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With the exception of US Airways, which routinely boasts a 100 percent bonus on purchased miles, the typical bonus offered by airlines in their buy-miles promotions is 20 or 25 or 30 percent.
Since by almost any measure, the normal selling price of miles is significantly higher than their actual value, such modest bonuses just aren’t enough to turn a bad deal into a decent deal, much less a good deal.
For the first time ever, American (as in: American in bankruptcy, American needing to shore up its bottom line) is upping the bonus for buying AAdvantage miles to as much as a respectable 50 percent. And they’re increasing the annual limit on purchased miles as well.
Merry Christmas, or just meh?
Through December 31, AAdvantage members who purchase miles will earn the following mileage bonuses:
The bonus miles will be deposited in the account of the purchaser if they are being bought for an AAdvantage member’s own account, and in the account of the recipient if the miles are being bought as a gift for another member. For the duration of the promotion, the annual limit on purchased miles has been raised from 40,000 to 60,000 miles.
Deal or No Deal
The all-in price for 90,000 miles, including the bonus, is $1,808.75 ($1,650 for 60,000 miles, plus a $35 processing fee, plus $123.75 Federal Excise Tax). That’s 2.01 cents apiece.
The question then becomes: Can you redeem the miles to squeeze more than 2 cents each in value from them? Redeeming 25,000 miles for a flight that would normally cost $500 would nominally net a 2-cent-per-mile return. But when you consider the hassle factor in booking capacity-controlled award seats, you’d probably want to use $600 as your breakeven. Since 25,000 miles is the price of a domestic award ticket, and the great majority of domestic flights can be purchased for less than $600, it’s hard to justify buying the miles at 2 cents each.
On the other hand, 90,000 miles is almost enough for a business-class award trip between the U.S. and Europe. A round-trip business-class flight between Los Angeles and London on American prices out at $6,470. And therein lies a compelling proposition. Buy a revenue ticket for $6,470. Or combine 10,000 miles from your account with 90,000 miles purchased for $1,809 and book it as an award ticket.
In that scenario, even accounting for the hassle factor, buying miles looks like a winning strategy.
Reader Reality Check
Have you purchased miles from an airline? Were you able to get good value for them?
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