A Good Deal on Buying American Airline Miles

To my fellow travelers:

Don't feel obliged to read the nerdy, long airline frequent flyer notes below.  But you might find it interesting if you fly a lot.

American Airlines is selling miles in what seems like a pretty good deal.  The best deal is 160,000 miles for $2950.  Another good deal is 110,000 for $2065.  Both come out below 2 cents per mile.

The website where you can buy these miles and bonus miles is (deadline April 30, 2015):

https://buymiles.aa.com/en/buygift?c=SOLO_EML_EN,US_BUY


Some background:

A couple of years ago, my travel agent recommended that I buy American miles that were on sale (80K miles for $1800).  I bought some but was always a bit confused why these would be a good deal.  I kept pestering my agent, and he said that buying those miles would be a good deal in some cases, not such a great deal in some cases.

I've only recently started using my United miles for award travel (eg buying a ticket outright using only miles).  I've always hoarded miles and already had a lot of them.  I'd usually try to use my miles to upgrade to biz class (buy a coach ticket and use the miles to upgrade).  That way I'd pay for a coach ticket and get the FF miles for flying along with the elite miles towards elite status.  In years past, this was a good deal.  I'd travel from SFO to New York for $300 in biz class, using perhaps 20K miles to upgrade the $300 coach ticket (both legs) to biz class.  Using miles to simply purchase an award ticket seemed wasteful.

In the past years, the rules have changed.  United now charges a cash fee along with miles if you manage to get an upgradeable coach ticket.  For example, I booked a flight to Shanghai in the fall, and the coach ticket cost something like $1200.  I would have had to use something like 50K miles each way to upgrade, and pay something like $600 each way.  When I totaled up all the costs, the resulting upgraded ticket cost almost the same as paying cash for a biz class seat (I estimated miles to cost about two cents per mile).  United has basically taken away any discount in upgrading using miles.  You pay the equivalent in miles and cash.

This year I found that it was difficult to find a decent coach fare back from Ft. Lauderdale (FLL) in February.  I looked into buying a United ticket using miles, and their website was surprisingly easy to use and book award travel with.  I booked an award ticket in biz class that was not a bad deal (about the equivalent of $700), considering the one way coach ticket cost $650.  I got back to FLL early and was able to cancel the existing award ticket with no fee and replace it with a last-minute Saver award ticket that was equivalent to paying $250 or so.  I was pretty happy about the whole thing -- being able to cancel an existing flight with little to no cancellation or change fee and booking a last-minute new flight at a reasonable price -- and actually felt that being an elite member with United had paid off.

It's a big game, but I think that if you can buy miles at less than $0.02 per mile, it's a decent deal.  If you buy the maximum miles in the AA deal being offered now, the miles cost as low as I've seen since my travel agent alerted me of the possibilities in 2011.  The miles are about 1.84 cents per mile.