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I’ve had a few emails from readers asking if they should be buying Advantage Miles in the current promotion so I thought I’d quickly address the issue.
Firstly, if you’re thinking of buying AAdvantage Miles now, where were you two weeks ago when American Airlines was still offering miles at 1.8 cents?! The current promotion is nowhere near as good.
Secondly, and before I take a look at American Airlines’ latest attempt to flood the market with AAdvantage Miles, you need to ask yourself why you’re thinking about buying miles in the first place.
What’s your plan? Do you have a trip in mind or are you still considering your options? Have you found awards you want to book or are you still waiting for them to become available?
If you don’t have a concrete plan for what you’re going to do with any miles you purchase you should not be considering a purchase in the first place. Period.
Buying AAdvantage Miles – The Cost
The current AAdvantage Miles promotion is, as always, a tiered promotion:
And, because of the nature of the tiering the best cost per mile is to be found at the bottom of the top-tier.
If you were to purchase the maximum number of miles that AAdvantage will sell you (150,000) you would end up with 200,000 AAdvantage Miles (150k + 50k bonus) at a cost of $4,786.88.
That works out to a little under 2.4 cents/mile.
If, on the other hand, you were to purchase 100,000 AAdvantage miles (the minimum number of miles you can purchase while still receiving the maximum 50,000 mile bonus) you would end up with 150,000 AAdvantage Miles (100k + 50k bonus) at a cost of 3,2012.25,
That works out to a little over 2.1 cents/mile.
As I mentioned at the outset that’s not nearly as good a price as the 1.8 cents/mile that was on offer until 4 January.
Should You Buy AAdvantage Miles?
If you’re thinking of buying miles in case an award you like becomes available you should not be buying miles.
If that award never becomes available you’ll be left with a pot of AAdvantage Miles that (a) will be less valuable come 22 March (devaluation day) and (b) you may have been able to purchase at a cheaper rate in a future promotion.
If you’re thinking of buying miles in order to book an award that is currently available then, possibly, buying miles may be ok.
Steps to take:
- Work out how many miles you need to book the award
- Work out the cost to buy the miles you need
- Find out the cost of the award you want to book – what taxes and fees will you have to pay on top of the AAdvantage miles you’ll be handing over.
- Find out cash price for the tickets you wish to book with miles – there are a lot of good premium cabin fares around so using miles may not be the right thing to do.
Example:
If you’re planning on using the miles you buy to book a pre-devaluation Business Class trip between the US and Europe on American Airlines it will cost you 100,000 AAdvantage Miles + taxes (for a round-trip award).
If you purchase the miles for this award (at the best cost/mile this promotion offers) they will cost you a little over $2,100 and, when you book the award, there will be taxes to pay on top of that too.
How much would that same Business Class trip cost you if you bought it for cash?
There are numerous occasions throughout the year where round-trip Business Class flights (between the US and Europe) can be picked up for under $2,000 so, if you buy miles for the same trip, you would be overpaying.
Always work out how much a trip would cost you were you to pay with cash before making any decision on purchasing miles for an award.
Don’t forget that cash tickets will earn you Elite Qualifying miles and Redeemable miles too so be sure to incorporate that into your calculations and thinking.
Is It Ever Ok To Buy Miles When Awards Aren’t Yet Available?
Yes, but only if you know what you’re doing.
American Airlines only allows you to book awards 331 days out so you may well be planning a trip right now for which the 331 day marker has not yet passed – awards haven’t yet been offered so you know that no one else has booked up all the award inventory an airline is prepared to release.
On top of that there are certain routes that you can say, with near-certainty, will offer award availability once the 331 days have passed (most Etihad Europe-Abu Dhabi routes fall into this category).
Etihad has LHR-AUH Business Class availability all through December so you can be reasonably confident that they’ll release inventory going forward
When those two situations coincide it’s not a terrible idea to purchase miles for an award….. providing you’ve worked out how much the cash tickets would cost and can say that the economics of purchasing miles are in your favor.
You need to have done your research before you attempt what I’ve just outlined above. There’s no point “hoping” that an award will become available because “now and again” one will turn up. That’s speculation and you shouldn’t be doing it.
Check out the route(s) you’re interested in and get a feel for what award inventory on that route is like. Only when you’re comfortable that you’re seeing a pattern should you consider it ok to buy miles for such an award.
Bottom Line
Since the US Airways management team took over at American Airlines we’ve been seeing very regular AAdvantage Miles promotions. The last promotion ended on 4 January and the next one was offered less than a week later – so there’s no need to worry that you’ll be missing the boat if you pass on this one.
In general, if you make sure you work out your costs and don’t speculate blindly you should be fine. As far as the current promotion goes I don’t think very much of it. We already know that American is prepared to sell AAdvantage Miles at under 2.0 cents/mile so, unless you have a pressing need for miles, why pay more than that?
