Calculating the value of points in a loyalty program is not often an easy task. Opportunity cost, actual willingness to spend cash versus points and the variable pricing nature of may air travel programs creates a scenario where making informed decisions is not always easy. Even for the revenue-based programs the math can be a bit challenging. JetBlue’s TrueBlue program is revenue-based but does not assign a strict value to points. The valuation varies based on other factors. Every now and then (apparently way too long since last time I did this) I try to survey the redemption landscape and come up with a representation of what the valuation options are. Today’s the day for the latest iteration of that effort, and the numbers are a bit surprising. Up first is spectacular news for TrueBlue members with small balances: The new floor for award redemptions is now 3,500 points rather than 5,000. Awards at the new, lower floor rate are also some of the most valuable in the system (more on that below) which makes the news doubly good.
The news gets better from there. In addition to redemptions being available at lower rates than before there’s also the part where the average point valuation is higher than it was three years ago. In January 2011 the range was 0.8-1.35 cents per point (CPP). In May 2011 the numbers went up nicely, ranging from 1.046-1.53 CPP. The range today is rather wider, from 0.97-1.89 CPP, but the average of 1.41 CPP is a nice increase over the prior round of numbers I’d gathered. JetBlue catches some flak in the world of frequent flyer die-hards by not having much in the way of premium cabin redemption opportunities available. With the introduction of their Mint product earlier this year, however, the ability to score a premium seat on a JetBlue flight became available. And, yes, it is just a transcon and not over the ocean, but would you believe that the Mint flights are one of the best redemption values in JetBlue’s system? The value is less great if you need to add on a connection or if they’ve sold enough seats in the cabin that the comparable fare has inched up. But the current low-water mark for Mint fares is $599. That same seat can be redeemed consistently for 34,900 points plus $5.60 in TSA fees. This equates to a valuation of 1.7 cents per point. And it is terribly consistent across multiple dates and flights. There were only a handful of other reward options above that in the data reviewed. The higher fare Mint seats are not as great a value, but the $599 seats are a sweet spot in the award chart. And with a bit of advance planning they are often available. Redeeming for a premium flight on JetBlue is consistently one of the better options available to TrueBlue members.
Also somewhat interesting is that international awards had a relatively higher valuation than domestic ones. Yes, the taxes are higher on those awards but I include that in the calculations so as to not skew the point values. The average value per point on an international redemption in the data I queried was 1.569 cents. For domestic trips (excluding Mint) the value was about 14% lower at 1.38 cents per point. I also noticed a general trend that the points became less valuable as the airfare increased. It was not completely linear but the trends were there.
In comparing the domestic versus international valuations I also considered the average fare involved to make sure that wasn’t skewing the data. Based on reviewing the information in a few different ways it does not appear that the overall average fare affects the results. The valuation variability between domestic and international routes can also be seen directly when comparing flights with the same fare cost in different markets. That scenario came up a few times in the data set. And in every case the international trip was a better value than the domestic one as an award, sometimes significantly so. Also worth noting is that JetBlue continues to maintain variable pricing, even in the same market on the same date. There were a few examples of trips where the redemption price varied even with an identical revenue price point.
From a personal perspective this is all very good news. I’ve always focused the thought of my TrueBlue redemption efforts on international trips. This data reinforces the idea that I’m making a smart choice with that plan. It is also a reminder that it is good to splurge every now and then; the Mint redemptions are one of the best values in the program, even if they do cost a bit more. Finally, somewhat counter to my typical approach, the data suggests that for regular travel patterns it is generally better to redeem for the less expensive trips and pay cash for the pricier ones. Of course, I’d rather it were the other way around as the psychology of airfares makes me want to pay cash for the cheap flights and use points for the more expensive ones. But I also now know that’s not likely to be the smart move, at least with the TrueBlue program.
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