on almost all of my recent AA flights, it was cheaper to buy miles than paying cash
Jan 13, 2018, 3:08 pm
#1
Original Poster
Join Date: Jan 2018
Programs: UA, LH, BA
Posts: 294
on almost all of my recent AA flights, it was cheaper to buy miles than paying cash
I don't fly on AA that much... during the last year, I only took 7 roundtrips... almost all of them were under 1500 miles and always with connection at ORD....
on 6 out of those 7 roundtrips, I purchased AA miles and booked the tickets using those miles...well.. because it was cheaper than paying for whatever the lowest fare was available on AA.com at time of purchase.... I usually book at least 6 week before the flights...
I'm just confused about the reason behind this.... any ideas? The only thing that I can come up with is that my origin or destination is always an airport that is *only* served by AA or one other carrier. Reason I'm asking is that I'm just bought another 25,000 miles and used them towards a similar roundtrip for next month. The cost of the miles is about $57.82 less than the lowest available fare on AA.com right now.... ($57 is still $57, right? that's enough for a nice lobster dinner for at least one)
on 6 out of those 7 roundtrips, I purchased AA miles and booked the tickets using those miles...well.. because it was cheaper than paying for whatever the lowest fare was available on AA.com at time of purchase.... I usually book at least 6 week before the flights...
I'm just confused about the reason behind this.... any ideas? The only thing that I can come up with is that my origin or destination is always an airport that is *only* served by AA or one other carrier. Reason I'm asking is that I'm just bought another 25,000 miles and used them towards a similar roundtrip for next month. The cost of the miles is about $57.82 less than the lowest available fare on AA.com right now.... ($57 is still $57, right? that's enough for a nice lobster dinner for at least one)
Last edited by geometry; Jan 13, 2018 at 3:17 pm
Jan 13, 2018, 5:59 pm
#2
FlyerTalk Evangelist
Join Date: Dec 2003
Location: Not here; there!
Programs: AA Lifetime Gold
Posts: 29,603
I can't answer the "Why?", but I do have a couple of observations:
1. I hope that you're only buying miles during one of AA's frequent mileage sales.
2. If you have a qualifying Citi or Barclays AA credit card, I hope that you always check the list of reduced-mileage-award destinations before you book your award ticket. It could make your trip even cheaper. (And if you don't already have a Citi or Barclays AA credit card, it probably makes sense for you to get one -- if you can.)
1. I hope that you're only buying miles during one of AA's frequent mileage sales.
2. If you have a qualifying Citi or Barclays AA credit card, I hope that you always check the list of reduced-mileage-award destinations before you book your award ticket. It could make your trip even cheaper. (And if you don't already have a Citi or Barclays AA credit card, it probably makes sense for you to get one -- if you can.)
Jan 13, 2018, 6:01 pm
#3
Join Date: Feb 1999
Location: San Jose, California, USA
Programs: AS 100K, UA MM, AA MM, IC Plat Amb, Marriott Gold, Hilton Gold, Hyatt Explorist
Posts: 3,146
From what I've read, AA continues US's practice of frequent mileage sales (at around 2 cents a mile, sometimes even less), so you can buy miles then immediately redeem them for a trip that you would have purchased with cash. You can even hold the award flights first, buy the miles, then ticket the award after the miles post!
As you've noted, this can happen on routes where AA has a monopoly and charges super-high prices just because it can, even if flights are never full. IMHO, it makes sense to buy miles for $500 when you'd otherwise spend $1,000. I can't usually take advantage of this because I would never spend $500 for a domestic coach flight and (in the past) I needed the RDM/EQM, anyway. But if those aren't concerns, then this strategy makes perfect sense.
As you've noted, this can happen on routes where AA has a monopoly and charges super-high prices just because it can, even if flights are never full. IMHO, it makes sense to buy miles for $500 when you'd otherwise spend $1,000. I can't usually take advantage of this because I would never spend $500 for a domestic coach flight and (in the past) I needed the RDM/EQM, anyway. But if those aren't concerns, then this strategy makes perfect sense.
Jan 13, 2018, 6:42 pm
#4
FlyerTalk Evangelist
Join Date: May 2001
Location: MSY; 2-time FT Fantasy Football Champ, now in recovery.
Programs: AA lifetime GLD; UA Silver; Marriott LTTE; IHG Plat,
Posts: 14,518
With the current bonus mile offer on buying miles, 25K costs $664, after including taxes and fees.
If you're saving $57 over a cash ticket, that price is $721. That $721 is probably around $600 + tax? If you just bought the ticket, that $600 fare would earn you (assuming no status) 3000 miles, while the award ticket earns nothing. And if you're regularly buying miles, those 3000 miles should be worth more than the $57 you saved.
That's not to say buying miles doesn't make sense sometimes, if the cash ticket were $1000, then the math is in your favor. But for a smaller savings like your example, you might be better off just buying the ticket.
If you're saving $57 over a cash ticket, that price is $721. That $721 is probably around $600 + tax? If you just bought the ticket, that $600 fare would earn you (assuming no status) 3000 miles, while the award ticket earns nothing. And if you're regularly buying miles, those 3000 miles should be worth more than the $57 you saved.
That's not to say buying miles doesn't make sense sometimes, if the cash ticket were $1000, then the math is in your favor. But for a smaller savings like your example, you might be better off just buying the ticket.
Jan 13, 2018, 7:56 pm
#5
Join Date: Aug 2013
Location: JFK/LGA
Posts: 21
I suppose it all depends on your route. Example:
JFK-GIG-JFK. $4248 in business.
115,000 miles + fees for a Business Saver award RT.
Current cost of 200,000 miles? $4425 + tax and fees.
Not something I will personally do, but I can see why someone will contemplate it.
JFK-GIG-JFK. $4248 in business.
115,000 miles + fees for a Business Saver award RT.
Current cost of 200,000 miles? $4425 + tax and fees.
Not something I will personally do, but I can see why someone will contemplate it.