American AAdvantage is stacking a purchased miles bonus with a discount through November 13 that lets you buy miles for ~ 2.1 cents a mile.
I assume the two are combined, rather than making a more straight-forward offer, in order to make this sound more exciting and a also a little more opaque in terms of doing the math.
Here’s the table showing the discount and bonus that applies at each tier of mileage purchase.
First you’ll see pricing without taxes. It appears as though you’re getting 135,000 miles for $2655. That would be 1.97 cents apiece.
However that pricing is before taxes and the ‘processing charge’ they assess for allowing you to buy their product.
All-in, the price is ~ 2.14 cents apiece.
That’s a good price for buying American miles, as far as their offers go — American used to charge much more, US Airways charged less. The program seems to have adopted the US Airways model of almost always offering miles on sale, but doesn’t sell them quite as cheaply as they used to. (And American processes these transactions themselves, so it does count as bonusable spend for credit cards that give extra miles for airline purchases, since they’re no longer selling miles in bulk to Points.com with Points.com reselling them.)
In May the offer was ~ 2.1 cents, done as a straight discount. The nice thing about a bonus, though, rather than just a discount is that it allows you to exceed the annual 125,000 mile cap on purchased miles (since the bonus is separate from and above the cap). In July they mixed bonuses and discounts to come to a similar price.
This is not a price at which I’m a buyer of miles. On average I value American miles at 1.7 cents.
They’re worth more if they put you over the top for a specific award. And they’re worth more if you redeem them for something you’d be willing to pay full or close to full price for otherwise.
American miles are worth less to me because I have a large 7 figure balance of AAdvantage miles already. More miles are worth less at the margin because I won’t likely use any that I add to my account any time in the near future.
Real value is possible though:
- American allows you to put awards on hold for 5 days. So you can secure award space before buying miles.
- Business class between the US and Southeast Asia is just 110,000 miles roundtrip. Business class between the US and Europe is just 100,000 miles roundtrip (with fuel surcharges if you fly British Airways, so focus on Iberia availability). It can make sense to buy miles for an award that’s currently available (although substantial advance purchase business class to Europe during off peak times can be less than $2000 paid).
Cathay Pacific first class is 67,500 miles one-way between the US and South Asia
Etihad First Apartment is 90,000 miles one-way US to Middle East (or beyond to the Indian Subcontinent)
This isn’t something everyone should jump on. But some people will find it a worthwhile bonus.
(HT: Frequent Flyer Bonuses)