Airlines seem to have almost never ending mileage sales nowadays. Some airlines literally have an offer out monthly (e.g. US Airways), where airlines like American and United tend to have less frequent sales. I do write about these sales here on LoyaltyLobby when they pop up, with my opinions.
A LoyaltyLobby reader sent me an email last week and wanted to get my opinion… when do I think that it is good to buy miles and at what price?
First, you need to familiarize with the programs that have mileage sales most often and what is the best use (this is subjective) of their miles.
Generally, I really like to use my United miles for usually rather complicated return Business awards that allow you to have a stopover and double open-jaw. This, combined with the number of Star Alliance airlines out there, gives you a lot of flexibility with destinations/routings. You can usually buy United miles during their sale or via the Award Accelerator around 2 to 2.2 cents each.
American Airlines is far stricter as to what routings and transits are permitted on their award tickets. Also, American doesn’t allow a stopover on award itineraries that don’t touch North America. There are some gems in the award charts, however. If you are based in Europe and need to travel to i.e. Maldives, it is only 30K AAdvantage miles in Business or 40K in First Class. American only charges actual taxes on non-BA/IB awards, so if you fly on Etihad the taxes are usually really low. American tends to sell their miles around 2 cents each.
US Airways has been the “gold” standard to buy miles for those that have preferred to get relatively inexpensive access to Star Alliance First and Business Class award seats. They sell miles almost monthly and they don’t seem to have a yearly maximum that you can purchase like American and United do. In the past 12 months, the price of the US Airways Dividend miles has varied from 1.1 to around 2 cents.
AviancaTaca LifeMiles is becoming the “new BMI” for Star Alliance award access. People are buying lots of LifeMiles and doing cash + miles award redemptions on Star carriers. Be forewarned however, as the online booking interface is bad and the phone agents are usually clueless.
When does it make sense to purchase miles?
1. You are redeeming for an international Business or First Class ticket and you are small number of miles short. Just go ahead and buy them.
2. You consider buying award miles as an alternate option to really purchasing international Business and First Class seats at a discount. Also, one thing to note is that awards are usually cancelable and thus closer to flexible than restricted tickets.
3. You are based in a hub that is not competitive (e.g. NRT) or tend to depart from an otherwise expensive destination (e.g. Australia).
4. You don’t have other access to airlines miles i.e. opening credit cards and taking part of numerous promotions that airlines and sometimes hotels offer.
When does it not make sense to purchase miles?
1. Programs that charge very high fuel surcharges (YQ’s) on award tickets like British Airways Avios or Air Canada Aeroplan. It sometimes can make sense too, but you have to be very careful.
2. Programs that have dynamic pricing for awards like JetBlue. Why would you pay 2 cents for a point when the value is capped at 1.5 cents? This is just an example – the values are off the top of my head, but you get the idea.
3. In markets, where there is a lot of competition. Some markets have very competitive pricing in Business Class as well. Obviously, those may be better left for paid tickets.
Don’t overestimate the value of a mile
Normally, I just laugh to myself when I see someone mentioning that they used miles for an itinerary that would have otherwise cost $30K. The value of the mile is entirely subjective, how much you would be willing to pay for the ticketed cabin in hard cash. Obviously, some would be willing to pay a lot more than others and thus the value of a mile varies a lot between individuals.
Example: Buying US Airways Dividend Miles and using them for Business Class award trips between Europe and Asia
I was having a drink at the Bamboo Chic bar at the Le Meridien in Bangkok on New Years Eve and spoke to a Swiss couple that always buy US Airways Dividend Miles that they then use for their holiday trips in Business Class.
The Business Class return award costs 90K US Airways Dividend Miles from Europe to South Asia. Depending what US Airways miles sales you participated, you could have purchased these miles from $1K to $2K. This is still a lot less than a “paid” direct business class return flights from Zurich to Bangkok and back. Of course, there are some fees involved with US Airways award tickets, although no fuel surcharges.
Example: Buying United miles for award trips within Asia
My most recent one was from Bangkok to Jakarta and then from Bali to Shanghai (stopover) to Bangkok for 35K miles in Business Class and only actual taxes.
You can “buy” highly discounted Business and First Class tickets by taking advantage of the airline miles sales that seems to occur monthly.
First though, you really need to know what you are doing and what is your personal threshold for paying for Business and First Class seats.
There are airlines that cap the number of miles that you can purchase per year. You can always open accounts for all your family members and maybe get some trusted friends involved as well to get around this limitation.