Planning on buying miles with 50% bonus. Worrying about miles depreciation.
Hi folks,
I am planning on buying 60k miles from AA to get 30k bonus miles, which ends up about 2cpm. I only use miles for international upgrades and redeem, so the 2 cpm is good for me. The problem is, I don't plan on flying international till late 2013 or early 2014. I've heard things about AA's bankruptcy might depreciate their miles. Should I still buy those miles now? Please share your opinions. Thanks
Are you anticipating that someone here will know the answer to your question, or that anything you get here will make this decision more definitive? If so, you will be sorely disappointed.
Some will say that there will be depreciation, and propose a timeline. Some will say that things won't change much (and cite examples from other airlines). Some will say that there already has been depreciation having nothing to do with bankruptcy and that this will continue. Finally, some will say that it has become harder and harder to use the miles and that this reflects an effective depreciation that will only get worse.
If you're not going to use the miles for a year or more, why not wait for the next "sale" on miles? It's not like this is the first time when the purchase of AA miles was accompanied by a bonus, and I'm confident it won't be the last.
Are you anticipating that someone here will know the answer to your question, or that anything you get here will make this decision more definitive? If so, you will be sorely disappointed.
Some will say that there will be depreciation, and propose a timeline. Some will say that things won't change much (and cite examples from other airlines). Some will say that there already has been depreciation having nothing to do with bankruptcy and that this will continue. Finally, some will say that it has become harder and harder to use the miles and that this reflects an effective depreciation that will only get worse.
I think that about covers it
Cheers.
Thanks! I'm expecting people to give some of their own opinions, so I can then make a decision based on those, not just giving me an answer. I'm only doing this because I don't have much experience in this area (I'm still in college), and I believe a lot of FTers are way more experienced than I am. I do get your point and will keep it in mind though.
If you're not going to use the miles for a year or more, why not wait for the next "sale" on miles? It's not like this is the first time when the purchase of AA miles was accompanied by a bonus, and I'm confident it won't be the last.
I was thinking about this too. There are mainly two reasons for me to buy this one:
1) I just got 3 new CCs with minimum spending requirements. If I bought it now instead of next year, it will be easier for me to complete those requirements (no VRs available for me nearby at all ).
2) there is a purchase limit on miles each year. International redemption costs 110k and 13k on biz and first class, and I will be buying tickets for both me and my girlfriend. So I might need to buy miles again next year in order to have enough.
Good points on the credit card min spend and the annual purchase limits.
Hope you got large credit card bonus miles; a couple years back, I replaced my citi cards with three new ones at 75k bonus miles each (with small min spend requirements). With 225k "free" miles, the last thing on my mind was buying more redeemable miles at two cents each.
As to a merger-caused devaluation: Over time, it's probably a given that miles will suffer devaluation, but even if US and AA combine, changes are unlikely to happen right away.
Programs: Various bits of plastic with names of noble metals on them
Posts: 7,797
So, you want to take your girlfriend to Bali or (insert idyllic location here)?
My feeling is that buying AA miles at 2 CPM for vague plans that aren't definite is too much given that US regularly beats this (anywhere from 1.8 CPM to 1.1 CPM in the past year), and that one of your proposed uses (international upgrades) would mean a $700 r/t copay ON TOP OF 50,000 miles- so $1300 (plus any luxury taxes from going out of Y to J).
Adding $1300 to a coach fare usually gets you in the ballpark of discounted business class (which often gives back additional status miles/redeemable miles on bonus). So this isn't a good use of miles as far as I can see.
Also, there's a problem of needing two seats which you can't book right away, apparently- so what happens if the inventory disappears and you've invested cash for miles? You also don't have a location specified (award charts change over time).
So I'd say buying miles at 2 cents per mile for some nebulous, ill-defined goal without dates and concrete ability to do the award as soon as the miles hit your account? Not a great idea. You're better off with the cash.
Adding $1300 to a coach fare usually gets you in the ballpark of discounted business class (which often gives back additional status miles/redeemable miles on bonus). So this isn't a good use of miles as far as I can see.
Agree with your points, but you may want to check the math. I get $1,700, not $1,300, as the round-trip upgrade cost at two cents per mile.
So, you want to take your girlfriend to Bali or (insert idyllic location here)?
My feeling is that buying AA miles at 2 CPM for vague plans that aren't definite is too much given that US regularly beats this (anywhere from 1.8 CPM to 1.1 CPM in the past year), and that one of your proposed uses (international upgrades) would mean a $700 r/t copay ON TOP OF 50,000 miles- so $1300 (plus any luxury taxes from going out of Y to J).
Adding $1300 to a coach fare usually gets you in the ballpark of discounted business class (which often gives back additional status miles/redeemable miles on bonus). So this isn't a good use of miles as far as I can see.
Also, there's a problem of needing two seats which you can't book right away, apparently- so what happens if the inventory disappears and you've invested cash for miles? You also don't have a location specified (award charts change over time).
So I'd say buying miles at 2 cents per mile for some nebulous, ill-defined goal without dates and concrete ability to do the award as soon as the miles hit your account? Not a great idea. You're better off with the cash.
Thanks for your response! You have an excellent point.
Im bringing her to China, my hometown, so probably to PVG. I did the upgrade once, and the business class was probably only 30% occupied, so I'm assuming the availability is not an issue (I know one sample case doesn't really mean anything).
I've never purchased business class directly, but I did a search on Priceline for business class for dec 2013. It costs around $4500 each, with Econ class costs $1500. So basically I'm using $700 + 50000 miles to get $3000, which is more than 4 cpm. So I should be easily getting 3cpm in most cases I assume.
Yeah I definitely see that US miles are cheaper, but since the merge is not certain, I probably should stick with AA for now right? I almost always fly AA so 90% of my miles are here, plus two citi 50k miles cards I just received.
Please let me know if any of my analysis needs correction. Thanks!
Good points on the credit card min spend and the annual purchase limits.
Hope you got large credit card bonus miles; a couple years back, I replaced my citi cards with three new ones at 75k bonus miles each (with small min spend requirements). With 225k "free" miles, the last thing on my mind was buying more redeemable miles at two cents each.
As to a merger-caused devaluation: Over time, it's probably a given that miles will suffer devaluation, but even if US and AA combine, changes are unlikely to happen right away.
I missed the 75k , but I got two 50k ones. Not bad for now I guess .
If the merger does happen, AAdvantage program and my miles should be intact before my trip I guess (hope).
An award ticket in business is cheaper (by far) than upgrading a purchased econ ticket with purchased miles.
If econ is $1,500 and the upgrade costs $1,700, then your total cost per ticket is $3,200 round-trip.
An award ticket for 110k miles would cost $2,200 plus nominal taxes and fees, for savings of $900 to $1,000 per ticket.
You are right! I didn't notice that! Not to say the ticket is usually 4000+ is purchased directly, which is easily 4 cpm . This requires me to pile up a lot of miles tho.
What's the best way you know to search for cheap business/first fares? Priceline, aa.com, or ?
Programs: Various bits of plastic with names of noble metals on them
Posts: 7,797
Quote:
Originally Posted by FWAAA
Agree with your points, but you may want to check the math. I get $1,700, not $1,300, as the round-trip upgrade cost at two cents per mile.
Even worse, then.
Quote:
Originally Posted by kevinwangjk
You are right! I didn't notice that! Not to say the ticket is usually 4000+ is purchased directly, which is easily 4 cpm . This requires me to pile up a lot of miles tho.
What's the best way you know to search for cheap business/first fares? Priceline, aa.com, or ?
I am planning on buying 60k miles from AA to get 30k bonus miles, which ends up about 2cpm. I only use miles for international upgrades and redeem, so the 2 cpm is good for me. The problem is, I don't plan on flying international till late 2013 or early 2014. I've heard things about AA's bankruptcy might depreciate their miles. Should I still buy those miles now? Please share your opinions. Thanks
The current AAdvantage miles purchase offer seems to be quite good. I'm sure there are others who say they did better in the past, but it is hard to know about the future. If using miles for business class redemption to Asia, buy the miles, take the bonus, and be at peace with it. If there is a flight available you want for redemption, it is a good deal.
Here in FT it is just speculation what, if, or when any miles devaluation will occur. There are so many ways for devaluation to occur. One method, not annectodal, is the purchase price for base miles. Once the base miles were available for Aadvantage at $.025 per mile. Now the price is $.0275 per mile. Delta sells Skymiles base miles now at $.035. Delta has mastered the art of devaluation. It is tough to determine if AA will raise the price soon on miles purchases to match other airlines like Delta.
).
