American Selling Miles At The Lowest Cost I’ve Ever Seen

Through July 8, 2016, American is offering up to a 10% discount plus 100,000 bonus miles when you purchase AAdvantage miles. This potentially represents the lowest cost at which I’ve ever seen American sell miles.

Buy-American-Miles

The 10% discount applies no matter how many miles you buy, while the bonus miles are tiered, and based on how many you purchase, as follows:

  • Buy 11,000-20,000 miles, get 2,500 bonus miles
  • Buy 21,000-50,000 miles, get 5,000 bonus miles
  • Buy 51,000-75,000 miles, get 15,000 bonus miles
  • Buy 76,000-100,000 miles, get 27,500 bonus miles
  • Buy 101,000-125,000 miles, get 45,000 bonus miles
  • Buy 126,000-149,000 miles, get 70,000 bonus miles
  • Buy 150,000 miles, get 100,000 bonus miles

American-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 250,000 miles at a cost of $4,311.19, which is a cost of ~1.72 cents per mile.

American-Bonus-Cost

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 the lowest cost at which I’ve ever seen American sell miles, at least in recent years. In April American sold miles for as little as ~1.81 cents each, which was otherwise the lowest cost I’ve seen on purchased miles in quite a while.

Of course it’s worth keeping this in context, since American did devalue their award chart in March. While the cost per purchased mile is the lowest I’ve seen, miles are also worth less than they were earlier in the year.

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 ClassFirst Class
Contiguous 48 U.S. States 25,00050,000
Canada & Alaska30,00055,000
Hawaii40,00065,000
Caribbean27,50052,500
Mexico27,50052,500
Central America27,50052,500
South America Zone 130,00055,000
South America Zone 257,50085,000
Europe57,50085,000
Middle East / India70,000115,000
Africa75,000120,000
Asia Zone 160,00080,000
Asia Zone 270,000110,000
South Pacific80,000110,000

Qatar-Airways-A350-Business-Class-30
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 ~1.7 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.

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:

I value points earned on the Premier Rewards Gold Card from American Express and Citi Prestige® Card at ~1.7 cents each, so that’s a further “return” of ~5.1% on your spend. When you add in that value, it essentially reduces the cost per purchased mile to ~1.63 cents.

Bottom line

On a per mile basis, AAdvantage miles were significantly more valuable before the devaluation. However, this is the lowest cost I’ve ever seen on the value of AAdvantage miles, and there are certainly circumstances under which it could make sense to take advantage of this promotion, especially if you’re looking to redeem miles for international business class.

If you are looking to buy miles, keep in mind that American allows five day award holds (meaning you can hold an award ticket, purchase miles, and then ticket the reservation). This promotion is valid for nearly a month, so you have a lot of time to decide whether or not you want to take advantage of this promotion.

Do you plan on buying American miles for as little as ~1.72 cents each?

Comments

  1. i clicked your link “offer” above and see 150,000 + 100,000 = $3,982.50
    $3982.50 / 250000 = 0.01593

    Am i wrong? or you overlook the 10%off?

  2. Lucky, $4300+ cash outlay is a lot of money I suspect for most of your readers. If we are to compare it against the value of the redeemed ticket, I suppose that will present a good ROI, provided that availability is good. But for prospective future travel, I do not see this as a good deal.

    Also, do you find the AAdvantage quality of service has slipped? I booked my wife on CX F, from SIN-SEA (combined with AS) using pre-devaluation rate. AA after issuing the ticket downgraded the reservation to J without offering any mileage credit. The cancellation was caused by CX extended their flight time from HKG to LAX by 5 minutes, and that was enough to negate the F award ticket. I ended up talking to a supervisor that was willing to work with me and found an F space to ORD and connect with AA to SEA, but still I could not believe that they refused to issue the credit.

  3. For readers that have a grandfathered Barclaycard American Aviator Silver card, purchasing using that card would generate 3x AA miles which would also lower the CPM to 1.64.

  4. Think this is great for those wanting to top off their accounts or if you have travel booked post Aug 1 that won’t accrue the mileage you need for a future redemption. Not sure if this is indicative of how AA will market sold miles in the future, but we all know we will need to be creative to earn more miles post Aug 1.

  5. AA Miles are becoming worthless. Of course airlines keep selling miles for less.

    Paid airfares are down. Airlines are trying to squeeze all of us sitting on miles by making redemptions harder, more costly, and giving out fewer miles.

    Say no to buying miles.

  6. Yeah seems a bit insane to buy that many miles unless you are going to use them straight away and it works out cheaper than buying a ticket for the route you want.

    I mainly like to earn miles for 0 or flying. Buying them just takes all the fun away

  7. It doesn’t look like there is any VAT for those of us unlucky ones buying from the UK! Is that right? But then there is the dreaded Amex forex fee. I will have to sit on this one for a bit and see how my travel plans develop in the next little while. Sure looks tempting if there are trips coming up.

  8. Out of curiosity: Marriott Rewards Visa also has 2X bonus category for airline “ticket” purchase. Would purchasing points from AA be considered a ticket purchase? I am considering racking up a few more points so that I can obtain a Marriott hotel+air package.

  9. The old US Airways (pre-merger) made a nice business out of selling miles and being the Star Alliance airline of choice for redeeming awards. AA used to be very stingy about selling miles. Post-merger, it seems that AA has gotten hooked on the easy revenue out of selling miles, but the reality is that AA premium international cabins are one of the toughest to find award space on, and they’ve gutted their partner award chart.

    It doesn’t matter if it’s the cheapest they’ve ever sold their miles for. Sorry AA, you can’t gut your charts and still expect to make money selling miles.

    Lucky, you hurt your credibility when you fail to mention that AA releases the least amount of award space on its own metal than any other US airline.

  10. If, as Ben says, the best use of this is for international business class, I am not sure this is such a great deal for a couple of reasons. First, with occasional exceptions, finding two or more award seats in international business class is generally difficult unless you are willing to be pretty flexible on dates or wait until shortly before your trip. Second, two or three times a year the airlines have fantastic sales on international business class – round-trip tickets of $1400 or less.
    I may be missing something here, but I would rather spend $2800 for two of these discounted international business class tickets than $4300 to purchase 250,000 miles which may be able to be used for those same seats if they are available (assuming the award is approximately 120,000 points round trip).

  11. Meh…as others have said above, buying slightly discounted miles to use for nearly unavailable premium awards, using devalued award charts, seems a foolish thing to do. Unless you are just a tad short of enough miles for an award you can put on hold while you do the purchase, it’s basically a typical Ponzi scheme….

  12. I read a while back that using the miles for hotels is a better bet than on airlines. Any feedback on that?

  13. @ Steve —
    I’m not a big fan of using miles for hotel stays, but I recently bought 160,000 Hilton Honors points for the price of 80,000. That $800 bought me a five-day stay at the Hilton Waikiki Beach in Honolulu this fall instead of the $1,200 price tag for the room. That means I paid $160/night instead of $240.

  14. Still not interested.

    With all the great business class fares out there (along with the huge gutting of AA’s award chart and limited availability of premium award flights) it doesn’t make sense to buy miles anymore. They would have to bring the cost down to around 1.00 – 1.25 cents/mile before I might be interested again. An added plus with the discounted J fares, availability and ability to earn miles on those flights.

  15. I’ve been earning and saving miles for a while hoping to take my fiancee for a great honeymoon to Europe in Business Class (I hate flying so it might as well be an experience) and I have 130k miles, I need around another 70-80 for business miles saver. Should I buy miles in this situation, earn through credit card bonuses or just wait for one of these sales I’ve reading about instead?

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