What are AA miles worth?
 

I’m deciding between two different credit cards that offer welcome bonuses for American Airlines. There is a difference in the amount of miles offered for the welcome bonus and the annual fee. I realize that the value can change due to many variables, however, is there a general rule of thumb to apply such as $1 ticket price for every 1,000 miles/points?

My personal guideline is 1.5 cents per mile. YMMV.

"Cents per mile" is the common term, and there are websites with general guides for estimating their worth on various programs.

From personal experience I'd say ~1.5 is typical for domestic main cabin. I've seen down around ~1.0 for main cabin to the Caribbean, but I wouldn't redeem at that rate. I've had a few this year at ~2.0. I've got a trip booked business class to/from London at ~4.0.

The best value are partner premium cabin awards. I just got 2 biz tickets on Qatar from JNB-BCN connecting in DOH for 110,000 miles (55,000 for each person) plus a total of $131.80 in fees. Amazing deal for a high-quality trip on one of the best airlines in the world from Southern Africa to the EU.

I am good with this. Today it is definitely less than the $0.02 mark of yore. I can sometimes get better value through usage on upgrade awards but for comparative purposes $0.015 is a good benchmark.

While I think that 1.5 cpm is a good ballpark estimate, occasionally one can find outsized redemption values with AA miles. Here's an example:

https://cimg6.ibsrv.net/gimg/www.fly...5d9340c924.png
https://cimg8.ibsrv.net/gimg/www.fly...4043bbdc0c.png

+1. Snagging an elusive JL F seat leads to an incredibly high valuation of AA miles… but is it a valid valuation considering I would never pay $10k+ for a one-way ticket?

Maybe so, but ​​​​​​if you needed to take a one-way, long-haul flight in a premium cabin (say, before or after the Vancouver-Yokohama re-positioning cruise I took a few years ago), what would you do if you did not have miles?

I’ve paid $ for J on AA, CX, JL…. But would never pay $ for F. My point being that I assign an incredibly high value to AA miles - I’ve used them for 6 JL F legs and 2 J legs all in the last 30 months. But is that a realistic valuation? I don’t know. For me it is; for others, perhaps not.

Or just pick the credit card with the highest number of bonus miles... 75,000 miles is worth more than 50,000 miles, regardless of the value of 1 mile.

The bonus isn't the best long term determination of the value of the credit card. As noted, the annual fee is a factor. The card with the $695 annual fee could be the bargain card.

of course it is, because you are still getting the F product. it doesnt matter if you would have paid in cash for that F seat, thats a different calculation entirely. There is no reason why money saved booking with miles has to equal value of an award ticket in cpm.... And even in your case, you wont use cash to buy in F, but you will use points - that can save you cash for J seats. so you WILL pay for F seats. it's just that AA miles are being used as a substitute for cash. You could book only J seats and spend less miles, and get more J seats in the long run.

and to answer the OP, I used to regularly find award fares valued at 4-5 cents per mile with ease.

I agree with you. But many FT’s use the “I’d never pay cash for it” argument to imply it is not a reasonable valuation.

18.75 cents per mile. That's my target, which I've achieved multiple times.

True, but if I had an AA mile for every time I've seen "omg as miles are worthless" here on ft id never have to buy airfare ever again.

That’s because it’s not. Say AA had a cash fare of $1 million to fly F from CLT to DFW, but I could get it on points for “only” 100,000 points. What is the “value” of the points? Hint: it is not $10 per point.