What are air miles actually worth?
It depends entirely on how you redeem them, and the variation is enormous — the same points can be worth a fraction of a penny or several pence each.
How to think about value. The useful measure is pence per point: the cash value of what you got, divided by the points spent. Frequent flyer communities publish baseline valuations, typically in the range of 0.5p to 1.5p per point for major programmes, but any individual redemption can be far above or below.
Where value is high:
Long-haul premium cabins. This is where the disparity is largest. A business class seat costing thousands in cash may be available for a points total that, in cash-equivalent terms, values each point at several pence. Airlines price premium cabins at a substantial margin, and award charts frequently do not track that margin.
Partner airline redemptions, where an award chart has not kept pace with the cash price on that route.
Sweet spots in distance-based charts, where a particular route falls just inside a band.
Where value is poor:
Cash-equivalent redemptions — spending points on merchandise, gift vouchers or paying part of a cash fare. These typically fix the value at the low end, often below 1p, and represent the worst use of points.
Short-haul economy, where cash fares are already cheap.
Peak dates, where dynamic pricing raises point costs to track demand.
Three things that erode value:
Dynamic award pricing. Many programmes have moved from fixed award charts to prices tracking cash fares — which removes the arbitrage that made high-value redemptions possible, and is the most significant change to the economics in recent years.
Devaluation. Programmes raise award prices, frequently with little or no notice. This is a real risk of hoarding.
Surcharges and taxes, which on some programmes are substantial and payable in cash regardless.
Expiry, though most programmes reset the clock on any activity.
The practical implication: points are a depreciating currency. Earn with a plan and redeem rather than accumulate.