re: Avianca "Life Miles" - New FF program in *A
I had to graph it, to see it - SYD-LHR one way F Class. Start position = 105K miles (with US$0 copay - i.e. no copay).
The sweet spot for the
"incremental cost" of miles, is at
70,000 miles + US$588 copay, where the cost for 1,000 miles drops to just US$8.56.
(This is the 35K points mark on the graph. i.e. 35,000 miles off the original full price of "105K miles with no copay", which convert to US$588 copay.)
But, as long as the incremental cost, remains below the coughulative cost for all the miles purchased for the whole transaction, you are better off continuing to copay.
Thus, the sweet spot for the
"coughulative cost" of miles is at
49,000 miles + US$840 copay, when both the coughulative cost and incremental cost of 1,000 miles is US$15.
(This is the 56K points mark on the graph, i.e. 56,000 miles off the full miles price of 105K, which are converted to a US$840 copay.)
The minimum miles that can be used in this particular transaction is 42,000 miles + US$992.88 copay, at which point the "incremetal cost" of 1,000 miles has hit US$25.30 per 1,000 but the coughulative cost is only slightly up at US$15.76. (So even if you decide to max out the copay all the way, the coughulative penalty isn't really significant.)
