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Comment by Atheros | Hacker News Reader

New revenue model idea: Charge $40/month on a person's credit card; a subscription. This buys the customer miles. Whenever you want to go somewhere, you use your miles. I think it would work based on the fact that people are willing to pay much more money for services if it's spread out and predictable. The fact that it's pre-paid also creates a lock-in benefit for the airline that the 'pay later over time' schemes lack.

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I mean a lot of airline point credit cards do something like that. Many have a fee, and you earn miles by using the card & get mileage bonuses for certain things. But these programs only make sense to a consumer if A) you’re good at finding good value for your miles and B) you’re passively earning miles by doing things you’d normally do anyways. (With a bonus for airline loyalty perks, if you fly a lot.)

Thing is, buying miles is normally a really poor use of your money, because the redemption rate isn’t great, and airlines devalue miles all the time. For example, the lowest option at delta is to buy 2000 miles for $70. That’s 3.5 cents per mile, but you can only expect to get a value of 1.25 cents per mile when you redeem them. Which only comes out to $25 in value, loosing you $45 — and that’s assuming you wait to spend miles for a good deal. (Redemption rate is worse during more popular flights.)

Airline miles are just not worth much, which is why people chase like hundreds of thousands of miles at a time through credit card sign up bonuses.

They also have nothing to do with either Imperial miles or nautical miles. Like, a 2,500 mile flight costs something like 70,000 miles. I am irrationally angry about this and therefore refuse to participate in any related credit card scheme.

Miles refers to how they are generated, not spent. Absent multipliers or other bonuses a 2,500 mile flight generates 2,500 miles.

All rewards programs are phrased like this. You save up 10 nights at a hotel by staying there 10 times and you can spend it on a single stay.

> I am irrationally angry about this

Did you notice that the 2,500 mile flight earned/generated/conjured 2,500 miles?

(I know, I know, things can change the number you get...)

Alaska Airlines apparently does or did this kind of thing: My sister in law had a “subscription” that was good for monthly tickets between San Diego and wine country.

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