A Facebook friend writes,
Since [redeemable miles] are going to be harder to earn in the future with my flying patterns [buying cheap tickets and American is going to start awarding miles based on ticket price rather than distance flown in about a year -ed], does it make sense to load up on miles with the current purchase promo?
I can get 1 M[illion] miles (spread among 5 family members) for about $18,000. I have a feeling that rising demand will push up the price on mileage purchases and you are not going to see 1.8 cents per mile ever again. Thoughts?
I say no.
Three reasons not to do this:
- American’s coming March 22 changes do not make their miles worth MORE. Miles are worth less, so if you wouldn’t spend 2 cents a mile before I think it would be a harder case now.
- We have seen American selling miles cheaper than before their merger with US Airways. They have come closer to following the US Airways model and remember that US Airways sold miles at 1.88 cents a mile 3/4ths of the year. So this probably isn’t the last shot.
- It’s easier for them to sell miles cheap going forward when the awards that are more costly for them to offer are more expensive to members. I’d say the announced changes make it more likely they can keep selling miles cheap rather than less likely.
American Airlines Boeing 787 Business Class
The best argument, I think, for buying miles ‘on the if-come’ (rather than top off an account for a specific award) is that we now know what the award chart is going to look like. Instead of buying on a guess about the future value of miles, we know what the price of awards will be. It’s unlikely that award routing rules will get more restrictive or that availability will get worse. So the value of American miles — while less than they used to be — are likely to be pretty stable.