American Offering Miles For 1.91 Cents Each…..But Don’t Jump In Too Quickly

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American Airlines has opened up another of its regular “buy miles and get a bonus/discount” promotions so I thought I’d take a look at what value the promotion offers and if its worth readers considering a purchase.

This latest promotion runs through to 11:59pm CT on 28 November 2016 and, just like just about all other American Airlines miles promotions, it’s tiered. At the top end you can buy miles with a 67% bonus while, lower down the scale, the bonuses range from a somewhat pointless 10% through to a more acceptable 60%.

Buying AAdvantage Miles – Headline T&Cs

The T&Cs don’t vary too much from promotion to promotion but it’s always worth making sure you know where you stand:

  • Minimum purchase is 10,000 miles
  • Buy miles by 28 November 2016 to get the bonus
  • Each AAdvantage member is limited to purchasing or receiving in a calendar year, a combined total of no more than 150,000 AAdvantage miles (before bonuses)

The Promotion

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As with all AAdvantage promotions that are tier in this way (i.e a fixed bonus for a range of miles purchases) you’re better off buying the minimum number of miles in each band.

So, taking the 100,000 – 149,000 band as an example:

If you were to purchase 100,000 miles, American would give you a 60,000 miles bonus….

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…at a cost of $3,201.25 after taxes and the obnoxious processing charge

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This would see you get 160,000 miles at a cost of  2.0 cents each.

If you were to buy 140,000 miles you’d still get a 60,000 mile bonus…..

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…..but you’d pay $4,469.75…..

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…which would see you net 200,000 miles at a cost of 2.23 cents each – a worse deal.

In this promotion the lowest price per mile is attained by buying the maximum allowed – 150,000 miles:

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This works out to being 250,000 miles at a cost of 1.91 cents per mile.

Should You Buy Miles At 1.91 Cents Each?

Firstly, this cost per mile needs to be put in context.

American offered AAdvantage miles at 1.8 cents each in December last year and again in April this year but, more importantly, the airline also offered AAdvantage miles as just 1.72 cents each in June…so straight away you can see that this latest promotion isn’t exactly the airline’s best offer.

In fact it’s the same offer as was offered back in July.

But, leaving aside what the airline has offered in the past, is 1.91 cents a level at which you should be buying?

The simple answer is “probably not”.

Redeeming On American Airlines

American Airlines 787 Business Class SeatAmerican Airlines 787 Business Class

The biggest issue with AAdvantage miles is that the cheapest awards (Miles SAAver awards), which are for travel on American’s own flights, are next to impossible to find on most routes.

Sure, from time to time the airline goes nuts and releases awards in great big batches….but then it’s famine for months at a time. This is essentially a stealth devaluation to the AAdvantage program.

You could calculate that, at 1.91 cents/mile one-way Business Class flight to Europe would cost $1,098 (which isn’t too bad if you’re not prepared to wait for one of the periodic sales)…but that’s assuming you can find such an award. The chances are that you won’t be able to.

Redeeming On Partner Airlines

Travelers used to be able to get some very nice redemptions on partner airlines (like Cathay Pacific First Class to Asia for just 62,500 miles or Etihad Business Class from Europe to the Middle East for just 30,000 miles) but those all went away when American overtly devalued the AAdvantage program in March this year (announced this time last year).

A one-way First Class award from the US to Hong Kong on Cathay Pacific now requires 110,000 miles which, at these prices, cost $2,101. I’m sure some may think that’s ok but, as someone who’s in this hobby to travel in comfort for as little as possible, that’s simply not worth it.

cathay-pacific-777-first-class-5-0Cathay Pacific First Class

There are also examples that may jot look too bad but, upon closer inspection

A roundtrip Qatar Airways Business Class award from the US to the Middle East now requires 140,000 miles($2,674 in this promotion) and, while wouldn’t be too bad if this was a cash fare, once you take into account the lost earnings (you don’t earn miles on award travel) this isn’t in any way cheap.

Bottom Line

Don;t buy miles in this promotion unless you’ve either…..

(a) Found SAAver award space online and are ready to book (you can put the ticket on hold while you purchases the miles) .

(b) You’ve found a partner award online, you’ve run the numbers and it works out to be a reasonable (or better deal).

Unless you fit into either of those criteria you probably shouldn’t be purchasing miles in this promotion.

On top of all that, I’d guess that American probably has one more promotion left up its sleeve for this year….. and I’m willing to bet that it will be better than this one…..but don’t bank on that, I’m not a soothsayer 🙂

Note: American Airlines processes its own miles sales so, if you do buy miles, make sure you use a credit card that gives an airline or travel category bonus – don’t leave miles/points on the table.

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