Management and Operations Commons^™

A Conceptual Framework For Valuating Airline Frequent Flyer Program Miles, Yi Gao

International Journal of Aviation, Aeronautics, and Aerospace

Frequent flyer programs of airlines have gradually evolved into a multi-billion dollar business over the years. Valuing frequent flyer program miles accurately and fairly has its practical implications both for airlines and members of frequent flyer programs. As a ground-breaking academic study dedicated to airline loyalty programs, this study aims to build a conceptual framework to guide the valuation of miles. Through comparing required miles for different award types with their equivalent cash prices, this study has successfully addressed the purchasing power of AAdvantage miles of American Airlines when they are used for award redemption. Not only can this study …