Online Travel Reviews points out that Icelandair is offering a 20% bonus on the purchase of Saga Club miles through September 28, 2012. You can purchase up to 100,000 Saga Club miles per year, and you need to be a member of Saga Club before being able to access the promotion.
Through this promotion 30,000 Saga Club miles (25,000 base miles plus the 5,000 mile bonus) can be purchased for 39,500 Icelandic Krona, which is the equivalent of ~$328USD.
This is interesting in that you can redeem 20,000 Saga Club miles for an Alaska Airlines coach ticket and 30,000 Saga Club miles for an Alaska Airlines first class ticket.
Now, the above specifically states that these redemption rates apply for tickets within the Continental US and Canada, though Online Travel Review insists those are the redemption costs for any destination, including Mexico, Alaska, and Hawaii. The above also doesn’t explicitly state that those costs are roundtrip, though Online Travel Review has apparently priced several itineraries and has confirmed that those are the roundtrip costs.
So in theory this would mean you can pay roughly $328USD for a roundtrip ticket in first class between the east coast and Hawaii or Alaska.
The award space that Icelandair has access to should match the saver award space that Alaska Airlines offers their own Mileage Plan members. Award availability is great on some routes (like California to Hawaii, west coast hops, and some flights to Alaska), while it’s awful on other routes (like Seattle to Hawaii and virtually all transcons).
You can search award availability either on this page of the Alaska Airlines website, or through ExpertFlyer.
It’s an intriguing promotion, and it will be interesting to see whether Icelandair decides to pull their mileage bonus promotion (though even without it this can still be a great deal). I’m somewhat concerned by the verbiage about award costs being for flights within the Continental US and Canada, as I fear Icelandair could actually enforce that if too many people take advantage of this. But if you take advantage of this now and plan on making a booking first thing in the morning I’d say you’re probably safe.
I was hoping this promotion would be useful for travel on Icelandair as I’m dying to visit Iceland, though unfortunately the numbers just don’t work out on those flights.