This post is part of a four-part series. In Part 1, we looked at the mechanics of the AAdvantage program. In Part 2, we looked at the mechanics of a stopover, including how to use them to get free oneway trips within North America. In Part 3, we valued specific AAdvantage awards. In Part 4, I’ll put a number on one AAdvantage mile.
In this post, I’ll explain why I value one AAdvantage mile at 1.77 cents per mile, but your value will be different. To start I’ll go back to the values for the redemptions I found in Part 3. To find your value, you’ll need to start with your possible redemptions. My redemptions:
- HNL-LAX//LAX-LIM (B) 2.33 cpm
- LAX-MIA-MVD (E) 1.89 cpm
- TPA-MIA-LAX//LAX-HKG-BKK (E) 1.78 cpm
- TPA-MIA-LAX//LAX-HKG-BKK (F) 1.71 cpm
- LAX-MIA-MVD (B) 1.66 cpm
- MEL-LAX//LAX-DFW-TPA (B) 1.64 cpm
- LAX-DFW-TPA//TPA-LGW, LHR-ORY (B) 1.53 cpm
- LAX-DFW-CUN//CUN-LGW (B) 1.39 cpm
- LAX-CHO (r/t) (E) 1.15 cpm
I’ve put in bold redemptions I would still consider doing now that I’ve run their values. These range from 1.53 cents per mile to 2.33 cents per mile. Here’s where the math stops and the estimation begins. We want to get a single number, so pick a number from inside the range of great redemptions. Base your decision on which redemptions you’re most likely to make and which will take the bulk of your miles. I’ll pick 1.80 cents per mile. I think most of my trips in the next few years will be to South America and Asia, and I think I’ll tack on a few stopovers to HNL in the future, so I think 1.80 cents per mile is the right number here.
The last step is to make adjustments to the figure you’ve chosen based on how the rules of American Airlines’ program differ from paying with cash and how you value these differences. We need to do this because when we value AAdvantage in cents per mile, we are putting a cash figure on a mile, thus comparing the program to cash. We talked about the rules of the program in Post 1. Here are the relevant differences between booking with AAdvantage miles and cash:
- Stopovers, open jaws, and oneways don’t cost extra with AAdvantage miles. They usually do with cash. Advantage AAdvantage. I value this flexibility in routing quite highly because I like my trips to include several cities without backtracking.
- A close in ticketing fee of $75 within 21 days of departure. Of course, there are no close in ticketing fees with cash, but prices tend to go way up. AAdvantage prices go up too. Too close to call.
- When there’s space, AAdvantage awards cost the same every day of the week. It’s often most convenient to fly Friday or Sunday, but paid tickets cost the most those days. It’s great to be able to book awards any day of the week for the same price. There is definitely a pattern of better award availability midweek, but it is not as pronounced as the ticket price increases on weekends. Slight advantage AAdvantage.
- Cancelling a cash ticket costs $150 for most airlines. Cancelling an AAdvantage ticket costs the same. Wash.
- Awards are allowed to exceed the Maximum Permitted Mileage on a route by 25%. This allows some routings and stopovers cash doesn’t. Advantage AAdvantage.
- While AA availability is good, and its partner availability is good to great, obviously availability with cash is better. Every flight is available with cash, only a portion are available with AAdvantage. Huge advantage cash.
Availability is fine on AAdvantage compared with other programs, better really, but cash obviously has much better availability, which is the major drawback of all (non-fixed-value) frequent flier programs. To me, the benefits of AAdvantage awards over cash listed above are less valuable than the one major drawback of AAdvantage awards compared to cash. I love being able to book Fridays, Sundays, oneways, open jaws, and stopovers, but the fact that awards aren’t always available when I want them hurts the value of AAdvantage miles like all miles. For that reason, I will lower my 1.80 cents per miles valuation that I came to above to 1.77 cents per mile. If you prefer roundtrip vacations to one place, flying midweek, and have no flexibility in when you can take trips, you should lower the value of an AAdvantage mile. If you really like openjaws, stopovers, and oneways; flying on the weekends; and have total flexibility in when you can take trips, you should raise the value of an AAdvantage mile. Again this is a stage for personal valuation and estimation.
Understand the American Airlines award program, understand its stopover provisions, find good awards for you, value those awards, and finally adjust that value for how cash and AAdvantage tickets differ. Do that, and you’ll be able to put your own value on an AAdvantage mile. And best of all, you can exploit the AAdvantage program.
I value one AAdvantage mile at 1.77 cents per mile.