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:

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Also feel free to leave your views in the comments section. I want to know your views

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• Hang on, do not use your Citi PremierMiles for Jet Airways redemptions

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Yesterday, I wrote about how disappointed I was with the Air India frequent flyer program. It did not stop there. I went about doing some digging into the whole affair.

Air India has outsourced the entire management of their frequent flyer program to a South African loyalty management company called LoyaltyPlus, to the extent that the program is hosted on external servers and not Air India’s own. Now, I assume here that a loyalty solutions company helps draw up a program and run the program and would be very involved with the on-going affairs at Flying Returns.

So, I decided to have a look at their roster of clients, and it turned out that I could not find one top-notch airline of any standing in their books. Mind you, I am not trying to be prejudiced here, but these names don’t inspire confidence because I’ve never heard of most of them before.

If I may hazard a guess, I could also gloss over the process of how this may have worked out. Indian state-owned companies usually set a minimum qualification bar and then go with the companies who can quote them the lowest price to run the show. I’m guessing not much weightage was given to the quality of the portfolio and experience.

Am I right, or am I just ranting around here? I’m totally disappointed how this would work if this company ever walked into Star Alliance.

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• Is Air India Flying Returns the most miser frequent flying program?

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Last year, I spent some time investigating the Air India frequent flyer program “Flying Returns”. At that point of time, I kind of started to appreciate the program a bit, because they finally had some structure to it, and they have much better availability over other Indian airlines. Earlier, the tier hurdles were not clear and no one had a clue as to who got their top tier and who did not. Seemed like in the process of getting ready for Star Alliance membership, they came up with a process because they needed to.

However, this post on FlyerTalk seems to have raised a few valid pointers about how the program still sucks, and in my own personal experience, that matches up.

The mileage earning opportunities on lower fare classes are 25% of the mileage flown, which means, for a 706 mile flight (BOM-DEL, for instance), you get a credit of only 177 miles. This means that even for a Silver status on the airline, which does not get much in terms of benefits (10% bonus miles, 1 upgrade, priority boarding which is non-existent, and some excess baggage), one needs to do about 85 flights on this sector, which, at an average cost of Rs. 5,200 (~$100) would be about Rs. 442,000 (~ $8000) of spend just to earn Silver status.

Jet Airways used to similarly award 20-25% of mileage of a low revenue fare class, but they fixed it about a year back and now almost all fares on 9W full-service flights get 100% miles flown, while JetKonnect gets 75% mileage on the same route. But at least they awarded tier-points to compensate and you could upgrade/requalify for a tier by earning tier points if you flew enough with them.

Also, the only partners Air India has at this point of time for earn and burn, inconsistently, are Singapore Airlines and Lufthansa, both of which need massive number of miles to be able to dream up a burn on them.

So my question to all of you is that is Air India’s frequent flyer program as bad it really looks, or are there sweet spots I don’t know of or appreciate yet, apart from the availability being there. Let me know via the comments.

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