5 ms·

I would venture a guess that the publicity generated by something like this far outweighs the REAL cost to the company. For people who collect air miles (and es

I would venture a guess that the publicity generated by something like this far outweighs the REAL cost to the company. For people who collect air miles (and especially on FT), the value of the miles is very important, but it never takes into account the wholesale price (which, from my research, is a closely guarded secret). I would assume, at some point, Avis must have to pay the airline where these points are redeemed (whether that's through a few different intermediaries or not), but you would assume that they are NOT paying the retail cost of the flights. This is why you can do things like trading loyalty points from flights for car rentals and vice versa. They are so heavily diluted by these programs, and people are (I assume) drawn in by the promise of points, it's all still a great deal for these companies, even if someone ocassionally figures out a way to beat the system. Much the way one lucky gambler doesn't exactly break the bank at a casino, but insteads give everyone else a bit of encouragement to try and beat the system themselves.

milesskorpen 11y ago
From what I've seen, airlines account for their point liability in a number of round trip tickets. I believe the average liability incurred across the industry is $64 per ticket. About 75% of points get redeemed (since people who get a lot would tend to use them), so the total cost of a ticket if everything was redeemed might be around $64/.75 = $85 USD. Seems like tickets range in cost, but 50k seems a fair estimate of the average flight (probably a bit high). So $0.0017 per mile incremental cost (higher opportunity cost). This INCLUDES all the people gaming the system right now, though. And Avis is paying the airline for the points, so the airline wins no matter what happens — it's a billion+ dollar profit center for them. Avis might be a bit more annoyed.
- vinceguidry 11y ago
  > And Avis is paying the airline for the points, so the airline wins no matter what happens — it's a billion+ dollar profit center for them. Well, they usually have corporate sales reps hammering out the particulars for big promos like this. Avis is certainly paying the airlines something, but as the size of the buy is enormous, they're going to get somewhere south of the wholesale price on the miles. Both parties therefore are eating the cost of the abusers.
nly 11y ago
If the breakdowns given by the airlines are to be believed, the bulk of the retail cost of a plane ticket these days are in taxes, fees and duties. I booked a ~£400 return flight from the UK to the States just a few weeks ago and the airline claim to be only getting 40% of that. I'm not sure where fuel fits in.
- slg 11y ago
  For what it is worth, flights between the UK and the US are some of the most heavily taxed flights in the world. Sometimes you are better off with a connecting flight from a European carrier that stops somewhere like France or Ireland.
  - nly 11y ago
    Last two times I've been I've not been able to find an advantage in doing so.
  - stephenc_c_ 11y ago
    I started a recent flight from LHR to SFO in DUB and saved about £1000 in business class. The flight actually went DUB-LHR-SFO so you end up going back to where you started, but it worked out significantly cheaper!
  - fendale 11y ago
    I live in Belfast so I can either use a UK airport (Belfast), or Dublin. In my previous job, we flew business class from the UK to San Fran fairly regularly. It was often £500 - £1000 cheaper to fly Dublin to SFO connecting through London than Belfast -> London -> SFO. Infact, even pricing the London to SFO on the same flight (leaving out the Belfast leg), it was £500 cheaper to start in Dublin. The price difference was all tax - and lots of it!
  - arprocter 11y ago
    The strangest thing I've come across was saving several hundred pounds by booking a return flight instead of one way, and just not using the flight back.
6t6t6 11y ago
Reading the post, I understand that, at first, the branch manager was quite unhappy about that. But then, obviously, they checked with the HQ and they received the order to be smooth with the guy because they understood that he was going to give publicity.

milesskorpen 11y ago

From what I've seen, airlines account for their point liability in a number of round trip tickets. I believe the average liability incurred across the industry is $64 per ticket. About 75% of points get redeemed (since people who get a lot would tend to use them), so the total cost of a ticket if everything was redeemed might be around $64/.75 = $85 USD. Seems like tickets range in cost, but 50k seems a fair estimate of the average flight (probably a bit high). So $0.0017 per mile incremental cost (higher opportunity cost). This INCLUDES all the people gaming the system right now, though. And Avis is paying the airline for the points, so the airline wins no matter what happens — it's a billion+ dollar profit center for them. Avis might be a bit more annoyed.

vinceguidry 11y ago
> And Avis is paying the airline for the points, so the airline wins no matter what happens — it's a billion+ dollar profit center for them. Well, they usually have corporate sales reps hammering out the particulars for big promos like this. Avis is certainly paying the airlines something, but as the size of the buy is enormous, they're going to get somewhere south of the wholesale price on the miles. Both parties therefore are eating the cost of the abusers.

nly 11y ago

If the breakdowns given by the airlines are to be believed, the bulk of the retail cost of a plane ticket these days are in taxes, fees and duties. I booked a ~£400 return flight from the UK to the States just a few weeks ago and the airline claim to be only getting 40% of that. I'm not sure where fuel fits in.

slg 11y ago
For what it is worth, flights between the UK and the US are some of the most heavily taxed flights in the world. Sometimes you are better off with a connecting flight from a European carrier that stops somewhere like France or Ireland.
- nly 11y ago
  Last two times I've been I've not been able to find an advantage in doing so.
- stephenc_c_ 11y ago
  I started a recent flight from LHR to SFO in DUB and saved about £1000 in business class. The flight actually went DUB-LHR-SFO so you end up going back to where you started, but it worked out significantly cheaper!
- fendale 11y ago
  I live in Belfast so I can either use a UK airport (Belfast), or Dublin. In my previous job, we flew business class from the UK to San Fran fairly regularly. It was often £500 - £1000 cheaper to fly Dublin to SFO connecting through London than Belfast -> London -> SFO. Infact, even pricing the London to SFO on the same flight (leaving out the Belfast leg), it was £500 cheaper to start in Dublin. The price difference was all tax - and lots of it!
- arprocter 11y ago
  The strangest thing I've come across was saving several hundred pounds by booking a return flight instead of one way, and just not using the flight back.

6t6t6 11y ago

Reading the post, I understand that, at first, the branch manager was quite unhappy about that. But then, obviously, they checked with the HQ and they received the order to be smooth with the guy because they understood that he was going to give publicity.