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Multiply Your American Miles? Or Hide Your Wallet?

Taking a page from the playbooks of United (Mileage Plus Award Accelerator) and US Airways (Dividend Miles Multiplier), American is now offering AAdvantage members the opportunity to purchase extra miles when flying on American.

As always with such offers, the question comes down to price: how much those extra miles cost, and how much they're worth.

Offer Details

With American's new Mileage Multiplier, AAdvantage members can choose to purchase double or triple the base miles normally earned for any American, American Eagle, or AmericanConnection flight for about 3 cents each, plus a 7.5 percent federal excise tax.

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The bonus miles must be purchased within 24 hours of the member's flight, either at an airport self-service check-in machine or when checking in online at AA.com.

Taking an example from American's press release, AAdvantage members normally earn 1,121 base miles for flights between Dallas and Miami. With Mileage Multiplier, travelers could pay $34 to earn an extra 1,121 miles for that flight, or $68 to earn an extra 2,242 miles.

Mileage Multiplier purchases are non-refundable.

Deal or No Deal

There are several ways to evaluate Mileage Multiplier.

First, in relative terms, is it competitive with the Award Accelerator offered by United, an airline that American competes head-to-head with?

While the prices hover around 3 cents per mile in both cases, United includes the 7.5 percent federal excise tax in its rates while American does not. So American's final price will be 7.5 percent higher than United's. Is an American mile worth 7.5 percent more than a United mile?

Then there's the question of absolute value: Are AAdvantage miles worth 3 cents apiece? Savvy travelers are certainly capable of recouping that and more, by redeeming their miles for expensive flights and upgrades. But by my calculations, the average value of a frequent flyer mile is around 1.2 cents. So unless buyers make a concerted effort to get outsized value for their miles, they're overpaying at 3 cents each.

It's also worth pondering the underlying logic of Mileage Multiplier. Isn't the basic premise that actual flyers should be able to purchase miles at a better rate than non-flyers? Otherwise, what's the point?

But American already sells miles through buyAAmiles, for between 2 cents and 2.75 cents apiece, plus a $30 service charge. That means that, except when purchasing small lots of miles, where the service fee raises the per-mile cost above 3 cents, it's cheaper to purchase miles through buyAAmiles than through Mileage Multiplier.

American's news release notes that the 3-cents-per-mile price is an "introductory cost." That's usually a signal that prices will eventually rise. And that would make a bad deal even worse.

Bottom line: Mileage Multiplier is a Profit Multiplier for American, and a Dicey Deal for consumers.

Reader Reality Check

What's a frequent flyer mile worth to you?

Are there any circumstances under which you'd buy miles at 3 cents each?

Read comments or add your own insight!
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