With ticket sales stalled and fares depressed, the airlines have left few stones unturned in their desperate quest to upgrade their bottom lines.
One way they’ve chosen to augment revenues is with the sale of frequent flyer miles, a highly profitable side business.
Normally, buying miles is a bad deal, financially sensible only when purchasing small quantities to reach an award threshold. But [% 3417880 | | US Airways’ %] 100 percent bonus on miles purchased from the airline was enough to fundamentally change the value proposition, in the process setting a new standard for promoting the sale of frequent flyer miles.
American’s latest bonus for purchased miles isn’t as compelling as US Airways’ promotion, but it’s worth considering.
Through August 31, AAdvantage members who purchase 6,000 or more American miles may choose as a bonus either 35 percent more miles or a 10 percent discount on a future American trip purchased on AA.com.
Adding 35 percent to the miles purchased isn’t enough to transform a bad deal into a good one. But a 10 percent discount on a ticket is another matter.
The discount is good for one reservation, including as many as six people, for travel between September 15 and December 15. So, assuming you just purchased the minimum 6,000 miles, you’re buying the 10 percent discount for $180 (2.5 cents per mile, plus a $30 processing fee). Breakeven—the point at which the discount is covered and the purchased miles are effectively free—would be reached when buying one $1,800 ticket. Or six $300 tickets in the same booking. Or four $450 tickets.
With current ticket prices averaging just over $300, that’s a high hurdle for most travelers. But for those buying a first-class ticket, or a family traveling together to Europe, buying miles to receive a discount could make good financial sense.
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