Should You Buy US Airways Miles With The Merger On Hold?

by on August 15, 2013 · 16 comments

in US Airways

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The short answer is:

YES, if you are planning to use them for a US Airways/Star Alliance award, but NO if you are banking on them being combined with your American miles anytime soon.

Back in July, US Airways launched a targeted 100% buy miles bonus and then opened it up to everyone for the month of August. The promo is still live and running until August 31, 2013, but now that the Department of Justice has announced a lawsuit that has thrown the US Airways/American Airlines merger into doubt, many readers have been asking whether buying miles – even at half price – is worth it. Note: to get the bonus your Dividend Miles account needs to be open for at least 12 days, so if you don’t have one sign-up now for free.

US Airways buy miles bonusAs a reminder, you can buy up to 50,000 miles for a total of 100,000 with the bonus. Miles usually cost 3.5 cents each plus a 7.5% tax and a $30 per-transaction processing fee, so with this promo, you could get miles for as low as 1.88 cents each if you bought the maximum. For 90,000 miles you can get a roundtrip business class trip to North Asia, and for 110,000 miles you can get a roundtrip business class ticket to South Africa, which is what I recently did or the South Pacific including Australia and New Zealand. Spending under $2,000 for an $8,000+ flight is a pretty great deal. Economy redemptions are generally not as good an idea, but US Airways does have some flexible routing options which might make it worth it for you.

With the DOJ bringing suit, this merger might be further off than originally thought.

A delay or halt of the merger could changes things in the future for US Airways and American frequent flyers.

While this new merger news hasn’t changed any of that right this very moment, it could mean a few things for those looking ahead.

First, US Airways announced it would be leaving Star Alliance by the end of the year, so buying the miles now for a redemption beyond that time frame on a Star Alliance carrier, or in one of the award chart “sweet spots” I mentioned above would be a viable and smart strategy. Keep in mind that you can also buy US Airways miles for cheap using the Mileage Multiplier.

I know a lot of people were interested in buying miles specifically in case the merger proceeded according to plan on the assumption that these miles would be merged into their AAdvantage accounts – a potentially good strategy until this DOJ announcement and possible derailment of the merger because American rarely sells points for under 2 cents each, and their buy miles promotions are usually incremental, meaning you have to buy a lot of miles to earn the full bonus.

The American US Airways news is only the latest in a string of high-profile airline mergers.

If the merger proceeds, you should be able to switch miles between programs.

If the merger proceeds, you should also be able to switch miles in between programs until they are finally merged or even later since it will take a while before both frequent flyer programs are brought under one roof – so that you might have been able to take advantage of some of American’s award routing rules including a domestic stopover at a gateway city and the fact that you can use AAdvantage miles to book one-way awards.

However, now that circumstances have changed and the merger timing has been thrown into doubt, I wouldn’t bank my buy miles strategy on any sort of American angle for the time being.

The takeaway as I see it is that you should only buy miles if  you are going to use these for an imminent US Airways award either on the airline itself or on its Star Alliance partners while the airline remains in the alliance. The same holds true of buying up to US Airways’ Chairman Preferred top-tier elite level in the hopes that you’ll be made an AA Executive Platinum after the merger. Nothing about that arrangement is for sure, and now that the merger is presumably going to be delayed (a little, if not indefinitely), there’s no telling whether you’d ever get a status match with American.

US Airways World Mastercard

Don’t apply for the US Airways World Mastercard just yet if you are doing it for the 35,000 sign-up bonus.

I would also hold off on applying for the US Airways World Mastercard speculatively for now if you were just going to do so for the current sign-up bonus of 35,000 miles after your first purchase with the annual fee waived the first year. While you can still put those miles to use, and the card comes with various other perks including 5,000-mile award redemption discounts, unless you have a specific plan of what you’re going to do with those miles in the short term, you might as well get in on better credit card offers out there like the current Starwood Preferred Guest Amex personal and business cards, which are offering 30,000 points when you spend $5,000 in 6 months as their sign-up bonus until September 3, and which you can then transfer to US Airways (among 30 other airline partners) with a 5,000-mile bonus when you transfer in increments of 20,000 miles.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.

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  • JB

    I don’t understand how the Starwood card is a better offer with less points and a higher spend. The Usair card (no spend, no fee) is one of the most churnable out there. Churning the business and personal twice you could rack up 140K points by the end of the year. If USAir doesn’t merge – do you really think they will leave star-alliance? Probably not. So either you end up with USAir (sweet award levels) or AAdantage miles. its a win either way.

  • Raj

    Great Point! And for those that already have the AAdvantage citi cards, and assuming this is just a hiccup, wouldn’t this be a great way to get some additional AAdvantage miles? Once (and if) the merger moves forward, this card (and miles) won’t be available to current AAdvantage card holders.

  • Scott C

    @JB Just another blog post to try to direct CC apps to affiliate links.

  • Lantean

    why would anyone hold off getting a churnable card that has no min spend and no annual fee? wtf?
    even tho this post has US Air miles in the title, it ultimately is about promoting Stawoords cards… this does not make sense to me.

  • LiberaceLikesObama

    It is a win-win situation. Mileage programs wont rise in the immediate future. Too much going on at AA/UA. You can get the greatest 90k Business class to N asia thru Europe. And worst case scenario, your miles would convert to AA miles, not bad. But again, you need a plan since all programs devaluate, and no program that I am aware of, revaluates !

  • LiberaceLikesObama

    Starwood is a great offer….to the bloggers who receive points and commissions ! Lousy card with foreign transaction fees.

  • rikster

    TPG may wish to look through the various aviation and travel forums, where a few antitrust lawyers have chimed in on the merger. Or maybe even look over the DOJ filing. The bottom line: this merger now has little chance of happening. US and AA were earlier unable or unwilling to address the government’s competition concerns; this is why we are at the lawsuit stage. The DOJ rarely loses.

  • Robert

    If only Barclays wanted to approve me and my wife not for 4 but just two cards at the same time. In both cases, due to multiple applications we were approved for one card each.

  • jamie

    just random question around US Airways — if I booked a flight for say June 2014 on US Air and entered my star alliance details, does this mean that come Jan if they really do leave Star Alliance, I won’t get the miles for that June flight?

  • Chris

    I agree that Starwood doesn’t have a great sign-up bonus, but it is a great way to earn miles that can transfer to a variety of partners using Vanilla reloads at around .6 cpm.

  • dean

    How often is it churnable…once a year from last cancellation?

  • dean

    The US Air card, that is.

  • Lantean

    every 3-6 months… you can hold 2 at a time…

  • Kaikane

    As JB said, it’s hard to believe that USAirways will now be leaving the Star Alliance, unless and until the merger with AA goes through. If you really want to hedge your bets, book your flight on United Airlines, and be sure to get those Star Alliance miles.

  • Tina

    Off topic, but something to consider. What about instead of buying miles, buying US Airways stock? Ticker LCC. It’s currently less than $16 a share. If the merger proceeds and the stock price rises, you could sell and make enough to buy a plane ticket.

  • Mike

    You’ve mention the “sweet spots” for redemption in several posts about US Airways, including 110,000 miles for a business class seat to the South Pacific. Since US Airways is in Star Alliance, this would have to be on Air New Zealand. I’ve tried to book business class award tickets on Air New Zealand flights between the U.S. and N.Z. (making several calls both to US Airways and Air New Zealand), and have learned that, as a practical matter, Air New Zealand does not make business class seats available for award redemption on flights between North America and New Zealand (which is their gateway to Australia). And they have very limited availability in economy. The NZ-North American routes are the most profitable for Air New Zealand and they don’t want to sacrifice the revenue. (According to one Air New Zealand rep, they always sell out in business class with paying customers, so they have little incentive to offer those seats for redemption.)

    I’m pointing this out just to show that all of the “sweet spots” aren’t real.

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