Author Topic: "Airlines Make More Money Selling Miles Than Seats"  (Read 4924 times)

Offline Yammer

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Re: "Airlines Make More Money Selling Miles Than Seats"
« Reply #30 on: April 02, 2017, 06:28:15 PM »
You just made that up didn't you?
Huh?

Offline BP16

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Re: "Airlines Make More Money Selling Miles Than Seats"
« Reply #31 on: April 02, 2017, 06:30:55 PM »
Huh?
When you thought Verizon got the deal from sprint for 5B!

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Re: "Airlines Make More Money Selling Miles Than Seats"
« Reply #32 on: April 02, 2017, 06:43:20 PM »
When you thought Verizon got the deal from sprint for 5B!
You didn't understand.

When Sprint finally​ got the iPhone, it was a 20 Billion deal ( just Googled it ). When the details were publicized it was clear that they were paying full price per phone. $666

http://www.foxnews.com/tech/2011/10/03/sprint-scores-iphone-5-exclusive-thanks-to-20-billion-deal-with-apple.html
When you thought Verizon got the deal from sprint for 5B!

Offline EJB

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"Airlines Make More Money Selling Miles Than Seats"
« Reply #33 on: April 02, 2017, 07:14:21 PM »
1.5-2.0 are standard buying rates. Iirc a certain european airline charges above 2 for its miles to banks. Rates are similar to banks and hotel programs that offer transfers.

Offline PlatinumGuy

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Re: "Airlines Make More Money Selling Miles Than Seats"
« Reply #34 on: April 02, 2017, 07:20:29 PM »
If the credit card companies pay more than 1.5 cents per mile, then every single credit card company would have a 1.5 cents cashback card.

It would go against all rules of logic and business to say otherwise.

Massive breakage of unused points, apparently enough that most amex cards only give 1.0 towards travel
Purpose > Pleasure

Offline EJB

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Re: "Airlines Make More Money Selling Miles Than Seats"
« Reply #35 on: April 02, 2017, 07:24:40 PM »
Massive breakage of unused points, apparently enough that most amex cards only give 1.0 towards travel
Airlines (and hotel chains) have much more breakage due to expiration rules. Depending on expiration rules can be upward of 30%.

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Re: "Airlines Make More Money Selling Miles Than Seats"
« Reply #36 on: April 02, 2017, 07:25:38 PM »
Airlines (and hotel chains) have much more breakage due to expiration rules. Depending on expiration rules can be upward of 30%.
Could be, how does that affect my statement?
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Offline EJB

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Re: "Airlines Make More Money Selling Miles Than Seats"
« Reply #37 on: April 02, 2017, 07:30:45 PM »
Could be, how does that affect my statement?

There could be a cost disparity between different cards. A 1.0 cent card costs close to 1.0 cents, and an airline cars that they buy at 1.5 cents costs 1.5 cents. The discount due to breakage is more relevant to the airline's internal costs, which usually are half or less of what the bank pays.

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Re: "Airlines Make More Money Selling Miles Than Seats"
« Reply #38 on: April 02, 2017, 07:34:26 PM »
There could be a cost disparity between different cards. A 1.0 cent card costs close to 1.0 cents, and an airline cars that they buy at 1.5 cents costs 1.5 cents. The discount due to breakage is more relevant to the airline's internal costs, which usually are half or less of what the bank pays.

Oh, I was referring to UR/MR where only a fraction of points earned are converted to airlines
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Offline EJB

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Re: "Airlines Make More Money Selling Miles Than Seats"
« Reply #39 on: April 02, 2017, 07:35:06 PM »
Oh, I was referring to UR/MR where only a fraction of points earned are converted to airlines
That's not "breakage." That just could reduce the average cost of point.

Offline AsherO

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Re: "Airlines Make More Money Selling Miles Than Seats"
« Reply #40 on: April 02, 2017, 07:40:14 PM »
1.77 is 1.8 rounded. So AA is willing to mark the price down to what Citi pays when they have a sale.

That's crazy.

Buy 1billion units from me and I'll charge you a little bit more than my sale price, what other industry does that happen in?
PGF24BMGS

Offline Dan

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Re: "Airlines Make More Money Selling Miles Than Seats"
« Reply #41 on: April 02, 2017, 07:45:14 PM »
That's crazy.

Buy 1billion units from me and I'll charge you a little bit more than my sale price, what other industry does that happen in?
Ones where you can charge for exclusivity.
We offer it for DD advertisers as well :)
Save your time, I don't answer PM. Post it in the forum and a dedicated DDF'er will get back to you as soon as possible.

Offline EJB

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Re: "Airlines Make More Money Selling Miles Than Seats"
« Reply #42 on: April 02, 2017, 07:50:09 PM »
Ones where you can charge for exclusivity.
We offer it for DD advertisers as well :)
Though with many flexible currency partners, there ain't much exclusivity. Rates are pretty similar.

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Re: "Airlines Make More Money Selling Miles Than Seats"
« Reply #43 on: April 02, 2017, 07:52:09 PM »
Though with many flexible currency partners, there ain't much exclusivity. Rates are pretty similar.
You're saying BA and SQ command the same rates UA does?
Seems hard to believe.
Save your time, I don't answer PM. Post it in the forum and a dedicated DDF'er will get back to you as soon as possible.

Offline EJB

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Re: "Airlines Make More Money Selling Miles Than Seats"
« Reply #44 on: April 02, 2017, 07:53:22 PM »
You're saying BA and SQ command the same rates UA does?
Seems hard to believe.

No, I'm saying that Citi pays a similar amount for AA as spg pays for it. Each airline has its own rate of course