Why not stockpile AA points

[andrewdenison]

Hi Everyone,

I read everywhere not to buy AA points during their sales unless you have a use for the points straight away.
My question is why. To my reasoning they still offer very cheap business class flights. especially on Etihad.

With the current promotion, buy 150,000 and get an extra 115,000 miles = 265,000 miles.
Cost is $4425 US which equates to something like $5875 AUD (using OFX today).

Australia to Europe in business is 85,000 points each way = 170,000 divided by the 265,000 purchased = 64.15% of the 265,00 points purchased for $5875 are used for the return trip.
Therefor 64.15% of the total cost of buying the 265,000 points ($5875) = $3769 for a return business class flight to Europe.

Yes I know it is only for award flight redemptions and they can be hard to come by especially on QF and all airlines in peak times.
And yes I understand that airlines tend to change their award redemption rates, but after the most recent AA adjustment I don't think there will be any big shocks in the next year or so.

So understanding the above limits - is this not a cheap way to get business class flights to Europe (especially with Etihad where is usually a bit more availability).
Even if there was say a 25% adjustment this is still better than buying commercial airfares.

I just don't see the down side of buying for the future (by that I mean the next 12 to 18 months.

Happy if someone can explain what I am missing.
We usually travel to Austria (via MUC) twice a year to visit family.

Thanks for any help or advice especially if there are better ways to do this, or better programs to use.

 

[Gold Member]

Your logic is sound, and the AA program still has some sweet spots. The other programs you refer to that may offer better value for money IMHO include Alaskan MP and Avianca/Taca LM.

 

[cove]

We have done this in our family but you need to know AA can devalue the miles.

 

[docjames]

The "risk" is devaluation (ie. The "price" in points goes up for the reward you want).

Risk/reward - if the deal is good and you think AA won't "change the value" then it's worth "stocking up" when offers come.

 

[andrewdenison]

Thank you Gold Member, Cove and docjames.
I appreciate your replies and it gives a bit more confidence that I am not missing anything too big.

Cheers

 

[Limewood]

Its still a bargain but don't forget the 7.5% tax though and the real CC exchange rate.

Using some tomorrow BNE/HKG/BNE in J

 

[cove]

There is good money to save on AA, Avianca , Alaska and others for business and first class flights where you can buy their miles. Our family have saved a bunch on AA flights on miles.

 

[RooFlyer]

No problem in having a decent balance of AA miles, from my point of view. I usually maintain about 60K so as to be able to nip in and buy a flight if circumstances are right. So I have suffered the recent devaluation but as they were acquired when the A$ was positive wrt the US$ so I was OK with that rather than booking something before the devaluation that I didn't need to do.

 

[andy2015]

Australia to Europe via AUH on Etihad is two separate award bookings. To be one you can only connect via Asia Zone 1, Asia Zone 2, or Doha.

 

[Flippantflyer]

Like others here I agree there can still be good values. However, if you are consistently flying to Europe twice a year, it may be worth you looking at nested trips from Europe to Aus return when there are sale fares? can sometimes get good business class deals (eg on Qatar) that way from places like Norway or Sweden... you just need to be aware of the fare rules.

Hi Everyone,

I read everywhere not to buy AA points during their sales unless you have a use for the points straight away.
My question is why. To my reasoning they still offer very cheap business class flights. especially on Etihad.

With the current promotion, buy 150,000 and get an extra 115,000 miles = 265,000 miles.
Cost is $4425 US which equates to something like $5875 AUD (using OFX today).

Australia to Europe in business is 85,000 points each way = 170,000 divided by the 265,000 purchased = 64.15% of the 265,00 points purchased for $5875 are used for the return trip.
Therefor 64.15% of the total cost of buying the 265,000 points ($5875) = $3769 for a return business class flight to Europe.

Yes I know it is only for award flight redemptions and they can be hard to come by especially on QF and all airlines in peak times.
And yes I understand that airlines tend to change their award redemption rates, but after the most recent AA adjustment I don't think there will be any big shocks in the next year or so.

So understanding the above limits - is this not a cheap way to get business class flights to Europe (especially with Etihad where is usually a bit more availability).
Even if there was say a 25% adjustment this is still better than buying commercial airfares.

I just don't see the down side of buying for the future (by that I mean the next 12 to 18 months.

Happy if someone can explain what I am missing.
We usually travel to Austria (via MUC) twice a year to visit family.

Thanks for any help or advice especially if there are better ways to do this, or better programs to use.

 

[smit0847]

There's a lot of hoops to jump through with routing rules, availability, call centre connections etc.
That's the catch.

 

[Franky]

Thank you Gold Member, Cove and docjames.
I appreciate your replies and it gives a bit more confidence that I am not missing anything too big.

Cheers

I'm with you Andrew. Though as has been pointed out, using Etihad needs two redemptions to Europe, with us being on the West Coast, there are a variety of good airlines to choose from, and availability much better than those on t'other side who seem to fly to the US more frequently. We are about to fly Etihad later this year to Europe . If we did want to fly to the US, Perth is geographically half way around the world from New York, so a trip going west about would be just as good for us, with a lot more openings to choose from. Regards

 

[JohnK]

Yes I know it is only for award flight redemptions and they can be hard to come by especially on QF and all airlines in peak times.
And yes I understand that airlines tend to change their award redemption rates, but after the most recent AA adjustment I don't think there will be any big shocks in the next year or so.

Not questioning your logic but the above statement(s) is/are the key for me.

AAdvantage miles were a great way to get to SE Asia when the dollar was at parity. I stockpiled some miles a few years ago. I have most of the miles in the past 12 months but too many hurdles with award availability around the dates I want to travel. My dates are relatively fixed.

And then the recent devaluation was the straw. I don't want to pay $2,000+ to get to/from SE Asia in business class when the economy class airfare is only ~$600-$700 return and counts towards earning statis and accumulates points/miles.

 

[snabbu]

Even after the recent devaluation there is still a huge incentive to buy miles during the promos. It all depends on your situation and flying patterns.

US-AU vv in premium cabins is still a bargain if you are smart about it.

 

[Franky]

Understand your position John, fixed dates and relatively short trips are your enemy I guess. The devaluation was a disappointment, but one hopes that that will be it for a while in that regard. On the other hand, my wife is still working and flying enough to have maintained WP for a number of years, and a stockpile will allow me to do the bag carrying for her on some of her flights deep into China, or South Africa and parts of Europe. It is a toss-up for me to bag carry for her shorter trips, but this will probably only last for another two years until retirement calls for her too, so even with some trips being not the best value for money, its better than being home, alone. Regards

 

[knasty]

Australia to Europe via AUH on Etihad is two separate award bookings. To be one you can only connect via Asia Zone 1, Asia Zone 2, or Doha.

Yep (Or DXB on QF). The changed redemption rates have killed the EY option for me; what used to be a small premium has now blown out. I'd be booking EY on VFF points going forwards, even with VFFs increased mileage cost for EY.

 

[cove]

I did buy 2 lots of AA miles for family members tonight. With the exchange rate running between 0.76 and 0.77 and a 115,000 bonus it looked alright to hit up my US Citibank CC.

 

[GarrettM]

I did buy 2 lots of AA miles for family members tonight. With the exchange rate running between 0.76 and 0.77 and a 115,000 bonus it looked alright to hit up my US Citibank CC.

I signed up to AA last month with this promotion in mind. Specifically for redemptions from North and South Asia, which seem well worth the outlay. 40K/pax from Japan to Perth in J seems quite good to me. Availability a factor as well obviously. Damn Qantas and their non-Perth stance.
But I'm probably going to miss out, as their T&Cs specify accounts must be older than 30 days in order to access the bonus.

 

[cove]

GarrettM it does run up to April 28th US time so you can do your attempt to buy miles on the morning of April 29th I believe. Now that gives you time to get set with a Bankwest CC to get points and a fair exchange rate or just use 28 degrees or Citibank debit. No point letting a bank rip you for 3% to 5% on forex.

 

[drewbles]

Its still a bargain but don't forget the 7.5% tax though and the real CC exchange rate.

Using some tomorrow BNE/HKG/BNE in J

Factoring in this, plus any possible devaluation, and severe availability issues in premium cabins on non-AA metal, the cost does not look good.

You're also effectively hedging currency by doing this too.

There are frequently offers ex-AU to Europe for around $5kAUD on some decent airlines (I did CX/KL from AU to AMS for $5k a few months ago). This then earns you points and status credits etc (depending on airlines flown/alliances they're members of/programs you credit to). It also means you're not limited to whatever availability is offered to you by AAdvantage. But when you weigh up the risks of all the volatile variables, stockpiling isn't necessarily a great idea.