As I posted about earlier today, American is celebrating the 35th anniversary of the AAdvantage program.
Through June 1, 2016, American is offering up to a 35% discount plus 15,000 bonus miles on the purchase of AAdvantage miles.
The 35% discount applies as long as you purchase at least 35,000 AAdvantage miles. On top of that there are tiered mileage bonuses for larger mileage purchases:
- Buy 135,000-149,000 miles, get 5,000 bonus miles
- Buy 150,000 miles, get 15,000 bonus miles
To achieve the lowest cost on a per mile basis you’ll want to purchase exactly 150,000 miles. If you did that, you’d receive a total of 165,000 miles at a cost of $3,122.02, which is a cost of ~1.89 cents per mile.
As usual, AAdvantage accounts less than 30 days old aren’t eligible to purchase miles. Furthermore, there’s a cap of purchasing 150,000 AAdvantage miles per account per calendar year (pre-bonus).
As far as the relative value of this promotion goes, this is significantly less than American used to sell miles for pre-devaluation. However, in April American sold miles for as little as ~1.81 cents each, which is less than they’re selling them for now. So while this is more expensive than what they charged last time, it’s otherwise the lowest cost at which they’ve sold miles in a long time.
Is it a good deal?
With American’s recent devaluation, my valuation of AAdvantage miles has decreased from ~1.8 cents to ~1.5 cents each. It’s international first class award redemptions which went up in price most, with awards increasing in price by up to ~70% in some instances.
Meanwhile the cost of most business class awards increased as well, though not nearly as drastically. As a reminder, here’s the cost of first and business class awards originating in the US under the new program:
|Contiguous 48 U.S. To:||Business Class||First Class|
|Contiguous 48 U.S. States||25,000||50,000|
|Canada & Alaska||30,000||55,000|
|South America Zone 1||30,000||55,000|
|South America Zone 2||57,500||85,000|
|Middle East / India||70,000||115,000|
|Asia Zone 1||60,000||80,000|
|Asia Zone 2||70,000||110,000|
Qatar Airways business class continues to be a great use of American miles
I find the cost of business class redemptions to still be reasonable in most cases, and if you’re essentially picking up miles at ~1.9 cents each, there are instances where buying miles can make sense.
You’ll of course want to crunch the numbers for yourself in order to decide.
One other thing to be aware of is that there are a couple of other great programs selling miles at the moment.
Alaska Mileage Plan is presently offering up to a 50% bonus on purchased miles, which translates to a purchase rate of ~1.98 cents per mile. On a per mile basis I consider Mileage Plan miles to be the most valuable mileage currency out there, so there are plenty of circumstances under which that’s a great deal. For example, Alaska has extremely attractive redemption rates on Cathay Pacific, much better than the rates American charges nowadays.
Avianca LifeMiles is also offering a bonus on purchased miles, of up to 125%. This lowers the cost per purchased mile to as little as 1.47 cents, so it’s a great opportunity to pick up discounted premium cabin Star Alliance tickets.
Which credit card should you buy miles with?
As of last year, American processes mileage purchases directly (rather than through points.com), which means the purchase of miles does qualify as airfare spend. Therefore you’ll want to consider using one of the following cards for your purchase, since they offer the following bonus miles for airfare spend:
- American Express® Gold Card — 3x Membership Rewards points per dollar spent
- Citi Prestige® Card — 3x ThankYou points per dollar spent
- Citi Premier℠ Card — 3x ThankYou points per dollar spent
- Chase Sapphire Preferred® Card — 2x Ultimate Rewards points per dollar spent
Of course there was a lot more value to be had from AAdvantage miles before the devaluation, but there are definitely still circumstances under which this could represent a great deal, particularly for travel in international business class.
This is one of the better prices we’ve seen on the purchase of AAdvantage miles, though I’d expect that given the recent devaluation.
Over time I wouldn’t be surprised if we see American continue to lower the cost of purchased miles to reflect the higher redemption rates. As before, you’ll have to crunch the numbers for yourself and decide how much you value them.
Lastly, keep in mind that American allows five day award holds (meaning you can hold an award ticket, purchase miles, and then ticket the reservation).