# what to bid?

Rohit Khare (khare@mci.net)
Wed, 09 Jul 1997 15:56:13 -0400

As you know, UA is auctioning 50 pair of b-class 5-stop rtws starting at
100,000 miles.

I have 407,000 miles. Assume it will be 420,000 by August 1 == \$8,400

One business class ticket is worth \$4200 = Paris, Delhi, Tokyo, Honolulu,
California like my last trip.

So even 400,000 miles for a pair is 'fair value', but more than I'd pay.
I'd like to win as many as 3 pairs; we can figure out what to do with them
later.

A 'regular' mileage plus business clas award around the world is 320,000
miles (== \$6400, way overprices). A pair of business-class tickets to India
is 180,000 miles.

They won't say what the top bids are. So strategy is key.

Range: 180, 130, 110 (= \$3600 first pair, \$2600 next, \$2200 third)

Averages: 3x140 (\$2800 ea) [this clearly is not an optimum strategy. Better
to spread the bids than cluster them. Aim for an *average* of 140 like the
above]

Low ball: 110, 106, 103, 101 (hey, at least if I do win by some miracle, it
will be a BARGAIN)

Replacement value? full economy to India is \$1600 alone, so I could bid
for just two pair: 180, 240

Full value: one bid of 250,000 = \$5000. I don't think it's worth bidding
'retail' value of 400,000 because no one's reimbursing these as a business
expense, ever. So that's the 'full value' as leisure.

The only hint from the clerk is that these auctions often hit twice the
minimum bid. I can't help but imagine there's a whole cluster of bids
100-150 from those who are aspiring to the award -- but the winners might
be 200+. The other MASSIVE complication is that the top FIFTY win, not just
the top 3-4. So the problem is estimating the tail of the distribution --
how low will it go?

Any and all ideas appreciated. Deadline is July 11 to bid; I don't want to
student status :-) (esp when it's almost always cheaper to pay cash for
transcon flights)

Rohit

---------------------------

Meet Star Alliance Airlines...
Bid Your Miles To Fly Them All!

Here is my bid for two tickets good for travel to any five destinations in
the Star Alliance network. I understand that the miles I bid may not be
redeemed for award travel or upgrades from the date of my bid until August
1, 1997.

Star Alliance Auction: Bid Your Miles To Fly To 5 Star Alliance Destinations

How far could you go with a pair of tickets good on any Star Alliance
airline? Here's your opportunity to find out!
If your bid of 100,000 or more Mileage Plus miles places you among our 50
highest auction bidders, you and a guest can fly to destinations around the
globe on one, or any combination of Star Alliance carriers, with up to 5
stopovers allowed along the way. Travel is in First Class on flights with
two classes of service, and in Business Class on flights with three classes
of service.
You can fly just one partner, or create a trip that takes you aboard all five.
Bidding for this exclusive auction starts at only 100,000 miles. But don't
delay -- bidding closes July 11, 1997.
If you would like to bid via telephone, call 1-800-930-3053 in the U.S.
between 7 A.M. and 10 P.M. Central Time, or call your local United
Reservations office outside of the U.S. If you are submitting your bid via
United Reservations outside of the U.S., please quote promotion code MPW
037. But don't delay -- bidding closes at 12:00 midnight, July 11, 1997.
Winners, to be notified by August 1, 1997, will be the 50 highest-bidding
Mileage Plus members with a minimum bid of 100,000 miles.

Terms And Conditions
Winners and their guest will each receive one ticket good for up to five
flights on any Star Alliance partner: United, Air Canada, Lufthansa, SAS
and THAI. Up to five stopovers are permitted. Flights must be booked and
ticketed by December 31, 1997, and all travel completed by December 31, 1998.

Departure fees and taxes may apply and will be collected from winners when
tickets are issued. All federal, state and local taxes are the winner's
responsibility. Please note: The miles you bid in this auction will be
committed during the auction period, and may not be redeemed for award
travel or upgrades from the date of your bid until August 1, 1997. Other
restrictions may apply.

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