All major airlines will happily sell you frequent flyer miles. But at prices hovering around 3 cents per mile, it has always been a better deal for the seller than it is for the buyer. Much better.
Periodic discounts improve the value proposition somewhat.
For example, American is currently offering a 500-mile bonus when consumers buy 2,000 AAdvantage miles, a 25 percent bonus, or 15,000 extra miles when 40,000 miles are purchased, a 37.5 percent bonus. The bonuses effectively decrease the price of buying the miles. But they’re still too expensive, except when purchased in small quantities, to top off an account that’s just short of an award threshold.
Last summer, US Airways went well beyond the incentives routinely available from other airlines and offered a 100 percent bonus on miles bought online. That reduced the cost of purchased miles by half. And at those prices, there was a compelling argument in favor of buying miles in quantity.
US Airways reprised that offer at the end of 2009, and is now doing so for a third time, for miles purchased over the next two months.
US Airways Dividend Miles members will receive a 100 percent bonus on miles purchased during February and March. The miles can be purchased for the member’s own account or as a gift for another Dividend Miles member. There’s a limit of 50,000 miles that may be bought, which would amount to 100,000 miles with the bonus.
Normally, US Airways miles are priced at 2.75 cents each, plus Federal Excise Tax. The effective discount makes purchasing miles for a free domestic ticket (25,000 miles for $343.75, not including tax) a decent deal, and purchasing enough for a business-class international ticket (100,000 miles for $1,375) a downright winner.
Indeed, savvy travelers are likely to take advantage of this offer specifically in order to redeem for business-class tickets to international destinations. So the discount on frequent flyer miles may be US Airways’ clever way of indirectly discounting premium tickets, without actually resorting to lowering its published fares.
Whatever US Airways’ intention, the effect is welcome, especially for those whose travel itineraries include business-class trips to Europe.
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