New US Airways Buy Miles Promotion — Up To ~62% Bonus

For years, US Airways Dividend Miles would offer a 100% bonus on purchased miles more often than not. While they often mixed it up (sometimes there were thresholds required to maximize the bonus, sometimes they had targeted bonuses, etc.), you could always count on purchasing US Airways miles for ~1.88 cents each.

However, in September View from the Wing claimed that US Airways was selling miles at the current rate for the last time. Apparently they were going to change the way they sold miles, though that’s all we knew at the time.

That could have meant:

  • Raising the “base” cost of purchased miles, and then still offering a 100% bonus
  • Limiting the number of miles you can purchase per calendar year
  • Offering less than a 100% bonus

Or I’m sure there are a million other revenue “maximizing” ideas they could come up with.

Well, US Airways has just announced their latest Buy Miles promotion, and I guess this gives us an idea of what we should expect as the “new normal.”

Through November 12, 2014, US Airways Dividend Miles is offering tiered bonuses on the purchase of miles, as follows:

  • 10,000-14,000 miles = 4,000 bonus miles
  • 15,000-29,000 miles = 8,000 bonus miles
  • 30,000-49,000 miles = 19,000 bonus miles
  • 50,000-79,000 miles = 33,500 bonus miles
  • 80,000 miles = 50,000 bonus miles

US-Airways-Buy-Miles-1

In other words, if you max out the promotion you can purchase 130,000 miles for $3,010, which is ~2.32 cents per mile. That’s a bonus of ~62%.

US-Airways-Buy-Miles-3

That’s considerably more expensive than the previous cost of ~1.88 cents per mile. So you still get 50,000 bonus miles as before, except you have to purchase an additional 30,000 miles at the “normal” price of 3.5 cents per mile in order to get them.

~2.32 cents per mile isn’t a rate at which I’d speculatively purchase miles. But with a specific use in mind, it certainly could be worthwhile. For example, 130,000 miles is more than enough for Cathay Pacific first class roundtrip between the US and Hong Kong, so for ~$3,000 out of pocket that’s still a heck of a deal.

Cathay-Pacific-First-Class
Cathay Pacific 777-300ER first class

As a reminder, US Airways mileage purchases are processed by points.com, so don’t qualify as airfare for the purposes of your credit card.

I am curious to see what response US Airways gets with their new cost of selling miles, and if this is actually the new normal, or if they’re just testing the waters.

Do you think demand will drop considerably? If you previously purchased miles for ~1.88 cents each, would you purchase them for ~2.32 cents each?

Comments

  1. No way I’m buying for ~2.32 cents each. Only if I really needed to top up for an award. I would hope that they don’t sell much this time, and go back to offering 100% bonus…

  2. For example, 130,000 miles is more than enough for first class roundtrip between the US and Hong Kong, with a stopover in Europe on outbound or return for a round-the-word routing, and you can fly on airlines such as Cathay Pacific, JAL, Qantas, American, Qatar and British Airways as part of this, so for ~$3,000 out of pocket that’s still a heck of a deal (or somewhat more if you pay British Airways fuel surcharges on transatlantic sectors).

    FTFY. 😉

  3. The so-called “sweet spot” (if you can call it that) on the chart is actually at 50,000 miles, where you get a 67% bonus and the 83,500 miles at approximately 2.25 cents per mile. Not a great deal in my opinion. I hope they’ll bring back something better.

  4. @Ricardo

    Good luck with that. This is the typical cost for AA miles during sales. Now that US and AA are merging…

    Airlines aren’t stupid; they’ve twigged that people use miles purchases as a way to get discounted longhaul C/F. Of the three places where you can get discounted miles in the past (BD, US and AV), one disappeared in a merger (BD merged with BA), one is about to (US with AA), leaving Avianca all by itself. Both US and AV have jacked up mile purchase prices in the last year to eighteen months because they know options are limited. At a time where the industry is raking in profits, they don’t really have to worry about catering to people who use this as a way to buy first class plane tickets at 50%+ discount…

  5. @ JB — Which again, is why I wouldn’t *speculatively* buy miles at that rate. But if you can get more value of miles you purchase than what you pay, then it’s a good deal.

  6. @Lucky- I get that, but now that the AA Explorer Award has shuffled off this mortal coil (removes hat), the US North Asia award in F is probably the best RTW F award out there in terms of bang for miles spent/buck. You basically are getting a limited AONE3 with North America origin for somewhat more than $3000 USD (depending on how much BA you fly), but with no mileage/status accumulation. That’s pretty good (considering you don’t have to fly to Korea or Sri Lanka to start your xONEx :D).

    Given that there are pretty decent ways to get to the South Pacific for low mileage out of Hong Kong (UA, AS, AA all have reasonably priced South Asia/Hong Kong awards to Australia/NZ, even on UA partners, and BA Avios distance-based redemptions aren’t completely stupid either, and CX fuel surcharges are reasonable), and BA Avios Reward Savers in Europe are a pretty reasonable option, you could daisy chain some interesting travel on top of a US F award for a pretty small amount of additional miles- a couple stops in Europe to go with Asia or Australia/NZ…

  7. It’s a good thing I have over 500,000 miles from US Air share miles promos at 1.1 cents per mile! I knew AA was not dumb enough to offer that low a price.

  8. @ Lantean

    How did that work out when US jacked the mileage purchase prices up from the last few years? (I can remember generating US miles for 0.4 CPM with the right set of promos chained together, but these options are long gone now).

    Easy to say “don’t buy”, but if you are, say, in Australia and your options are severely jacked-up prices for economy tickets or paying a couple hundred extra quid to get out from Down Under in reasonable comfort, what, pray tell, are your options? Note that “churning” or “manufactured spend” isn’t usually one of them. A lot of places outside the USA don’t have the ability to manufacture mileage the way you do in the USA.

    AA just announced 1.2 billion (with a b) in Q3 profits. They’re not going to start cutting prices on miles because a bunch of people who won’t pay retail prices for the pointy end decide to go on strike and not to buy excess inventory (which is basically what award inventory is). Oh, look, more award inventory for people who actually fly on our planes and use our credit card, to go along with record profits, and slightly less revenue from mileage sales! Whatever shall we do, aside from taking wheelbarrows full of cash to our bank?

  9. @eponymous

    that’s exactly why US/AA should follow Alaska and only sell to people based in North America.

    we don’t buy Australian miles either…

  10. This is not to say “you should buy miles”, more that “you’re living in a dream world if you think prices for US miles are going to go down”. US is finito as an airline soon, done. AA historically has never sold miles much below 2.0 cpm. This is the new normal. Buy miles, or don’t, but get used to it. AA doesn’t have to scramble for revenue by being the official consolidator for alliance premium cabin inventory like US did.

  11. I agree with others that I don’t foresee cheap mileage purchases any longer. With no redemption in mind, not buying.

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