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 (28%, 15 Votes)
- Redeem for international tickets in premium cabins (24%, 13 Votes)
- Redeem for domestic tickets far out (19%, 10 Votes)
- Redeem for international tickets in economy (19%, 10 Votes)
- Redeem to transfer to other frequent flyer programs (11%, 6 Votes)
Total Voters: 35
Loading ...Also feel free to leave your views in the comments section. I want to know your views 🙂
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Hey Aj,
Did you end up writing the series focusing on valuing the key mileage currencies in India?
Thanks!
Aashrey
@Aash it is still on the agenda but I am ahead on ideas behind on time at the moment
I feel it depends on the usage AJ. For someone like me who uses miles almost 90% for domestic (and more for family) last minute redemptions give a decent cash value. Another thing to look at is actually how much you’ve spent to get those miles (from the co-branded cards). By my rough estimates currently Amex gives me a benefit of around 3.3 – 4.7% for my most used sectors (e.g Jet – Blr-Bom @6800 miles for an avg price of Rs 5000 – 6500 normal ticket which effectively I get when i’ve spent (retail) 1.13 L on Jet Amex) while the same thing goes down to at best a 2.6% on CitiPM if I use on Citi site or 3.5% if I transfer to AI FFP and redeem. However I refrain from redeeming when the prices are significantly below the band I mentioned. In which case I simply pay and buy.
Your comments most welcome on this approach.
Hi AJ,
I use my miles for last minute redemption on Jet Airways/ other airlines thru Premier miles. Your idea regarding Premier miles may work if you have (a) a frequent flyer account with Singapore airlines and (b) have accumulated 350k miles. However, you are carrying the risk of devaluation of your miles if you hold them for a year or more [because of policy changes of Citi/ airlines] while you reach the figure of 350k. I prefer not to go beyond say the 100k mark.
Also, while I have not thoroughly evaluated the ratio for redemption for foreign travel on Jet, whenever I checked, I found that redemption for domestic seemed better. Also, it seems that Jet does not always allow online redemption for foreign travel because I have frequently seen ‘no seat available’ message for the entire month.
ideally i use my miles for last minute redemption on jet, so value comes to re1.
but now as i have also posted on flyerstalk, i want to use the miles for US biz class redemption. i have over 200k miles on PM card. and not sure which scheme to transfer them to. i have another 100k miles coming in this month, and will b using them combined for my redemption. would be great if u could suggest the airline for flying to US from DEL, and how much time it takes to transfer.
What is the best way of redeeming Air India miles? Is it for domestic or international tickets?
My AI miles are going to expire at the end of the year. Is there a way to extend their expiration?
How much additional service fee/fuel charges etc does Air India charge on award tickets?
@Cyclotron, you can get your miles expiry extended for 1 year after the expiry date by going to an Air India office and paying 10p per mile for the number of miles you want extended. As for fuel surcharges on domestic, they are in line with 9W but International I am not so sure!
How about using these miles for hotel stays? Is that a good deal?
I have Jet Amex and PM card and i use it for tickets for travel in India.
I use JP miles to book last minute domestic flights for which the fares have gone up considerably as an example Delhi – Mumbai would cost around 10K a day before but you could get it for 8400 miles which gives you around 1 miles = Re. 1 ratio.