(Offers on this page are now expired and are no longer available.)
The more things change, the more things stay the same — at least when it comes to the “New” American Airlines. Although the airline has completely merged frequent flyer programs, loyalty status tiers and reservation systems, certain aspects of the old US Airways Dividend Miles program remain, including the sporadic award mile sales.
Many American AAdvantage members received an e-mail over the past weekend alerting them of the latest mileage sale, offering bonuses if they purchase miles for themselves or gift miles to another account. At the highest end of the table, frugal travelers can earn up to 42,500 bonus AAdvantage miles for a purchase of over 100,000 AAdvantage miles.
Although it may sound like a tempting offer, does it actually add up to purchase miles instead of earning them through normal spending activities? It all depends on the personal scale of economy for those frugal travelers out there, and their travel goals throughout 2016.
At the minimum thresholds to earn bonus miles, travelers can earn nearly a 50 percent bonus for their purchase. At the lowest end, which grants 7,000 bonus miles for purchasing 20,000, travelers earn about a 35 percent bonus for their purchase. At the higher end of 100,000 miles, frugal travelers can receive 42.5 percent bonus miles for their purchase. On the surface, the value gained from the bonuses may look appealing.
Digging a little deeper, these values may not be what they seem. American agrees with the overall consensus of putting cash value to points and miles, as they value AAdvantage miles at 2.59 cents per mile. At the lowest end of the table, with the included mileage bonus (20,000 purchased miles plus 7,000 bonus), travelers are paying around 2.1 cents per mile. At the highest end of the table – 150,000 purchased miles plus 42,500 bonus miles – travelers would actually pay slightly more — 2.2987 cents per mile. Therefore, one can argue that earning award miles on an economy fare might be a much more frugal move, at least until American switches to a revenue-based awards program later this year.
However, it is also prudent to consider that the points and miles game isn’t always played on a small scale. Instead, the goal is to spend as little as possible to get the most out of our adventures. To that end, would it make sense to purchase miles?
At the lower level, purchasing miles may not be the best value for award travelers. During this sale, flyers can purchase or gift 27,000 miles for $590. Those 27,000 would just be enough to purchase a round trip economy MileSAAver award flight. In this situation, it may make more sense to buy a ticket in cash and earn elite qualifying miles, or earn the mileage through a credit card sign-up bonus.
However, looking at higher status classes and longer flights, there may be a sweet spot where it makes sense to purchase the miles. For $2,802.50, travelers can purchase 95,000 AAdvantage miles, with a 30,000-mile bonus, for a grand total of 125,000 miles. With those miles, travelers can get a Business/First MileSAAver award ticket to South America, Europe, Asia, or the South Pacific, where they are available. For those who wish to fly strictly in first class, that same cache of miles will purchase a First Class MileSAAver award to Europe, South America and certain destinations in Asia.
Using Google Flights to estimate American fares to those three regions from New York in the summer, business class fare currently runs between $2,000 and $5,000, depending on the destination. Although prices are subject to change and fluctuate, spending the $2,802.50 may be cheaper than purchasing a business class ticket. In addition, the cache of miles allows travelers to travel on their terms, instead of being corralled into certain dates under a fare sale.
While sales may provide discounts, they are only actualized if frugal travelers can redeem them for long term value. Although a point or mile sale may be tempting, it only works for those travelers who can use them to fly frugal.
Do you pay for points when they go on sale? Or do you earn your points through alternate means? Let me know your thoughts in the comments below!
[Image via Getty]
All Articles
Delta® Reserve for Business
- Annual Fee: $450 fee
- Foreign Fees: No
- Card Type: Travel
Add to Favorites
- Earn 40,000 bonus miles and 10,000 MQMs after you spend $3,000 in purchases with your new Card in the first 3 months.†
- Earn 15,000 Medallion® Qualification Miles (MQMs) and 15,000 bonus miles after you reach $30,000 in eligible purchases on your Card in the calendar year.
- Earn 2 Miles per dollar spent on eligible purchases made directly with Delta. Earn 1 mile on every eligible dollar spent on purchases.
- Settle into your seat sooner with Priority Boarding and enjoy 20% savings on eligible in-flight purchases in the form of a statement credit.
- Pay no foreign transaction fees when you spend overseas.‡
- Complimentary Delta Sky Club® Access.‡
- Terms and limitations apply
- See Rates & Fees
Delta® Reserve for Business
- Annual Fee: $450 fee
- Foreign Fees: No
- Card Type: Travel
| FTG Review | Reward Breakdown | Points Breakdown |
|---|---|---|
Breakdown
Earn (pt.)
Spend
3 months
0
$3,000
Per dollar on eligible purchases with Delta Purchases
2.00
$1
All Purchases
1.00
$1
|
||
|
Already have this card? Maximize your rewards.
|
||
