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TPG launches new data-driven airline valuations


The day has finally arrived.

After months of development and extensive validation testing, today, TPG is thrilled to launch our new data-driven methodology for valuing some of the most important loyalty programs out there. This approach builds on previous efforts to leverage extensive, real-world inputs to help readers decide when they should use their hard-earned points and miles versus when they should simply pay cash.

With this significantly expanded data set, we’re also refining our methodology for the major transferable point programs to better capture the value that savvy travelers can get from their credit card rewards.

Here’s everything you need to know about this new approach.

New method for airline valuations

The first exciting aspect of this announcement is our new methodology for valuing rewards from many popular airlines.

Our editorial team is constantly searching for award tickets, and we also use rewards on a regular basis. The numbers we’ve published over the years reflected those personal experiences.

Now, we have extensive data to support these numbers for loyalty programs from six major U.S. airlines:

To crunch the numbers, we looked at more than 23,000 individual data points on round-trip itineraries across the U.S. and around the world, emphasizing domestic routes along with flights between the largest U.S. airports and leisure destinations in Hawaii, Mexico, the Caribbean and South/Central America. We also included some of the top European gateways and then layered in a curated set of popular destinations for travelers, including spots like Sydney Airport (SYD) and Tokyo’s Narita International Airport (NRT) and Haneda Airport (HND).

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Here’s how we weighted these data points to minimize one redemption type from skewing the calculation:

  • Domestic economy: 20%
  • Domestic business/first class: 10%
  • Hawaii: 10%
  • Short- to medium-haul international economy: 25%
  • Transatlantic economy: 15%
  • Long-haul business class: 20%

This weighting was adjusted proportionally when carriers had no flights in a specific bucket, and we used a three-month rolling average of data to minimize outlier pricing during periods of high demand (like the holidays). Finally, we rounded numbers to the nearest five-hundredths of a cent for ease of calculation.

As expected, we did find a wide range of values for individual redemptions with four of the six airlines (JetBlue and Southwest were much narrower, which makes sense given the revenue-based nature of these programs). However, the ultimate numbers are based on the above weights to give a well-rounded view of the expected value you can get across an airline’s network.

Here is where the final numbers landed for the September valuations:

Airline program September 2023 valuation
Alaska Airlines Mileage Plan 1.4 cents per mile
American Airlines AAdvantage 1.5 cents per mile
Delta SkyMiles 1.2 cents per mile
JetBlue TrueBlue 1.4 cents per point
Southwest Rapid Rewards 1.4 cents per point
United MileagePlus 1.45 cents per mile

It’s worth noting that the data is almost entirely based on flights operated by the specified airline. While we do include a handful of partner redemptions, the capacity controls on these tickets — especially in premium cabins — mean that they’re hard to count on as a reliable aspect of a given program.

Sure, there are ways to get outsized value from your points and miles if you’re flexible or utilize transferable points (more on that below). However, when you’re sitting on a balance of rewards in a specific airline’s program, this methodology (and the numbers above) can help identify when you should use your rewards.

Refined credit card methodology

In addition to the updated valuation of these six currencies, we have also refined our methodology for the five major transferable credit card programs.

The most powerful aspect of transferable currencies is their flexibility. Rather than being limited to a single airline or hotel program, you can hold on to your rewards until you’re ready to use them — whether that’s to take advantage of a transfer bonus or jump on a once-in-a-lifetime redemption like Singapore Suites.

We’ve now updated our model to use the above airline-specific data while also accounting for the following features of each program:

  • The base value for cash-equivalent rewards (e.g., statement credits, cash back, Amazon.com redemptions)
  • The base value for travel redemptions
  • The quantity (and quality) of transfer partners

Our proprietary formula uses this information to compute the extra value a savvy traveler can unlock by leveraging key transfer partners and booking award sweet spots through each program.

With this tweaked methodology, here’s how the card currencies now stack up:

As you can see, Bilt Rewards points and Chase Ultimate Rewards points now top our valuations for card currencies, as both carry significant ways to optimize transfer partners alongside the most valuable direct travel redemptions through Bilt Travel and Chase Travel (respectively). Amex Membership Rewards points come next, with Capital One miles and Citi ThankYou points following closely behind.

Of course, all of these programs still have opportunities for improvement that could boost their valuations even further:

  • Amex: Increasing base value for statement credits or Amazon.com redemption, both of which currently stand at 0.7 cents
  • Bilt: Increasing base value for Amazon.com purchases (0.7 cents) and direct rent redemptions (0.55 cents), or adding additional transfer partners
  • Capital One: Adding new, valuable transfer partners — including a U.S. airline program — or boosting cash-equivalent redemptions (0.8 cents for Amazon, 0.5 cents for cash back)
  • Chase: Adding additional transfer partners
  • Citi: Increasing base value for Amazon.com redemptions (0.8 cents) or adding additional transfer partners

We’ll continue to monitor updates to these programs and will recalculate our valuations when necessary.

Future projects

We’re not done enhancing our valuations to better equip you — our readers — with what you need to decide on the best credit cards to get and when to put those rewards to use. We’re continuing to explore additional projects to give even more actionable information, including (but not limited to):

  • A revamped valuation methodology for hotel points
  • New data-driven valuations for additional airline programs
  • More educational content on how (and when) to redeem your points and miles

All of these will serve our ultimate goal of empowering you to optimize your rewards, whether it’s to explore more of the world or put more money back in your pocket.


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