This month’s valuation pegs each JetBlue TrueBlue mile at just .7¢ each. Not Great. That’s about half what we’d see from legacy carriers United and American and about 25% less than Delta and their Skypeso program. It also represents a 12% decrease in value since I last ran the numbers back in March. Truth being told, I’d like to update these more often, but being a West Coaster JetBlue is just never all that high on my list of priorities.
Where does this Number Come from?
So that number, .7¢ sounds bad, and it is. But, it also raises the question, where does that number actually come from? The first thing to keep in mind, is the fact that I don’t simply take an exact flight’s cash price and divide it by the number of miles required to book as an award. That may be the simplest way to do it, but I also think it’s the least realistic. In my opinion, the value of a point or mile is determined by how easily it can replace cash. Let me further explain with some real-world examples.
Assume for a minute that you or I wanted to fly from San Diego to JFK. Let’s also assume we don’t really have any strong airline preferences. Though it is worth noting that for the purposes of determining the cash price I disregard ultra-low-cost carriers like Spirit or Allegiant. So, we want to go from SAN to JFK, and we head over to the Google Flights to come up with a cash price. We see a couple fares here, $119 on AA or Delta and $144 on JetBlue. Now, let’s see what JetBlue will offer this flight for if we were to attempt to book using our TrueBlue miles. Ok, so here we’ve got $5.60 in fees and 9600 points. Dividing our lowest cost cash alternative above, $119 and backing out those taxes and fees, give us a value per point of 1.18¢. That’s not too bad. That 1-1.5¢ per mile is where airline currencies commonly wind up.
Let’s try another, how about going from Denver to Dulles next month. United can do it for $165 on a 3 hour nonstop. Meanwhile, JetBlue is going to charge us $5.60 in taxes and fees plus 24,500 miles. Providing a value per mile of just .65¢ each.
So that’s the first part of my calculation. For most carriers in a given region, I maintain a standardized basket of hypothetical city-pairs. However, for and odd-ducks like JetBlue, I use one tailored just for them, since I don’t think it would be fair to average in a zero when they don’t even fly to a given destination.
After all the hypothetical pairs are averaged, I then discount the result by 25%. Now, cards on the table, this 25% number is a bit arbitrary and completely subjective. That said, I believe the reason for it’s existence is sound. I choose to reduce the average redemption value because 1) points are simply more hassle to use than cash 2) one typically doesn’t earn points when flying on an award ticket and 3) to help compensate for the risk of future devaluation. I honestly wish there was a more scientific way to quantify these variables, but I just can’t think of one. But, I’m always looking to improve the formulas, and if anyone has any suggestions, I’m always open to them.
For anyone who feels the existence of a reduction factor is complete BS, I also always provide an un-discounted average as well. For JetBlue TrueBlue miles that number is .95¢. Also worth noting is that this number ignores zeros from the average.
The Best and the Worst
Every time I provide a value update I always like to provide the best and the worst hypothetical redemptions for the month. Sadly, in the case of JetBlue, the best we could do isn’t great. Only 1.56¢ per mile. That was on an economy flight from Phoenix to Bermuda that was available for just 13,800 miles plus $5.60 in taxes and fees. Alternatively, the lowest priced cash alternative was 198 bucks. On the other end of the spectrum, our worst for the month was a redonculous .24¢. That was a Denver to Dulles run. The low-cost cash alternative was just $59, but JetBlue wanted $5.60 plus 22,400 miles for it. Definitely a redemption you’d want to avoid.
A lot of times, the best redemptions are the most fun part of running the numbers. It’s otherwise kind of tedious. They show what is possible if one is patient. Most of the time, the highest redemption values present themselves when looking at international premium cabin itineraries. For example, last time I ran American’s numbers, I found a first-class seat between Dallas and London that was offered for just $5.60 plus 85,000 miles. The lowest priced cash alternative was a $7,026. Making miles redeemed for that flight worth 8.3¢ each! Redemptions like that can make the nether-regions tingle.
Travel Outside the United States on JetBlue TrueBlue Miles
Getting back to JetBlue, and the extremely limited extra-hemispheric award travel options really limit one’s availability to cash in. In fact, at the moment, the only airline outside of itself that JetBlue is able to book award travel on is Hawaiian. And annoyingly, one can’t do that online. You’ve got to call 1-800-Jetblue or something like that. They do however, provide a mileage guide. I will concede that while looking at the chart, one can envision some real upside. 120,000 miles between the US East Coast and international destinations in business could be useful. Hawaiian fly’s to a few spots in Oceania and Asia. Just for A&G’s, let’s take a look at a trip from New York to Tokyo in business-class. Theoretically, one could make this trip via Hawaiian on one of their lie-flat equipped A330’s. Air Canada is offering it for $2,814. I’m not sure what fees JetBlue would pass on, but let’s ignore that for a second. We can then see that this hypothetical redemption would be worth 2.3¢ per mile. Definitely a step in the right direction, but still nothing to get too excited about.
So, JetBlue’s TrueBlue program leaves me wanting more. Mainly in the form of better award access to their airline partners. For someone living on the East Coast, you’re left in a bit of an awkward position. Fly the best US airline from a service or comfort standpoint, but earn lower-valued awards. Or, suck it up on United, with the end goal being a 5¢ or greater redemption. I don’t know the answer really.
To recap, we’ve got the following. An average consumer redemption value of just .7¢. An un-discounted average of just .95¢ and a best-in-class redemption of just 1.56¢. But at least you’ll be getting free WiFi along the way, so there’s always that.