years, I'm starting
to think FFMs are worth 1c/mile. At that level, it's often difficult to
justify using them. The fare must be greater than $250 for domestic US,
$500 for europe, or $600 for asia. That's pretty much where fares are
right now for restricted, advance purchase. (Again, in my world).
I have used FFMs for summer travel to Europe (if you can get them)
and plan to use them for travel to Australia in the next year. Otherwise,
it's tough for me to find cases where they're worth much more than 1c/mile.

Let me just summarize; please don't criticize others if they value
FFMs less than you, and it's not fair to say folks are not using them
right if they get less than 2c/mile. By the way, just for reference,
I currently have over 300k miles in my FFM accounts and have used about
200k FFMs in the last few years using the strategy above.

tony.........

 




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