Are Those AAdvantage Miles Buys EVER a True "Bargain?"
 

Yes, I know this is a totally subjective subject, or is it? If my partner and I each buy 150,000 FF miles we'll end up with about 2 million of them to waste. The "price" right now looks to be between1 and 2 cents per but isn't that what they are supposedly "worth" anyway?

I know AA is trying to raise cash and God knows what will happen to the miles should anything like bankruptcy protection arise. Perhaps this is an absurd question to raise but since I'm sitting here and not flying anyway... Thanks for any constructive input which increases our overall estimation of you as a person

Will defer to the true experts here but I for one think that if you can use them for international first class on OW airlines (eg JAL) you'd actually get far more than 1-2 cents per mile value. E.G. if JAL First class was $12k and it costs 160k miles that's 7.5 cents per mile. Of course, it's not always easy to find that available (and if you've already got 1.7M miles you certainly could do that many times already).

Just my thought process... :)

The value you put on miles depends on your own flying/spending patterns -- it will be higher the more difficult it is for you to earn miles and the easier it is to use them. The typical valuation is below the cost of buying. Certainly the average redemption value over all customers (including spoilage) is below whatever price AA offers or they wouldn't be offering it (unless they were in a desperate liquidity crunch but they don't seem to be to that point yet).

Buying miles could make sense if you have an actual need for travel where award availability exists, you will pay less than the corresponding cash fare, and you don't have better options (such as credit card bonuses) for earning the miles.

Whether they are worth it comes down to your flying patterns and what you would purchase if not using miles. There are lots of cases where miles purchased can work out cheaper than buying a ticket . At the current discount rate ( assuming you could buy 170k ) it would work out at $3000 for business class r/t London to Sydney ( plus taxes ) which is approximately GBP2400. to purchase a r/t ticket on QR on a random date in R class is GBP3,253 plus taxes , so using miles would be a cheaper option

I agree with what already was said, I would buy Only if 1- I had an immediate use for them and 2- there was a nice savings to be had. FWIW I wouldnt do it if my destination was at present shut to Me for entry or if I though theyd get hit with C-19. It would to for use very near term. But if Y is cheap rev wise and the flights have been going out pretty empty then I would buy any miles and enjoy an empty Y cabin instead, couild be to Asia Id buy the miles for F or C

IMHO - with 99% certainty, airline miles are never worthy to purchase.

Miles do not have values until you use it. Given the gradual trend of mile devaluation, unless you uses the purchased miles soon after purchase (i.e. 1%), it is certain that your miles lose value between the purchase and usage.

That's why IMHO mile purchase should be used when you are only short of miles for redemption, but not when it appears to be cheap.

99%, eh? Seems like a ludicrous proposition.

I’ve purchased miles dozens of times. Rarely are they held for a very long time. I think the longest was likely US Air which became AA miles later on. Most miles are redeemed within 3-12 months. I currently hold about $10k in purchased miles. Some, like Lifemiles can be riskier because of their shorter validity, and parent companies financial condition.

Since I mostly redeem for biz and F tickets, I feel I get a good return. Unless transpac revenue flights come down, it’s still a much cheaper way to fly.

AA miles aren’t bad to hold, although I don’t use them like I used to. Their F transpac awards on JL/CX used to be very nice before they increased the rates.

I wouldn't give much value to anyone who uses a term of "never" when it comes to a variable scenario like miles purchase. Let us say you want to start a RTW ticket from South Africa or Sri Lanka and can buy miles for 1.5 cents per mile for a repositioning flight from the U.S. to that destination. For $1,125 you can fly business on Qatar in the Q suites. Not a bad deal and certainly worthy of consideration to purchase.

AA has done multiple hidden devaluations that hardened flyertalk members call enhancements. The most frustrating prior to covid 19 was trying to get a First Class cabin domestic flight in USA to connect to a over the water biz or First class flight over the water. AA made it very difficult or impossible or crazy connection times. SO I ABSOLUTELY WOULD NOT BUY MILES!

You are the 1% I mentioned.

I would not give any value to someone who does not contribute constructively.

We have had some members who were some miles short for aspirational awards they’d found. Putting them on hold for five days and buying miles can solve this kind of dilemma.

Thank you VERY much to all who responded. I appreciate your time and experience.

I can see cases where it makes sense (you don't sufficient miles and there's an aspirational trip you have confirmed availability). But if you are already sitting on close to 1 million miles, this seems highly speculative and there are probably better uses for your cash. You are effectively floating AA a long-term loan with no real idea of when you will be able to collect or how much that purchase could potentially devalue. See "opportunity cost of capital".

Agreed. If you find good value award space (price, routing, dates, etc.) and are some miles short... then buying the miles to complete your booking is not a bad idea! I did it myself for 2 sAAver J's to Ireland on AA metal, avoiding the pesky fuel surcharges. Was a great deal on the ticket, so I bought enough miles to cover the total transaction.

Buying the miles on a speculative basis of: "Well it is a 'good deal' right now, and I have intentions of using them in the next 24 months, so I will stock up and be prepared when the trip I want to take comes around".... not so much of a winning game plan. Since you can buy miles on the spot to "top off" your account when booking an award ticket, there is no benefit of pre-buying. The miles don't accrue interest, unlike the money that you would have tied up in said miles for X number of months.

Devaluations are always an issue to worry about when you have a stockpile of miles with no immediate intention to use them. And, what is to say you spend $4k on buying as many miles as you can during one of their promotions, to then find a great cash fare that is a better value proposition. You're locked into using the miles now.

Now, if you have some sort of minimum spend to hit on a card that rewards airline purchases and you are a bit short with just organic spending - then sure, buying miles to hit the threshold is one way to reach your spend goal.

Like making up numbers and pretending they are facts?

99% certainty,

i.e. 1%

it is certain that your miles lose value between the purchase and usage.

Sounds like a president I know ...