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American Airlines has launched a new mileage sale for July in which it is offering discounts of between 10% and 45%. There’s nothing majorly complicated about this sale as for once, this is an AAdvantage sale in which the more miles you buy the cheaper the cost per mile becomes.
The key terms are as follows:
- The sale runs through to 31 July 2020
- The miles don’t count towards elite status
- Members may purchase, or receive as a gift, a maximum combined total of 150,000 AAdvantage miles in a calendar year.
- Bonus miles do not count towards the annual maximum total.
Full terms and conditions can be found on the promotion page (here)
As I mentioned in the opening paragraph, the more miles you buy in this sale the cheaper the cost per mile becomes (sometimes by only a small margin). Here’s the cost to buy 75,000 miles…
…which makes the cost per mile ~1.93 cents.
Here’s the cost to buy 149,000 miles…
…which makes the cost per mile ~1.92 cents.
To achieve the lowest cost per miles you’ll have to buy the full 150,000 that American Airlines will allow you to buy and that will cost $2,636.97…
…which gives you a cost/mile of ~1.76 cents.
To put this in a bit of context, ordinarily 1.76 cents/mile would be one of the lowest prices we see but we actually saw miles being sold at just 1.6 cents each earlier this year.
Ordinarily, 1.76 cents/mile would be the price of offered by one of the better American Airlines mileage sales but it’s hard to make a strong argument for people to dive in this time around.
Sure, if you somehow missed the great sale earlier this year and can see an amazing award available for travel in 2021 then an argument could be made for buying miles in this sale (assuming that you’d be saving money by buying miles), but if you’re not making plans right now, my hard and fast rule about miles & points purchases comes into play.
We already know that American is happy to sell its miles at just 1.6 cents each so, apart from the fact that no one should be buying miles if they have no immediate use for them, why would you choose to pay 10% above the price we know American is willing to drop to if you don’t have a trip on which to spend those miles right now? Why not wait and see if American’s need for cash forces it to bring back a sale in which miles cost just 1.6 cents each?
Even under normal conditions (when the travel world isn’t at a standstill), American Airlines runs mileage sale after mileage sale so there’s no doubt whatsoever that the airline will be back with another “deal” in August…so why not wait to see what that sale looks like if you have no pressing need for AAdvantage miles?
American Airlines sells its own miles (the transactions code as trave/airline purchases) so, if you can see a good reason for buying AAdvantage Miles in this promotion, make sure you use a credit card that will earn you a travel/airline category bonus (e.g. the Chase Sapphire Reserve Card which earns 3 points/dollar for all travel spending)
If miles & points aren’t what you’re looking to collect right now, a good cash back card is a good alternative.
No one should be buying miles speculatively in this sale…but then that goes for any mileage sale and isn’t just because of the situation we’re currently in.
For a lot of people, buying miles in this sale won’t make too much sense but for anyone looking to book high-end First Class awards, this sale may offer very good value…just make sure you stick to these simple rules:
- Work out how much the miles would cost to buy
- Find the cash fare for the same route and the same dates
- Compare the two
That should give you an indication of how good or bad the deal is.
If the math works in your favor you should buy as many miles as you need but, if it doesn’t, don’t try to persuade yourself that the deal is a good one anyway (math doesn’t lie) – keep your money in your pocket and move on.