A lot of bloggers out there are focused on earning miles to spend on first-class tickets. I agree this makes sense from a dollar value standpoint; the ratio of fare-to-miles is a ridiculous amount higher for first class than for coach. Here's an example:
Boston (BOS) to LA (LAX) roundtrip
Date: 5/1-5/10
Airline: American
Coach
Lowest Fare Cost: $312
Lowest Miles Cost: 25,000
Value Per Mile = 1.25CPM (that's cents per mile)
First
Lowest Fare Cost: $1077
Lowest Miles Cost: 50,000
Value Per Mile = 2.15CPM
Winner: First Class by almost 100%
Obviously using your miles to fly first class makes sense from a monetary standpoint simply because first class costs WAY WAY WAY more in dollars but only WAY more in miles.
Dollar value isn't the whole story: understanding "opportunity cost"
But let's say you don't have enough miles to fly first class. Would you pay for the ticket with real money? The answer, for me at least as an entry-level analyst, is hell no.
Most blogs I read on how to earn and burn points assume that the value of a first class ticket is what it sells for. If it costs $1,000 then it's worth $1,000. But that's a bad assumption. Yes, a first class ticket between Boston and Los Angeles sells for $1,000. But for me, and I'm guessing for a lot of you that are earning miles to go places you couldn't otherwise afford, a first class ticket between Boston and Los Angeles is not worth $1,000. Assuming I'd buy the coach ticket for $300, I'd value first class at maybe, just maybe, $400. In all likelihood I probably wouldn't pay any more money for first class because I just can't afford it.
So let's say for a moment that first class is indeed worth $100 more to you than coach class on this trip. Let's do the math again:
Boston (BOS) to LA (LAX) roundtrip
Date: 5/1-5/10
Airline: American
Coach
Lowest Fare Cost: $312
Lowest Miles Cost: 25,000
Value Per Mile = 1.25CPM
First
Value to you: $412
Lowest Miles Cost: 50,000
Value Per Mile = 0.82CPM
Winner: Coach Class by 50%
So unless you have unlimited amounts of money and it doesn't matter to you what you pay for anything, using miles to pay for first class travel isn't so enticing after all.
I can do without the crappy in-flight meal
Don't get me wrong. I have nothing against first class. It's awesome. You get a bigger and fancier chair and much more attentive service from the flight attendants. You get all the drinks you want and you get food served to you. It's also far less likely you'll hear the baby screaming back in cattle class. I am very pro-first class. Just not when I'm paying for it.
So when I am paying for it, with miles or with money, I'll take coach. The question for me isn't "do I want a bigger seat?" The answer is an obvious yes. C'mon, I'm not a masochist...or a Cubs fan. The question for me is "do I want a bigger seat or do I want to see my girlfriend another time?" The answer is possibly more obvious to that one (and if not you should consider not being in your current relationship).
There are plenty of blogs devoted to showing you the latest and greatest from first- and business-class from the world's premier airlines. If you're looking for that, I would take no offense if this is the last post of mine you read. But if you're like me and you just want to go as many places as possible for the least cost, this blog is for you. It will be focused on helping you maximize the number, not the elegance, of trips you take. Don't worry I'm not going to post about flying in the cargo hold of a central African carrier recently blacklisted by the European Union for safety violations...even if there is an amazing miles deal. But you likely won't be sitting in rows 1-5 on an Airbus 380 if you stick with me.
Max
P.S. If you're just getting started in the miles game and are looking for some advice on how best to use them for an upcoming trip, feel free to drop me an email at info@wennecorp.com.
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