What are airline miles worth?

Airline miles are worth 1.4 cents each.

What this means

With most frequent flyer programs, it is reasonable to expect to get at least 1.4 cents per mile value.  The actual value you get from your miles will vary depend upon how the miles are used.

Please also see: What are oddball airline miles worth?

Overview

With most frequent flyer programs, the value a person gets from airline miles depends entirely on how they’re used.  It’s often possible to get very high value (above 2 cents per mile) or very low value (less than 2 cents per mile).  By cherry picking the best opportunities, you should be able to get better value for your miles.

My goal is to identify a value with which it is reasonable to get that much value or better.  I call this value the Reasonable Redemption Value (RRV).

Methodology

In order to assign a Reasonable Redemption Value to airline miles, I had to make several assumptions:

• Most people in the US use their miles to book domestic economy flights.
• Most frequent flyer programs offer 25,000 mile round-trip economy awards within the continental United States.
• It is reasonable to assume that people who are flexible with their flight dates and times can find saver level awards (e.g. 25,000 mile round-trip).
• The average domestic round-trip flight price is $361 (Found here, based on 2016 data).

Given the above assumptions, we can calculate the Reasonable Redemption Value:

• RRV = (Average Flight Price – TSA Fee) / (25,000)

Results

• RRV = ($361 – $11) / 25,000 miles
• RRV = (36,100 cents – 1,100 cents) / 25,000 miles
• RRV = 1.4 cents per mile

Applicability

The statistic shown here applies only to the frequent flyer programs that offer 25,000 mile round trip domestic US awards.  These include:

• Alaska MileagePlan
• American AAdvantage
• Delta SkyMiles
• United MileagePlus

And:

• Air Canada Aeroplan (when used to fly United)
• Avianca LifeMiles (when used to fly United)
• Etihad Guest (when used to fy AA)
• Korean Airlines (when used to fly Delta)
• Lufthansa Miles & More (when used to fly United)
• Singapore KrisFlyer (when used to fly United)
• Virgin Atlantic Flying Club (when used to fly Delta)

The following frequent flyer programs are not included in this calculation because they do not offer standard 25,000 mile round trip awards:

• British Airways Avios
• Frontier Bonus Miles
• Hawaiian Miles
• JetBlue TrueBlue
• LATAM Pass
• Southwest Rapid Rewards
• Spirit
• Virgin America Elevate

For information about this group, please see: What are oddball airline miles worth?