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A month ago American was offering to sell miles at the lowest price I’ve ever seen from the AAdvantage program. At 1.72 cents apiece it was even less than US Airways Dividend Miles had been selling for during their promotions for the past couple of years of that program.
Clearly with US Airways management in charge of the merged airline, their view of monetizing miles has taken hold — and there are mileage sales at least as often as there aren’t sales now. (And non-sale periods must only be to retain the illusion that there’s a higher price and make it seem like lower prices are limited-time offers.)
Unfortunately, with a new offer they’re out with, American has brought the price back to 2 cents.
Through August 31, earn up to 85,000 miles when you buy American Airlines AAdvantage® miles or gift miles to a friend or loved one. Don’t miss this chance to boost your AAdvantage account balance by up to 235,000 miles.
How to Buy Miles for 2 Cents Apiece
Here’s the bonus chart, to maximize earning you need to buy 150,000 miles (and get 235,000).
That costs you a whopping $4787 but works out to 2 cents per mile.
It remains striking to me that you’re spending $4700 on their proprietary currency and they hit you with a $30 junk fee for agreeing to take your money. The tax law does seem to suggest, though, that you can get your 7.5% refunded if you don’t use your miles for domestic travel. I’d love for someone to go through the effort to get their taxes back and share their story.
There’s No Need to ‘Jump’ on a 2 Cent Offer – This is the New Normal
The new price of American Airlines miles is certainly closer to 2 cents a mile than 3 cents a mile.
- In mid-November American offered a purchase miles bonus through November 30 that they extended through January 4 which allowed you to buy miles at 2 cents apiece.
- Then they dropped the price even further to 1.8 cents. The promo pricing went back to 2 cents for February. Then for April they returned to 1.8 cents.
And after recently announced program changes including revenue-based mileage-earning that went into effect yesterday and the March 22 award chart devaluation selling miles at a higher price than six weeks ago isn’t the best way to entice me.
This is a Reasonable Price for Miles, But it’s Regular Price Not a Sale Price
Is something really a sale when it’s on sale half the time? Not everyone thinks so.
It’s hard to resist a good sale. See something that’s 40 or 50 percent off and you may want to grab it before the price goes back to normal. Retailers know that.
But is that “sale” price really a special, reduced price?
Not always, according to a new study by the non-profit Center for the Study of Services, also known as Consumers’ Checkbook. They concluded that some well-known stores seemed to have perpetual sales on certain items, so the “discounted” price is really the regular price.
“We believe that whenever a store has something that’s offered at a sale price for more than half the time, they’re misleading their customers. And in the case of Sears and Kohl’s and often Macy’s, it’s almost all the time,” said Kevin Brasler, Checkbook’s executive editor. “They’re using the illusion of deep discounts to keep people from shopping around.”
In this case the people who are really ‘tricked’ are those paying regular price — unless they’re desperate for miles at that time in which case miles at the margin could be worth the higher price to them. At a minimum though when American is offering miles for sale around 2 cents each they ought to lower the price of buying miles through the reservation booking path to match.
I’d add that American offered miles for a bit over 1.8 cents apiece in May as part of a ‘special 30th anniversary sale’ and then came back a month later with a lower price once the anniversary sale was over.
Mileage Purchase Bonuses are Strategically Useful
This can be useful though — especially to top off an account, but in some cases to buy premium cabin flights at a discount. American lets you put awards on hold for 5 days under most circumstances. So you can secure awards, then buy the miles, then go back to ticket.
If You Intend to Fly Coach It’s Unlikely This Will Be a Good Value
Business class between the US and Europe is still just 115,000 miles roundtrip. Focus on Iberia or airberlin availability to avoid fuel surcharges, or American’s own flights on 787s, 777-300ERs, and reconfigured 777-200s for the best experience. 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).
American Boeing 787 Business Class
This mileage purchase bonus isn’t something everyone should jump on. But some people will find it a worthwhile bonus.
What Credit Card Should You Use?
One change since the merger is that unlike US Airways, American processes these transactions themselves. As a result purchases count as bonusable spend for credit cards that give extra miles for airline purchases. (US Airways sold miles via Points.com, who processed the transactions.)
American promotes this:
And as always, use your eligible AAdvantage® credit card and earn additional AAdvantage® miles per $1 spent buying, gifting or sharing AAdvantage miles.
Why you’d want to do this — instead of putting the spend on a Chase Sapphire Preferred Card which earns double transferable points or a Premier Rewards Gold Card from American Express which earns triple Membership Rewards points or a Citi Prestige Card which earns triple points I have a hard time fathoming.