American Airlines raises the cost to purchase miles without any notice
If you're looking to top off your American Airlines AAdvantage account, expect to pay more per mile.
The Fort Worth-based carrier raised the cost to purchase or gift miles on Thursday by nearly 20%, from 2.95 cents per mile to 3.5 cents per mile. The airline confirmed the price increase to TPG with the following statement: "Our programs and offers are subject to reviews, and changes are implemented accordingly to ensure we remain competitive in an ever-changing market."
The new price to purchase miles will be applied before any discounts or promotions, which American runs multiple times per year. For instance, the airline's latest offer includes an up to 35% discount on purchased or gifted miles, bringing the cost per mile down from 3.5 cents to 2.4 cents (including all taxes and fees).
Note that while American is raising the cost to purchase or gift miles, it isn't (currently) changing the cost to transfer miles between accounts, which remains at 1.5 cents apiece.
For American, raising the cost to purchase miles will directly increase the program's bottom line. Of course, mileage sales account for only a fraction of the program's revenue, which is largely supported by bulk purchases of miles from cobranded credit card issuers and other partners.
Ultimately, this move might be a way for American to generate more revenue from its biggest partners (Barclays and Citi).
Perhaps most interestingly, American's move to raise the cost of miles comes just weeks after the airline's "deal of the year" ended. Flyers were able to use American's SimplyMiles platform to purchase miles for less than half a cent apiece. Many savvy travelers took advantage of this promotion, which American honored in its entirety.
Related: When does it make sense to buy points and miles?
Either way, raising the cost of miles stings for flyers who've been used to paying 2.95 cents per mile in the past. Plus, the change was made without any notice, so those who've been eyeing a mileage purchase will now need to pay up.
Of course, we'll have to wait and see if American adjusts its frequent promotions to account for the increased cost to purchase miles. If it does (by increasing the discount on purchased miles), then this change could be a wash for flyers.
Note that accounts under 30 days old are not eligible to purchase miles. Plus, mileage purchases are typically capped at 150,000 miles in a calendar year, though some promotions offer bonus miles that allow you to acquire more than the cap.
As always, you should only buy miles if you have a specific high-value redemption in mind. However, if you don't need miles immediately, you may want to wait for a better buy miles promotion — or consider signing up for a cobranded credit card with an elevated sign-up bonus.