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Are Pricier US Airways Miles Still a Buy?

Are Pricier US Airways Miles Still a Buy?

With its recurring 100 percent bonus on purchased miles, US Airways has made a name for itself as the industry’s premier discounter of frequent flyer miles.

Two years ago, when that discounting began, the base price to buy US Airways miles was 2.5 cents each. That allowed Dividend Miles members to purchase 80,000 miles—enough for a business-class award ticket to Europe—for $1,030 plus tax.

And the price to purchase a business-class ticket to Europe? At the time, a ticket on US Airways’ Star Alliance partner Lufthansa, between Los Angeles and Paris, would have cost between $3,257 and $8,665.

The economic case was crystal clear: Load up on discounted miles; redeem them for premium-class international tickets; save a bundle.

A Great Deal, Downgrade #1

The value proposition has taken a couple of hits since then.

First, US Airways bumped the number of miles required for European business-class award tickets from 80,000 to 100,000.

And second, the airline increased the cost to buy miles, from 2.5 cents to 2.75 cents apiece.

Factoring in the price changes, the cost to purchase enough miles for an award ticket to Europe increased around 33 percent, to $1,375, not including taxes.

Still, test bookings at the time showed business-class tickets from the West Coast to Frankfurt going for $6,405. Buying discounted miles instead of paying market price for that ticket would have amounted to an eye-popping 78.5 percent discount.

A Great Deal, Downgrade #2

The latest development in this promotional saga is yet another spike in the cost of US Airways miles.

Effective immediately, the price of miles is 3.5 cents each, plus a "tax recovery charge" of 7.5 percent. That’s a 27 percent increase from the previous price.

With the new pricing, and assuming US Airways reprises its 100 percent bonus for purchased miles, buying 100,000 miles will cost $1,909, all in.

That’s almost double the cost to buy enough miles for an international business-class ticket from just two years ago.

Deal or No Deal

While the cost of miles has soared, the price of tickets has risen as well.

Today, purchasing a business-class Los Angeles – Frankfurt ticket on Lufthansa for travel later this month would cost $7,633.

Even with the less favorable terms, US Airways’ mileage discounts can yield significant savings if the purchased miles are used for pricey international tickets.

Yes, you’ll still have to wrestle with the capacity controls that make award travel a hit-or-miss proposition.

And yes, there’s always the "real" value question: Is a business-class ticket truly worth 10 times as much as a coach ticket?

But even adjusting for the hassle factor, and assuming that business class is somewhat overpriced, the deal can be compelling.

Reader Reality Check

Have you taken advantage of US Airways’ mileage discounts? Where did you fly?

With the new pricing, will future discounts still be compelling deals?

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  • sw

    It seems that US Air has also changed it’s policy regarding accumulating miles via a Star Alliance partner. I flew JFK to BKK on Air China, thinking that I would earn 100% mileage, there was nothing in the fine print to indicate otherwise. Upon returning I learned that I would only get 50% mileage. The US Airways representative admitted that there is absolutely no way for me to know ahead of purchase exactly how much mileage I can earn on a Star Alliance flight. She also admitted that this didn’t make any sense since mileage is part of the incentive in buying a ticket (i would NOT fly Air China again, NOT a pleasant experience, 6hr layover in Beijing airport in winter with no heat!). However, she said, I will always earn 100% on US Air flights, an irrelevant point since US Air does not fly to BKK. I’m very disappointed with US Air’s frequent flyer program all around.

  • Sigrid

    I am another disappointed member of USAirways Dividend Miles (since 1984). I think 1) it is extremely hard to get seats and for instance for Europe, starting end of May, some flights need 100 miles per trip. 2) All the extra expenses such as change fees of $ 150 and the same for returning miles into the account, $ 75 for reservations made less than 14 days prior to departure, the so-called “choice seat”, an absolute joke (!) $ 30. Yes I know that USAirways is not the only one! In a recent complaint to the airline I asked when they would be charging passengers for the use of toilets. I did actually get an answer that said, they don’t have plans at the moment.

  • Mark M

    US Airways’ Dividend Mile program is an absolute abysmal program. You can’t get flights using miles. First class upgrades are INFLATED EXTRA MILES. Baggage fees are ridiculous. Special seating is extra charge. We have stopped flying US AIRWAYS despite having more than 300,000 miles in their program. Greed 100, Customer 0.

  • steve morasco

    I’m also a Dividend miles member, and have to agree with all the comments..in addition, what no one seems to be touching on is all those members who are not traveling business class to Europe, but only flying continental US..The miles become much more expensive than getting a coach class ticket thirty days in advance or more…

  • sg

    I had given up on being able to use the 67k miles I had accumulated on US air as any domestic ticket was never available or was much more that the 25k which one expects. Then I purchased 7k miles and got a total of 14k mile with the promotion, that coupled with the 67k miles I had enabled me to buy a return coach ticket to India. Total cost of points purchased and airline fees worked out to about $350. Considerable value considering that the same ticket sold for about $1250.

    To get a rewards ticket on US Airways, one needs to really go to continental.com and find the tickets available for international star alliance flights. When dealing directly with US Airways on the phone one keeps getting a standard answer that no tickets are available. Give the details obtained from continental.com and the tickets get booked in no time.

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