High Finance of Flying Free

In an earlier post, I had written:

Our AIRLINE portion to Hong Kong was FREE (I just figured it out,
amidst all this high-flying finance in the wee hours in Hong Kong :-)

Actually is more than free! CO paid us to fly. The details of this
will be posted under something like the "High Finance of Flying Free".

Here are the details.

The roundtrip 8826 x 2 miles from ATL to HKG via EWR totalled 17,652
Miles. Since a Platinum member of OnePass gets a bonus of 125% Frequent
Flyer Miles, the total becomes 17,652 x 2.25 or 39,717 FFMs.

One also gets 1,000 FFM for booking it on the web (each time), 1,500 FFM
for staying at the Conrad International Hilton (normally 500 CO FFM
for each stay, but it's "triple miles" time till year end), and 744 CO
FFM from for each $ of the price of the ticket I paid ($744 ATL/EWR/HKG)
charged to my VISA card.

That puts the total FFM earned on the one roundtrip at 42,491.

At a nominal value of $20 USD for each 1,000 FFM, that's the EQUIVALENT
of $850 USD for each of our COACH tickets, which costs only $774!

This detailed accounting revealed, unexpectedly, that the value of the
FFM for the ATL/EWR/HKG roundtrip ($850) not only paid for the cost of
the trip ($774), but leaves a balance of $76 which may be considered
as what CO paid me fo take a FREE roundtrip flight to Hong Kong!

A final thought on this High Finance is that since there's plenty of
food and beverage on these flights to render it unnecessary to spend
any money on meals, one can make an "easy living", by doing nothing
but flying back and forth from between ATL (or some other city) and
HKG, in the manner the Indian (story in a recent thread who is flying
between London and India every other day to try to establish a Guinness
record on the number of miles flown within one year on one airline).

It'll be left as an exercise for the pedantic to show that Mr. Hong
Kong Fly (assuming a Platinum Elite status on CO) can net in excess
of $10,000 USD in one year, while earning in excess of 2,000,000 CO
FFMs to have a good shot at the Guinness World Record being attempted
by the London Indian. :-)

Furthermore, with such a World Record until his belt, Mr. Fly will be
invited to appear in the Larry King Show, David Letterman Show, and
other talk shows to talk about his talent in overcoming the boredom of
flying 2M miles in a year, and he can write, or hire a ghost writer
to write, a book for him, become a "best seller", drawing millions of
$ in royalty. This in turn will attract Hollywood to make a movie
about him and his flying adventure, and in view of his popularity and
free exposure in the media, he may even become a Governor of California,
a US Senator, or the President of the United States, for his movie
career based on his Frequent Flying on CO! :-)))

No, I can never be a prez of the USA because I can't stand the boredom
of flying OR that of just being a prez of the USA. Thanks in
advance for asking.

-- Bob.

Reef Fish wrote:
In an earlier post, I had written:


Our AIRLINE portion to Hong Kong was FREE (I just figured it out,
amidst all this high-flying finance in the wee hours in Hong Kong :-)

Actually is more than free! CO paid us to fly. The details of this
will be posted under something like the "High Finance of Flying Free".

You paid money for the ticket to get miles, how does this make it free?

"Odorous Reef Fish" wrote:


In an earlier post, I had written:

Our AIRLINE portion to Hong Kong was FREE (I just figured it out,
amidst all this high-flying finance in the wee hours in Hong Kong :-)

Actually is more than free! CO paid us to fly. The details of this
will be posted under something like the "High Finance of Flying Free".


I thought they shipped fish such as yourself on ice in containers? Or if
live, in plastic bags?


Here are the details.


"Yaaaaaaaaawn......"


No, I can never be a prez of the USA because I can't stand the boredom
of flying OR that of just being a prez of the USA. Thanks in
advance for asking.


Odorous Reef Fish, you would be a crummier Prez than even the current dope
we have. And *that* is saying something....

--
Best
Greg

mrt wrote in message . com...
Reef Fish wrote:
In an earlier post, I had written:


Our AIRLINE portion to Hong Kong was FREE (I just figured it out,
amidst all this high-flying finance in the wee hours in Hong Kong :-)

Actually is more than free! CO paid us to fly. The details of this
will be posted under something like the "High Finance of Flying Free".

In the post in question, I explained fully why and how.



You paid money for the ticket to get miles, how does this make it free?

In another thread in this ng, there was this:

"mrtravel" is the usenet handle of a brainless usenet troll whose
real name is Michael Voight .
Some of his other trolling aliases are Network
Guy, , sleepydoc ,
, and Lost 5 of 8 .

His latest one is mrt .

Is any or all of the above true?

-- Bob.

That puts the total FFM earned on the one roundtrip at 42,491.

At a nominal value of $20 USD for each 1,000 FFM, that's the EQUIVALENT
of $850 USD for each of our COACH tickets, which costs only $774!

This detailed accounting revealed, unexpectedly, that the value of the
FFM for the ATL/EWR/HKG roundtrip ($850) not only paid for the cost of
the trip ($774), but leaves a balance of $76 which may be considered
as what CO paid me fo take a FREE roundtrip flight to Hong Kong!

The crucial word in your post is "EQUIVALENT". You have exchanged 774
of your precious dollars for a service (the ATL/EWR/HKG r/t)plus
42,491 FFM (which will be exchanged for another 'service'in the
future).

That explains what VALUE you have received, but the 'COST' is
something entirely different. Try adding to your $774 some of the $s
spent achieving Platinum OnePass status.

Next, look at the transaction from CO's standpoint. When you come to
'spend' your 42,491 FFM, think how much CO will have to spend in $
terms to give you the flight. $50 maybe? Then think how much CO
spent on your ATL/EWR/HKG trip - another $50 maybe? So CO has $774 of
your money which it has spent maybe $100 giving you in return. I'd
say that CO was well up on the deal!!

Best regards
Ian

(Reef Fish) wrote in message om...
mrt wrote in message . com...
Reef Fish wrote:
In an earlier post, I had written:


Our AIRLINE portion to Hong Kong was FREE (I just figured it out,
amidst all this high-flying finance in the wee hours in Hong Kong :-)

Actually is more than free! CO paid us to fly. The details of this
will be posted under something like the "High Finance of Flying Free".

You paid money for the ticket to get miles, how does this make it free?

In the post in question, I explained fully why and how.

Yeah, what you explained was that you were paying roughly $800 for
a ticket and getting roughly $800 worth of FFM. However, I suspect
that for that $800 worth of FFM, you couldn't get the ticket you
bought. (It takes 60,000 miles or $1200)

You valued FFM at 2 cents per mile, which is a bit high. I usually
place them somewhere between 1 and 1.5 cents per mile. (The above
suggests actually about 1.3 cents per mile).

For a CO Platinum elite member it's a neat trick. The really neat trick is
figuring out how to "spend" the FFM's. FF have literally hundreds
of thousands of miles they don't seem to be able to use. As such,
the $800 worth of FFM would seem to be worth a bit less than you imply.
But if you can find something to spend them upon, go for it.

(Ian) wrote in message om...
That puts the total FFM earned on the one roundtrip at 42,491.

At a nominal value of $20 USD for each 1,000 FFM, that's the EQUIVALENT
of $850 USD for each of our COACH tickets, which costs only $774!

This detailed accounting revealed, unexpectedly, that the value of the
FFM for the ATL/EWR/HKG roundtrip ($850) not only paid for the cost of
the trip ($774), but leaves a balance of $76 which may be considered
as what CO paid me fo take a FREE roundtrip flight to Hong Kong!

The crucial word in your post is "EQUIVALENT". You have exchanged 774
of your precious dollars for a service (the ATL/EWR/HKG r/t)plus
42,491 FFM (which will be exchanged for another 'service'in the
future).

The preceding paragraph is almost EXACTLY right. It can be exchanged
for the future purchase of GOODS also.


That explains what VALUE you have received, but the 'COST' is
something entirely different. Try adding to your $774 some of the $s
spent achieving Platinum OnePass status.

This part is absolutely WRONG.

Imagine CO hands me $850 USD in cash after the roundtrip flight. Then
my net COST for the FLIGHT is -$76 (minus $76) or a net GAIN of $76.

While it is true that CO doesn't give me the $850 in cash. the $20 per
1000 mile EQUIVALENT works the same way AS CASH. In fact, much of my
1,000,000 Hilton Honor points were converted from CO FFMs.

Consider my stay at the Conrad Hong Kong NOW. If I were to pay it by
cash, my 6 nights would cost me $3,600 USD. But I am paying the
EQUIVALENT of an amount less than half of the cash amount, by using
HHonor POINTS, each of which was 1/2 of a CO FFM.

Of course CO FFM's cash equivalent is not limited to flying or hotel
stays. The FFMs can be used to purchase goods and subscribe to
magazines, and plenty other NON-FLYING usage.

The bottom line is -- in ECONOMIC terms, the cash-equivalent DOES
translate to CASH terms, sometimes less than the nominal $20 per
1K mile figure, but often more than $20, especially if you choose
its usage judiciously.


Next, look at the transaction from CO's standpoint. When you come to
'spend' your 42,491 FFM, think how much CO will have to spend in $
terms to give you the flight.

This is ENTIRELY irrelevant. See the non-flying examples above.

As for spending the FFM for flying, it doesn't matter how much it costs
the airline, it's how much it would have cost YOU (in cash) that matters,
had you not paid it by FFMs.


$50 maybe? Then think how much CO
spent on your ATL/EWR/HKG trip - another $50 maybe?

Your naievite about economics and the profit margin of airlines showed.


So CO has $774 of
your money which it has spent maybe $100 giving you in return. I'd
say that CO was well up on the deal!!

Best regards
Ian

Sorry, you analysis was COMPLETELY off base, not only on economic grounds
in general, but on the dollar figures as well.

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.

-- Bob.

(me) wrote in message . com...
(Reef Fish) wrote in message om...
mrt wrote in message . com...
Reef Fish wrote:
In an earlier post, I had written:


Our AIRLINE portion to Hong Kong was FREE (I just figured it out,
amidst all this high-flying finance in the wee hours in Hong Kong :-)

Actually is more than free! CO paid us to fly. The details of this
will be posted under something like the "High Finance of Flying Free".

You paid money for the ticket to get miles, how does this make it free?

In the post in question, I explained fully why and how.

Yeah, what you explained was that you were paying roughly $800 for
a ticket and getting roughly $800 worth of FFM. However, I suspect
that for that $800 worth of FFM, you couldn't get the ticket you
bought. (It takes 60,000 miles or $1200)

The figure you gave is for a flight to Asia. No one says you have to
use the miles there. I fly to the Caribbean islands often, Cozumel
several times a year. A roundtrip from ATL via IAH is usually LESS
than a roundtrip IAH/CZM, and is usually between $650 and $800. The
FFM it takes is 35,000 miles or $700 which is about right.

That's why I use the $20 equivalent as the "nominal" value because
that's what CO or other airlines charge if you purchase 1000 FFM
from them to make up the difference between what's required and what
you have. Furthermore, you CANNOT purchase more than 10% of the
required miles.

THANK about the last sentence (fairly common airline RULE). If $20
is worth MORE than 1,000 FFM, wouldn't you think the airline would
let you buy as much as you wish?


You valued FFM at 2 cents per mile, which is a bit high. I usually
place them somewhere between 1 and 1.5 cents per mile. (The above
suggests actually about 1.3 cents per mile).

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

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.

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.


For a CO Platinum elite member it's a neat trick. The really neat trick is
figuring out how to "spend" the FFM's.

THere is no trick involved. All it takes is someone with at least an
ounce of brain in their head and a little bit of education to do a cost-
benefit analysis to know EXACTLY how much the FFMs are worth when they
are used wisely.


FF have literally hundreds
of thousands of miles they don't seem to be able to use. As such,
the $800 worth of FFM would seem to be worth a bit less than you imply.
But if you can find something to spend them upon, go for it.

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 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. :-)

-- Bob.

-- Bob.

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

(Reef Fish) wrote in message . com...
(me) wrote in message . com...
[snip]
Yeah, what you explained was that you were paying roughly $800 for
a ticket and getting roughly $800 worth of FFM. However, I suspect
that for that $800 worth of FFM, you couldn't get the ticket you
bought. (It takes 60,000 miles or $1200)

The figure you gave is for a flight to Asia.
Well, that's because that's the ticket you bought. You'll note
how I said "I suspect that for that $800 worth of FFM, you couldn't
get the ticket you bought.

No one says you have to
use the miles there. I fly to the Caribbean islands often, Cozumel
several times a year. A roundtrip from ATL via IAH is usually LESS
than a roundtrip IAH/CZM, and is usually between $650 and $800. The
FFM it takes is 35,000 miles or $700 which is about right.

In my experience, I can frequently get tickets less than this,
but it may be a time of year kinda thing. It is the strange but
true part of FFM, is that often you can buy the ticket for prices
that imply the "value" of FFMs is about a penny per mile.


That's why I use the $20 equivalent as the "nominal" value because
that's what CO or other airlines charge if you purchase 1000 FFM
from them to make up the difference between what's required and what
you have. Furthermore, you CANNOT purchase more than 10% of the
required miles.

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.


THANK about the last sentence (fairly common airline RULE). If $20
is worth MORE than 1,000 FFM, wouldn't you think the airline would
let you buy as much as you wish?

No, mostly because of what we are discussing. They have to be
careful not to basically allow folks to circumvent their pricing
structure by purchasing FFM. More than one FF site on the
web has pointed out the convoluted relationship between what airlines
charge for various products, and what the cost of FFM.


You valued FFM at 2 cents per mile, which is a bit high. I usually
place them somewhere between 1 and 1.5 cents per mile. (The above
suggests actually about 1.3 cents per mile).

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

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. 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.


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.


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. You are "up selling"
yourself. You are buying a product you would not otherwise buy
because the airline is inducing you to do so. For that one BF ticket,
you could get 2 coach tickets. Many accountants would tell you that
all you are really doing is spending 2 flights worth of miles to
get one flight across the Pacific. (There was a long thread about
this about a year or so ago.)



For a CO Platinum elite member it's a neat trick. The really neat trick is
figuring out how to "spend" the FFM's.

THere is no trick involved. All it takes is someone with at least an
ounce of brain in their head and a little bit of education to do a cost-
benefit analysis to know EXACTLY how much the FFMs are worth when they
are used wisely.

If you are spending $800 to get the FFM's and buying things you
wouldn't buy at any price, potentially, they are worthless.


FF have literally hundreds
of thousands of miles they don't seem to be able to use. As such,
the $800 worth of FFM would seem to be worth a bit less than you imply.
But if you can find something to spend them upon, go for it.

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. ;-)

Or you may not be able to travel when you can get tickets.
Taking a trip you don't want to take merely because it
will be a great value isn't any value at all.


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.