TPG launches new data-driven valuations for 6 major US airlines — and updates methodology for credit card currencies

08.09.2023 - 16:53 / thepointsguy.com

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.

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).

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

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:

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