Value and cost of a QFF point

[timandjack]

Hi I am looking for points of reference on how to calculate:

Value of a QFF point - cents per point.

Cost of a QFF point to a business - cent per point.

Thanks for your input.

 

[NM]

There is no single way to value points.

There is the cost that places like banks pay to purchase them from QF and "sell" them to you for Frequent Debting.

There is the value of the points as used for various redemptions. Generally long-haul flights and upgrades seem to result in the highest value of cents/point.

Then there is the amount people are willing to spend extra (like credit card surcharges and annual fees) in order to earn more points.

Then there is the value of "cash" redemptions such as shopping vouchers. These are not currently available from QF FF but are available from many programs such as credit cards.

All of these result in very different answers.

 

[coco50]

The best use of (say) QFF points is to purchase an international economy class fare and use points to upgrade to business or first. Thus, one way to value a QFF point would be to price the cheapest upgradeable economy fare say from SYD to LAX and then the cheapest business fare for the same route, subtract economy fare from business and then use the points calculator to find out how many points are required to upgrade from economy to business, then divide points required by the difference between business and economy fare. Obviously, the result will be different for each sector and will also depend on seasonality of the fare.

I always used to reckon the value of a QFF point at 1 cent. This was the rationale I used to get over Code of Conduct problems with claiming QFF points on official travel. My usual earn per sector was the minimum 1000 points or $10 bucks a sector - well under the allowable $50 in gifts.

 

[NM]

The best use of (say) QFF points is to purchase an international economy class fare and use points to upgrade to business or first.

That can also be a very risky approach if you really want to travel in business or first class and don't have much status with QF.

Also note you cannot use QF FF points to upgrade from an economy class fare to first class, only to business class or premium economy when they start selling it.

 

[Alanslegal]

I value my points based on RTW redemptions....

140,000 ff points for an economy RTW = $3,289.00 based on a OW ONE4

so 1 ff point = 2.35cents


some would even say 280,000 points for a business RTW = $10,499 so now 1 ff point = 3.75cents

as i'm pretty simple and my partner is really frugal i'm happy to fly why rtw with my partner for 280k ff points.


of course plus fuel fines and possible 2500points for customer service assistance....

 

[Evan]

What most people miss is oportunity cost, you cant just use your points as easily as paying for a flight....
If i had to put a value myself i would say 0.8 to 1.0 cents per point.
E

 

[lovetravellingoz]

I value my points based on RTW redemptions....

140,000 ff points for an economy RTW = $3,289.00 based on a OW ONE4

so 1 ff point = 2.35cents


some would even say 280,000 points for a business RTW = $10,499 so now 1 ff point = 3.75cents

as i'm pretty simple and my partner is really frugal i'm happy to fly why rtw with my partner for 280k ff points.


of course plus fuel fines and possible 2500points for customer service assistance....

This is what I am now aiming at.....

However I have currently redeemed 5 tickets to Noumea at Easter for 180,000 points. Flights would have cost $2800 (I checked at the time of booking)so is 1.55cents per point.

2 years back at July school holidays had 5 tickets to bakok abd back via Singapore for 275000 points. as it was School holidays cheapest fares would have been say $5000 ish = 1.82 cents per point.


Now I know that some peopl value business class redemptions at say 4 cents per point....but I would personally never pay full price for a business class seat...so therefore I could not value it that highly even if I did redeem it (and I have made some business class redemptions asa treat in the past).

 

[Reggie]

The other thing I look at is how the points are earn't. After the demise (nee destruction by Air New Zealand) of Ansett, and the loss of many points , I never and repeat NEVER, transfer points from my credit card accounts.

For example I can redeem a $250 voucher at Harvey Norman for 35000 points. Now this mighten look like good value to some, but the old addage one in the hand is worth 2 in the bush.

 

[JohnK]

A Oneworld RTW award is 140,000 QFF points and the peak season airfare is valued at $3479.

So I value points at ~2.5c each.

Some people consider it better value to pay for WHY airfare and try to upgrade to business class but I think QF business class airfares are way overpriced so I value the upgrade to business class a lot less.

 

[drron]

Well as far as QFF goes I am now a frequent debtor.As we do buy DONE4s at least once a year my value is as alanslegal said approx. 3.75c per point.This helps me decide when to purchase by credit card.Any surcharge above 3% makes it borderline so payment by cash or direct debit.Below that I will use my credit card.

 

[Alanslegal]

Yesterday morning, I booked a very very last minute award SYD-SIN for this Sunday afternoon.... (thanks to ef which showed x1)

Although only in the whY cabin, it was 30,000 ff points plus fuel fines of $167.

A one way Syd-Sin on the same flight cost $1250 incl of fuel fines.

Hence 30,000 points for $1083 which equates to 3.61cents per point......


on a side note, i refuse to pay interest nor surcharges on my CC spends......

 

[coco50]

A Oneworld RTW award is 140,000 QFF points and the peak season airfare is valued at $3479.

So I value points at ~2.5c each.

With fuel fines and other charges it is more like $4500 so this increases your valuation of a point.

 

[Dave Noble]

With fuel fines and other charges it is more like $4500 so this increases your valuation of a point.

I don't see the logic there since QFF charges fuel fines on awards whilst booking through AA reduces fine levels on the purchased fare

Also, I cannot see that comparing the points to a paid ATW fare as a valid comparison due to the difference in availability and flexibility of the award over a paid fare

Dave

 

[Evan]

Also, I cannot see that comparing the points to a paid ATW fare as a valid comparison due to the difference in availability and flexibility of the award over a paid fare

Dave

Dave this was my point when saying the point was worth 0.8-1.0 cents, availability limits how useful it can be, sure people who can plan 1 year in advance for a trip its fine, but for me i can not often plan nearly as early as others due to my work / lifestyle (i prefer to just be more spontanous than planned)

I am using points this Christmas season for upgrades... 48,000 points a one way whY -> J SYD-NRT, the J fare was about $2k higher one way so you could say the points are worth almost 4 cents a point, some other flights i paid J since the cost was hardly any different than whY, you just have to pick and choose what you do with them that is useful for you.

E

 

[JohnK]

With fuel fines and other charges it is more like $4500 so this increases your valuation of a point.

The taxes and fuel surcharges of $1000+ are not included in the cost of the RTW or the Oneworld RTW award.

So for me I still value QFF points at 2.5c per point.

Also, I cannot see that comparing the points to a paid ATW fare as a valid comparison due to the difference in availability and flexibility of the award over a paid fare

Why not? If I manage to book a Oneworld RTW award with QFF points for travel in August then I have avoided paying $3479 for the RTW. It is a perfectly valid comparison and justifiable.

 

[Dave Noble]

The taxes and fuel surcharges of $1000+ are not included in the cost of the RTW or the Oneworld RTW award.

So for me I still value QFF points at 2.5c per point.


Why not? If I manage to book a Oneworld RTW award with QFF points for travel in August then I have avoided paying $3479 for the RTW. It is a perfectly valid comparison and justifiable.

Actually it isnt since the fuel surcharge level on an AA issued ATW ticket is a lot lower then the ripoff QF fuel fines so the value wouldn't even be $3479

Also, the LONE4 is a lot more flexible in changes and better availability than an award seat; comparing against that is as risibile imo as comparing the cost against a full unrestricted Y fare

Dave

 

[JohnK]

Actually it isnt since the fuel surcharge level on an AA issued ATW ticket is a lot lower then the ripoff QF fuel fines so the value wouldn't even be $3479

What has the value of taxes and fuel surcharges got to do with the equation? The RTW in peak season is valued at $3479 + taxes and fuel surcharges. So if I get a Oneworld RTW award with QFF points then they are worth 2.5c per point. I have no intention of purchasing a LONE4 so the saving on taxes and fuel surcharges is irrelevant to me.

Now lets not go into the discussion of earning FF points as I have proven time and time again that it is much much easier for me, and most people, to collect QFF points for a Oneworld RTW award then it is to collect AA points for a Oneworld RTW award.

Also I have just on 100,000 Amex MR points sitting in my account. What should I do with these points? Convert them to AA so I can have a business class award anywhere in Australia/New Zealand and avoid paying the taxes and fuel surcharges or wait until I have 140,000 Amex MR points and then convert them to QFF points and book a Oneworld RTW award and pay the $1000+ in taxes and fuel surcharges.

Also, the LONE4 is a lot more flexible in changes and better availability than an award seat; comparing against that is as risibile imo as comparing the cost against a full unrestricted Y fare

I still do not understand why? I have accumulated QFF points and want to use them. Why pay for a LONE4 when I can book a Oneworld RTW award with the itinerary I want?

As for flexibility I can easily cancel the Oneworld RTW award, before travel commences, and be charged a cancellation fee of 5,000 QFF points. Once travel commences I see no need to change the itinerary. Just enjoy the holiday and hope that AA does not lose my luggage....

 

[Dave Noble]

What has the value of taxes and fuel surcharges got to do with the equation? The RTW in peak season is valued at $3479 + taxes and fuel surcharges. So if I get a Oneworld RTW award with QFF points then they are worth 2.5c per point. I have no intention of purchasing a LONE4 so the saving on taxes and fuel surcharges is irrelevant to me.

If you wouldn't have been prepared to pay $3479 then the points cannot be worth $3479; they can only be worth an amount of what you would be prepared to spend. If the trip os only taking place because it is free then the miles are worth zero ( the amount which would otherwise have been spent )

It would be like saying "I saved $10,000 by using FF miles for a business class ticket to USA" if the person would never have been prepared to pay $10000 for a business class ticket

Dave

 

[JohnK]

If you wouldn't have been prepared to pay $3479 then the points cannot be worth $3479; they can only be worth an amount of what you would be prepared to spend. If the trip os only taking place because it is free then the miles are worth zero ( the amount which would otherwise have been spent )

The overseas trip will be taking place because I want it to take place. I want to go RTW again in 2009. I am not prepared to pay for a LONE4 because I have enough QFF points for Oneworld RTW award. The value I am saving is still $3479 as I see it. You do not have to agree.

The taxes and fuel surcharges are a side issue and have nothing to do with the equation of the value of QFF points. Even if I had purchased a LONE4 I would have booked with QF and not AA.

As far as I am concerned I get a value of 2.5c per QFF point.

 

[straitman]

I don't see the logic there since QFF charges fuel fines on awards whilst booking through AA reduces fine levels on the purchased fare

Also, I cannot see that comparing the points to a paid ATW fare as a valid comparison due to the difference in availability and flexibility of the award over a paid fare

Dave

Actually it isnt since the fuel surcharge level on an AA issued ATW ticket is a lot lower then the ripoff QF fuel fines so the value wouldn't even be $3479

Also, the LONE4 is a lot more flexible in changes and better availability than an award seat; comparing against that is as risibile imo as comparing the cost against a full unrestricted Y fare

Dave

If you wouldn't have been prepared to pay $3479 then the points cannot be worth $3479; they can only be worth an amount of what you would be prepared to spend. If the trip os only taking place because it is free then the miles are worth zero ( the amount which would otherwise have been spent )

It would be like saying "I saved $10,000 by using FF miles for a business class ticket to USA" if the person would never have been prepared to pay $10000 for a business class ticket

Dave

Dave Noble,

As usual I'm going to disagree with you :!:

There are more ways to look at the value of points or anything else than purely a mathematical equation. Just because you believe things must always have a defined value does not mean it applies that way to everyone. Things, including points can often have an emotional value which then changes the monetary value to the individual concerned.

Alternately, just because someone isn’t willing, or sometimes able to spend the $3479 in your example doesn’t devalue them any. The ticket if purchased would still cost that amount. Perhaps an easier to understand equivalent would be to us business or first class tickets as a comparison as the costs have less flexibility (and the value higher).

As JohnK mentioned the taxes and fuel charges have no relevance as they are an add on in both situations, whether it is an AA to AA or QF to QF comparison.

The discussion of AA value versus QF value is once again an individual issue dependant upon personal travelling patterns. This has been discussed at length elsewhere so I’m not going to go into it again here.

I also believe that the availability, or lack there of has a lot lower relevance than a lot of people state. I find I can book a ATW ticket in business at 2 – 3 months notice by using a little flexibility and I find I need that same flexibility for a paid business class fare.

For interest my last (corporate discounted) ATW worked out at 3.51 cents per point when compared to my wife's ATW reward ticket.