American Airlines has put its award miles on sale again, offering a combination of tiered bonus miles and a flat discount on the final cost. Anyone who buys a minimum of 20,000 miles will save 10%. In addition, you can earn between 7,000 and 30,000 bonus miles on top of the miles you do buy. This offer is good through November 13, 2015.
- Buy 20,000 – 39,000 miles and get 7,000 bonus miles
- Buy 40,000 – 59,000 miles and get 13,000 bonus miles
- Buy 60,000 – 79,000 miles and get 20,000 bonus miles
- Buy 80,000 – 99,000 miles and get 30,000 bonus miles
- Buy 100,000 – 125,000 miles and get 35,000 bonus miles
Despite the larger absolute bonus at the top tier, you actually get the largest percent bonus when you buy fewer miles. Whenever trying to interpret the value of tiered offers, remember to work on the margins. You get the same number of miles whether you buy 100,000 or 125,000 miles, so unless you actually need more, you should aim for the lower threshold — it will earn a larger percentage than the higher threshold.
In this case, you also have to factor in the 10% discount to calculate the final price per mile. I’ve done all this below:
|Buy Miles||Bonus Miles||Bonus Amount||Cost (with Discount)||Cost per Mile|
As you can see, the best price is when you purchase just 80,000 miles for a total of 110,000, paying $2,313 (all the prices I provided include a mandatory 7.5% tax and $30 processing fee). This is a good price, and many people would buy miles from other carriers at that level. However, it’s not the best deal American has offered this year. Many previous sales were closer to just 2.0 cents per mile.
What could you do with roughly 110,000 miles? Let’s assume you already have a few in your account and we can go over a small amount. From the contiguous 48 states, you can go to:
- Round-trip to Europe for 100,000 miles in business / 125,000 miles in first.
- Round-trip to Japan, Korea, or Mongolia for 100,000 miles in business / 125,000 miles in first.
- Round-trip to the rest of Asia for 110,000 miles in business / 135,000 miles in first.
- One-way to the Middle East or India for 67,500 miles in business / 90,000 miles in first.
I normally recommend buying miles only if you have a specific redemption in mind. The cost can be much less than buying a comparable business or first class ticket. You just need to be able to use the miles and find award space to your destination. (Check out my guidance on American Airlines award routing rules.)