Yesterday, I got involved in a Twitter debate on what is the worth of a mile earned in India, and I thought I’d put my views across on the blog to share with all of you and hear what do you have to say. This will be a series which will focus on valuing the key mileage currencies in India.
For earning capabilities in India, there are 4 kind of miles one could earn and accumulate, using different ways. Here they are:
- Jet Privilege miles: Earn them by flying the airline or its partners, or credit card spends, or multiple program partners who are listed on the airline’s website.
- Air India miles: Earn them by flying Air India/Singapore Airlines/Lufthansa.
- Citibank PremierMiles: Earn them by spending on your Citibank PremierMiles credit card.
- American Express Membership Rewards: Earn them by spending on your American Express cards issued in India (non-cobranded).
If you want to see how to earn these miles with Credit Cards, here is a primer for you I wrote earlier in the year.
The primary dissent I had with the people I was sparring with was the utilization of these miles, which impacts the underlying valuation of the miles. I’ve noticed in the past that most people tend to use the mileage currency for booking domestic tickets. Nothing wrong with the approach, but I just feel you’re trading yourself cheap.
Here is an example or two of what I see as value v/s not:
- A Mumbai – Delhi economy class ticket, which would usually go for Rs. 5,000 if booked sufficiently out (3 weeks ahead), being booked on miles, where Jet Airways would at least charge you 8,400 Miles + Rs. 1,200 for the reservation. In this case you’re selling yourself cheap, because you’ve used 8,400 miles for a net value of 43 Paise per mile. On the other hand, if you made a last minute trip, when prices are sky high, it may be better to use the miles.
- Similarly booking the same ticket on any airline and redeeming your PremierMiles for it. So, if you paid Rs. 5,000 for the ticket, you’d be redeeming worth 10,000 miles if you chose to use your PM (1 Re. = 2 PM). Again, you’ve sold out cheap, because you’ve only got a net value of 50 paise per mile. That is the method Citibank wants you to apply, because it makes it really cheap for them to finish off your transaction.
- However, you could have gotten way more value out of your Citibank PremierMiles as well. For instance, imagine a USA (West Coast) – India return ticket in Business Class on Singapore Airlines, which usually goes for Rs. 350,000+ (USD 6,700+) coming to you for 155K PremierMiles and USD 800 fuel surcharges. In this case, all you had to do was to transfer your PremierMiles to Singapore Airlines’ frequent flyer program, and redeem for a ticket there. Your value earned per mile: Rs. 2 at the minimum. And this for a stable fare between the two countries on this airline.
So, before I go down to writing my analysis, would you quickly help me with your views on how do you use your miles? Pick in the poll below, which will be open for 48 hours:
How do you redeem your India-minted miles? (Pick 2 at most)
- Redeem for domestic tickets day of travel or a day or two ahead (43%, 15 Votes)
- Redeem for international tickets in premium cabins (37%, 13 Votes)
- Redeem for domestic tickets far out (29%, 10 Votes)
- Redeem for international tickets in economy (29%, 10 Votes)
- Redeem to transfer to other frequent flyer programs (17%, 6 Votes)
Total Voters: 35
Also feel free to leave your views in the comments section. I want to know your views