I did some back of the envelope math on the logic behind frequent flyer programs and was a bit bumbed. So, assume for a second that one is not doing mileage run and hence paying 10 cents a mile to get to 1K status (on AA). That means in the first year, you are spending $10,000 for which you get say 100,000 RDM miles and 100K status miles. Assume the RDMs are worth $1,700, so now you are spending $8.7K for the Executive platinum elite status next year which you are able to use to get 4 upgrades on international flights. Just that alone is worth at least $8.3K leave aside if you can get more complimentary upgrades and other airport benefits.
By this logic Executive elites fly free or put it another way, not frequent flyers are subsidizing frequent flyers!
Am I missing anything here? Does anyone care to chime in with different numbers and how lucrative it is to be a frequent flyer?
Why don’t airlines just follow the JetBlue model and sell business/first class seats based on CASM?