Recently, about once a week, I receive an email from American Airlines to buy AAdvantage award miles. Each email typically touts some incredible limited time bonus, but in reality these bonuses have become the norm. While I don’t pay much attention to the “limited time” bonuses anymore, I often find myself wondering if actually it makes sense to purchase AAdvantage award miles. At face value my answer is no. I personally don’t see value in buy AAdvantage award miles, but that doesn’t mean it doesn’t make sense for others.
Buying AAdvantage Award Miles With A Bonus (Math Heavy)
For starters, let’s first look into how expensive AAdvantage award miles are. After visiting the American Airlines buy miles page and logging into my account, I found the following chart.
American Airlines awards a bonus on purchased miles which varies based on the number of miles purchase. If you purchase more miles you receive a larger bonus.
With the current promotion, American is selling AAdvantage miles at a rate of $0.0295 each. So the cost of 1,000 AAdvantage miles (the lowest number you can purchase) is $29.50. The cost of 10,000 miles is $295.00 etc. etc.
The bonuses however make buying AAdvantage miles more appealing. For example, when you buy 10,000 miles American awards a bonus of 3,000. In reality you’re purchasing 13,000 miles for $295 or buying miles at a rate of $0.0227/mile.
Since American structures the bonus this way, buying 150,000 miles the overall most appealing deal. The out-of-pocket cost of buying 150,000 miles is $4,425. That is consistent with the $0.0295/mile rate. However, you’re receiving 270,000 miles which means you’re actually purchasing miles at a rate of $0.0164/mile.
When Does It Make Sense To Buy AAdvantage Miles?
Choosing to buy AAdvantage miles ultimately comes down to personal preference, but there are definitely situations where it makes total sense.
For example, let’s say you want to take a trip from the US to Australia in business class. The lowest fare on a OneWorld carrier that I could find today is $4,845! By comparison, an award ticket only costs 160,000 AAdvantage miles and ~$120.00 to buy a round-trip business class award ticket.
Essentially, in this scenario you’re getting $0.0.295/mile ([$4,845 – $120] / 160,000). In this instance you’re getting more value from your miles than what you paid for them.
Overall I’d say in a situation like this it makes sense to buy AAdvantage award miles. In fact, any time you’re getting more value from the miles than they cost, it’s a good deal.
However, keep in mind, award availability isn’t always a given. So I’d never recommend speculatively buying miles. Instead, I can only recommend you buy miles if and when you have a specific redemption opportunity in mind.
But Wait, There Are Other Factors!
One of the reason I don’t recommend buying miles is that flights paid with AAdvantage miles don’t earn Elite Qualifying Dollars or Miles. If you’re chasing status it may not make sense to pay with flights with award miles. In fact, if you’re chasing elite status is may make sense to pay for the flight yourself.
Let’s circle back to the US to Australia example. The flight from Los Angeles to Sydney is just under 15,000 miles round trip and again costs $4,845. With AAdvantage Executive Platinum elite status, I’ll earn the following:
For $4,845 I’ll earn just over 25% of my annual EQD requirement, not great, but not awful. I’ll again earn just more than 25% of my annual EQM requirement. Lastly, I’ll earn 51,568 AAdvantage award miles. Since I assign a value of $0.015/mile for AAdvantage miles, I’m essentially receiving a $773.53 rebate for my $4,845 flight. While that’s not a huge amount of value back, it still reduces my total cost.
Would I Ever Buy AAdvantage Award Miles?
While I’ll never say never, I will say the chances of me buying AAdvantage miles are slim. Unless I find myself just shy of a particular redemption, I just don’t see it happening. The reason is simple. I have way too much fun flying. I enjoy taking trips to nowhere to earn miles. It’s a lot of fun earning my AAdvantage miles the old-fashioned way.
Also, I enjoy earning elite status and get a lot of value from it. The only time I’m willing to book AAdvantage awards is if the redemption opportunity is too good to pass up (Qantas First Saver) or if I’ve already solidified my elite status for the qualifying year. Otherwise, I’d much rather spend my days, weeks, and hours searching for discounted business class seats on OneWorld carriers.
Whenever I see these promotional email from American to buy miles I instantly delete them without giving them much thought. Then the other day I started noticing some Qantas First Class award availability from Sydney back to the United States. Those flight had saver level award space and cost just 110,000 AAdvantage miles. Considering the flights retail for well over $9,000 you could easily get $0.08/mile of value from AAdvantage miles. At that rate it absolutely makes sense to buy AAdvantage miles for $0.0164 each.
Personally, if I was an infrequent traveling who wanted to take “one big trip” a year, I’d always begin that search by looking to purchase award miles. You can typically buy award miles for $0.02 to $0.04 each. That means if you do your homework and get a great deal on a saver level premium cabin flight you’ll easily get more value from your dollars than you would buying flights on your own. However, if you’re the type of person who value elite status, buying miles might not make sense for you.