When figuring out whether it's worth using miles to purchase a flight, the common rule of thumb has been that one mile equals two cents. So, using the standard 25,000-mile-for-a-free-flight equation, you'd be getting your miles' worth for tickets valued around $500. Of course, people will frequently dip under that number for flights closer to $400 because, well, $400 is still a lot to shell out for a ticket. But, at some point you'd want to draw the line. For example the rule of thumb says that using miles to purchase a $300 ticket only gets you 60% value and thus is a poor deal. Or is it?
A few months ago, a Wall Street Journal article discussed the frustration travelers feel regarding the current state of frequent flier programs and how difficult it is to obtain free flights through miles. Not exactly breaking news, I know. But, one interesting part of the article discussed how the huge amount of miles available through various programs has devalued each frequent flier mile. According to the article, Tim Winship, publisher of FrequentFlier.com, estimates that the good-value standard for a free flight is now 1.2 cents per mile.
So, if 1.2 is indeed the new 2, then a 25,000 mile ticket values at exactly $300 and, suddenly, your bad value is a pretty good one.
Although this information is useful for any traveler, it's especially important for traveling families. Why? Because we have more tickets to buy and more decisions to make about when or when not to pull the trigger on using miles to defray trip costs. Two $350 tickets from Chicago to Phoenix may not sound so bad, but when you're buying three or four tickets, you're now looking at $1400 just to get to your weekend getaway. Cashing in for a free ticket or two may make that price tag more palatable. Likewise, the new, lower miles value may encourage you to cash in miles to get your lap baby a seat (more enjoyable for everyone, not to mention safer) or even sway the take-the-kids don't-take-the-kids debate on certain trips.
I admit to having a bit of seller's remorse each time I cash in my hard-earned miles for a free flight. I always worry whether I got a good deal or whether they'd be more useful to me for some trip further down the road. But, knowing that the value of my miles is sinking faster than the U.S. dollar will make me a little less hesitant to pull the free-trip trigger in the future.