Beautifying Renewable Fuel Markets with Creative Hedges

June 14, 2013 |

SuperRINs and frequent flyer miles

AAdvantage-MilesYou don’t have to look hard for an example, in the real-world, where this kind of financing is available, popular with buyers, and creating capital for sellers.

That’s the world of frequent flyer miles — the shadow currency used almost universally in the airline business to reward consumer loyalty.

As almost everyone knows, enrolled flyers in a loyalty program earn miles with every flight. As a promotional tactic, airlines even offer double or triple miles, or other forms of bonuses, on selected flights. Miles can be redeemed for free tickets.

How does this relate back to the Renewable Fuel Standard. Well, any experienced flyer knows that you can buy frequent flier miles directly from many airlines. For example, you don’t have to wait to fly 100,000 miles on American Airlines to get 100,000 miles in your mileage account – you can just go ahead and buy the miles.

Now, why would anyone do that? That’s easy. Frequent flyers with complex, often last minute, travel obligations, know that sometimes cashing frequent flyer miles is much less painful than buying a last-minute plane ticket at ruinous prices. $1200 one-way tickets can often be avoided by cashing in 25,000 or 50,000 miles, and flyers are known to “top off” their accounts to make sure they can cover unforeseen travel emergencies — or simply, to have enough miles for a coveted business or first-class ticket on a special holiday trip.

3 of 5
Use your ← → (arrow) keys to browse

Print Friendly, PDF & Email

Tags: , , , ,

Category: Top Stories

Thank you for visting the Digest.