When Two-for-One is Really Regular Price, and Why Is Everyone Else So Expensive?

US Airways is offering a targeted bonus of up to 100% additional miles when you buy miles through August 22.

The offer is targeted, then you go to the buy miles page you have to enter your account information to see whether you’re being offered a bonus. (And there may be other, smaller, bonuses targeted to some accounts.)

If the offer is available to you, buying miles at a 100% bonus means buying them at a cost of 1.88 cents per mile.

US Airways is almost always selling miles on the cheap, which is to say at a price higher than I’m willing to pay but much lower than the ‘retail’ price that almost never prevails.

    As far as I know, crazy as it sounds, the Federal Trade Commission never launched an investigation of US Airways Dividend Miles for deceptive marketing practices?

    They claim to be offering a 100% bonus — meaning getting twice as many points as ‘usual’ — but since they offer it pretty much all the time it is the usual.

Their 100% bonus on shared miles used to be one of the best deals out there. Even with a very large mileage balance with both US Airways and American AAdvantage I jump on buying miles at 1.1 cents apiece. Last month their transfer miles bonus got a bit more complicated and also more expensive.

Of course US Airways miles aren’t as cheap as they used to be or even as cheap as they used to be.

And you can’t get 90,000 mile Hong Kong awards in business class anymore. But now that those are 110,000 miles, you might as well go for first class which is just 120,000 miles roundtrip. Hard to argue first isn’t worth it, for just 5000 miles more each way.

Still, US Airways 100% bonus on purchased miles used to be a fantastic deal — when the miles were cheaper and the award chart was cheaper.

They run these offers all the time. (Sometimes structured a little too clever by half.)

And buying miles from US Airways is cheaper than buying the miles from American, even though US Airways miles should become American miles sometime next year.

It may be a strategically valuable play for some, but is not for me.

US Airways mileage purchases are processed by points.com which means they don’t show up as airfare, and thus don’t earn bonuses from credit cards like Chase Sapphire Preferred (double points) or American Express Premier Rewards Gold (triple points) that bonus airfare spend.

Riddle me this: Why does US Airways continue selling miles for less than 1.9 cents, when American won’t drop down that low? And when United won’t come close, either. Why is it that so few programs are willing to match US Airways’ pricing on miles? And yet they’ve been doing this for years, it’s not as though it’s a one-time test, it’s clearly part of the program’s strategy. Curious.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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  1. What I’ve never understood is why Aeroplan has never had points sales. Do all these other airlines need money quickly where as Aeroplan is much more profitable year after year?

  2. Speaking of deals-that-aren’t, can anyone explain to me the “companion travel certificate” the United gives me with my credit card?

    The fare requirements are U or higher, Saturday night stay, 14-day advance purchase. 14 days out I have never seen availability on a domestic route restricted to U or higher! In nearly every scenario I’ve looked at, it’s more expensive to use the certificate on a U fare than to buy two of the cheapest available fare.

    Who do they think they’re fooling?

  3. Long time reader, first time commenter –

    I have been a regular USAirways flyer, living in DC for the last 17 years and increasingly I’ve found it much harder to find 25k trips on USAirways over the last year or so. I understand certain weekends being a bit more expensive, but every weekend it seems, regardless of destination, you’re looking at spending a minimum of 40k roundtrip. I feel like the 25k coach trip is going the way of the dinosaur (and I recognize that maybe I’m late to that realization).

    So while USAirways miles may be cheaper to buy, you end up spending a lot more of them to get what you want. And when you do find the coveted 25k trip, there’s one flight out of 10 available (usually at crack of dawn or late despite the multiple routing options available). At least that has been my recent experience.

  4. US Airways management has always seemed like shrewd businessmen, better at making a buck than their competitors (remember, this is the management team at America West that through hard work turned their dismal post-9/11 position into the largest airline in the world). These are also the only guys in the industry who haven’t enriched Wall Street by buying overpriced oil futures contracts.

    So while I’ve never seen a financial discussion of the value of selling miles, my guess is they’ve determined that it’s profitable to do so. And that others haven’t yet figured out their strategy.

  5. there are people taking advantage if this kind of promotion. So don’t try to stir water.

  6. why USAirways pushing so much mile sales, one after another, are they going to pull the rug underneath us at un predictable time ?

  7. Gary and others- Why does US Air collect a 7.5% gov’t tax for shared miles promo? Delta does not. The feds DO NOT collect a tax for shared/transferred miles.

  8. I always assumed US’ cheap miles promos had something to do with the fact that Barclays has a relatively small retail presence in the US. While selling miles in itself isn’t directly tied to Barclays, we know that FFPs are tightly integrated with the card issuers and the relationships are quite strong. I can easily imagine some sort of reciprocal relationship where they two want to push more transactions through, to encourage card spend, which in turn generates more miles, which in turn engenders more transactions, etc. Selling miles is a relatively easy way to help this along.

  9. Gary- Thanks for looking into that. Its a question that all of us who have done the US Air shared miles promos should be asking.

  10. civet- An overwhelming majority of people who buy miles from US Air are not doing so with a Barclay’s card. If Barclays wants to encourage more spend it would simply have some sort of spending bonus for its card. In fact I think they have one now.

  11. yes. selling miles ‘cheap’ seems to be USAirways’ practice. not sure if it’s barclays related as civet5 mentioned or most of USAirways FFlyers are redeeming miles for USAir flights (and they need to fill seats). they certainly didn’t change price of miles much when they switched alliance from Star to OneWorld.

  12. the only thing that we can assume is that selling miles at these cheap rates is still profitable to US in some way. This likely means that we are not the majority of buyers (it would be blatantly obvious that only a few buy most of them and disproportionately redeem them). The fact they continue to sell miles and haven’t changed most of their award chart tells me that its nto those of us gaming the system, and that its likely the run-of-the-mill retail market redeeming for domestic service. Beyond that its pure speculation

  13. You do realize that only a percentage of the sold miles are ever actually used. The company gets cash today for miles that may never be used or be useded months or years from now. Good cash flow and good profit if not used by the smart traveler

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