US Airways’ buy miles promotion this quarter is quite revealing…

For the past couple of years, US Airways has almost consistently sold miles for just under 1.5 cents each (after tax). Basically, they have offered a 100% mileage bonus on all purchased miles, at least quarterly.

I think most were expecting the promotion to be back right around now, though instead they’re offering a 40% discount on purchased miles through January 31, but only on a targeted basis for Dividend Miles members that purchased miles last year.

This is a pretty interesting development on a couple of fronts. Up until the third quarter of last year, buying US Airways miles was too good to be true. They had the most generous routing rules of any airline (not intentionally, their agents are just largely lacking geography skills), they had access to all Star Alliance award inventory, and they had very reasonable redemption rates. Then in the last quarter of 2010 they started blocking partner award availability, much like United has done over the years.

At that point the consensus was that the expense of paying partner airlines for these miles had finally caught up with US Airways. I’m sure this was working great for them for the first few years, as they got tons of cash from selling miles, without people emptying out their accounts. I’m guessing as more people actually went about redeeming their miles, they realized that people weren’t using their miles to fly US Airways Envoy to Frankfurt for 300,000 miles/person, but instead using miles to fly from the US to Asia via Europe in first class for 120,000 miles/person.

The fact that they’re offering a promotion for the first time which is less lucrative than the one they’ve been running for a couple of years now further confirms this.

I’m guessing this is the end of the “buying US Airways miles for less than 1.5 cents each” era, though this is still quite a good deal. In the long run this is probably best for those that actually fly US Airways, as maybe over time US Airways will loosen their practice of blocking partner award inventory, as there are fewer “cheap” miles out there.

Comments

  1. It was too good to last…
    Surprisingly I did buy a lot of miles last year on US Airways dividend miles and still didn’t get this promotion . Do you have to be a particular status (plat or chairman’s) to be eligible for the 40 % sale ?

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