if you have a velocity plat card, another "issue" to take into account, is the free business class companion ticket, which in some cases halves the value of the points, as you can get twice as much value for the same price.
Yes, its a good point. There is a huge fake-out to the whole notion of value for points, and this example really shows us the reality of that. The more an airline overprices a ticket the more 'value' one can derive from using points to 'buy' that ticket. The closer to reality the ticket price becomes the less 'value' we derive.
Ultimately, to gain the absolute best ticket price, cash, classic and ASA type tickets all need to be compared and the best option chosen. Point value to the individual is not only a calculation of fare price versus points cost - the points themselves are easier or harder to obtain dependant to a large degree on peoples schemes and opportunities and should sway the decision to some degree.
For example, if you earn 50 million points a year 'for free' by way of standard payments then they have essentially no cost to you and fare tickets obtained by using them are also essentiually free. So even if a PER-MEL return J class flight cost $50 of real money you'd probably still be better off using points, no matter how many.
In fact, as I write this, it occurs that perhaps we really should focus a bit more in these types of conversation which we often have, about the _cost_ of points to us, and then be happy to trade them back to the airline for a cost + margin (cost and margin being quite individual, no doubt, for all of us).
If you'll indulge me, I have a QFF example in my head, I realise this is a VA thread, but its the calculation process that matters in the light of how the thread has evolved at this point:
Return fare PER-MEL, J, QF,
Cash $2800
Points 92,000 (variable, some fares are 500,000!)
Points cost, <2c ea as I don't "buy" points for more than this (I'll pass up on surcharges of 3% for example)
The cash versus points leads one to believe a derivation of 2,800 / 92,000 = 3c/point (down to 0.6c a point if you actually pay 500,000 points!!!)
The maximum points cost to me in this example is $0.02 x 92,000 = $1,840 if I actually paid the my maximum buy price of 2c each.
The reality of my buy price on points is, of course, much less, actually descending towards zero as I rarely pay a surcharge and points come to me by way of CC spend and bonuses of various types. It could be worked out if one tracks expense versus point accrual. Last time I did this, in May this year, I was running at about 0.58c per point cost but this only tracked the points I was "buying" via entry to new CC deals (99$ = new CC + 50,000 points type deals)
To recalculate the example using 0.58c / point = $0.0058 x 92,000 = $533.6 for the return J fare PER-MEL and back if I chose the 92,000 point fare or $2,900 if I paid 500,000 points.
Ahhh, I love this game, it really appeals to the lurking OCD in me