American AAdvantage keeps lower the price it sells miles for. Nearly every single month miles are on sale. Regular price only exists as a reference point to determine the percentage off each sale can claim to be.
Now the price of miles has found itself as low as 1.72 cents which is even lower than US Airways had been selling miles for in the years immediately prior to taking over American.
Former US Airways President-cum-American Airlines President Scott Kirby is now President at United.
And he knows that the airline is in control of their cost of redemption, and that any miles sold above that cost generates profit.
Even as customers shy away from earning traditional airline miles in the face of competition from proprietary bank currencies and devaluations (United devalues again November 1) they can still sell miles at a profit if they drop the price low enough. They sacrifice margins for volume.
And United has dropped its price to a level I don’t recall seeing publicly available as part of an ongoing promotion. They’re offering up to a 100% bonus through September 12.
You have to give your MileagePlus number and last name to see the bonus details:
- 5000 – 19,000: 25% bonus
- 20,000 – 49,000: 50% bonus
- 50,000 – 75,000: 100% bonus
Including taxes (which you may be able to get back from the IRS) at the 100% bonus level you’re paying 1.881 cents per mile.
Oh and they enter you in a sweepstakes for more miles when you buy — though if you want to enter without a purchase those details are here.
United sells miles via Points.com. That means you won’t get reimbursed for the purchase as a travel credit. And it actually means that Points is taking a cut of the purchase price. (They may also be guaranteeing some minimum sales to United, buying in bulk and reselling at a profit.) United itself is earning meaningfully less than 1.88 cents apiece through this arrangement.
While 1.88 cents is more than United miles are worth the offer can work for you to top off an account, or even buying from zero if you were going to book one of the unique values (that happens to be disappearing November 1) like Australia to Hong Kong via Bangkok for 40,000 miles in first class.
Thai Airways Spa, Bangkok
Terms and conditions:
- Promotional offer valid until 11:59 p.m. CT on September 12, 2017.
- Miles are available in increments of 1,000 up to a maximum of 75,000 miles.
- Bonuses will be calculated on a per transaction basis only. The bonus amount applicable to a transaction is shown in the chart. Transactions may not be aggregated to calculate the bonus.
- Bonus Miles will generally be credited to the recipient’s MileagePlus account when the transaction is complete; provided that certain transactions may take up to 48 hours.
- Bonus miles count towards the 150,000 mile annual limit per account.
- Purchase up to 150,000 miles per account per calendar year.
- Credit card will be billed immediately upon purchase.
- Mileage rates and other fees and offer terms are subject to change.
- Miles are nonrefundable.
- Purchased miles do not count toward MileagePlus Premier® status.
- All MileagePlus Program Rules and terms and conditions apply.
- GST/HST is charged to Canadian residents.
All I want to know is if Gary Leff is buying?
While the cost per mile is close or even below what US Air had sold miles for in the past, the miles are worth less for awards of course. For example I used to be able to book business class to Europe from USA for 60k roundtrip during off peak periods. Not so anymore. Now it’s what 115k. Nearly double. I know this is obvious but it makes me feel better to vent about the devaluation.
Also WHY doesn’t Points.com change their credit card id to “travel”. It’s not like that would cost them anything.
@DaninMCI Actually it may cost them something. Interchange fees are tied to the MCC.
@DaninMCI. So true. I still value internally miles at 2 cents/mile, like it was before multiple devaluations. But that is to make me feel better. The actual values is closer to 1 cent/mile.
One way saver business on BKK-JFK is 80K plus $48 on Asiana. Round trip is 160,000. Cannot even buy that many. If you could, the cost would be 160,000 x 1.88/100 + $48 x 2=$3,104. Not really that cheap. The Chinese airlines have business class fares at that level. Fin Air sometimes. However, Premium economy on EVA is about $1,500 round trip according to Google Flights . The savings of $1,500 buys 10 days in a really nice hotel with free breakfast in BKK.
Besides miles sales are early indicators of devaluations.
I think I pass.
Should the excise tax even apply to miles purchases made by foreigners ( or álien’ residents of non-US countries, possibly including Mars) which are made with non-US credit cards from those countries thankfully outside the byzantine web that is the US tax system?
United will sell enough miles to get to a point where they can be devalued, so that any gain on purchase is lost on redemption. Their game, their points and their valuation. All subject to change.
The usual caveat holds: buy if you have an immediate use in mind. Otherwise, you’ll wake to find that United has lowered the value again.
@Ricardo – No I am not
Why bother!?! Rewards are hard to come by at any reasonable level / cost & as said they just keep devaluing them. Ignore the points & go for lowest reasonable fares no matter what class of service.
@Ronni has the idea. Cash tickets are available many places at prices I never thought I’d see in my lifetime. Why convert cash to a currency thst keeps devaluing – airline miles are not worth nearly what they were.