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US Airways and American Airlines have merged since the publication of this post so it is no longer valid.

This post is part of a four-part series. In Part 1, we looked at the mechanics of the US Airways program. In Part 2, we looked at its award chart and rules to find valuable awards. In Part 3, we valued specific Dividend Miles awards. In Part 4, I’ll put a number on one Dividend Mile.

In this post, I’ll explain why I value one US Airways Dividend Mile at 1.95 cents, 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:

  1. LAX-PHL-MAD, CDG-PHL-LAX (B, off peak)           2.36 cpm
  2. LAX-CLT-GIG r/t (E, off peak)                                       2.24 cpm
  3. LAX-SYD-MEL, MEL-SYD//SYD-LAX (B)                 1.98 cpm
  4. LAX-NRT//NRT-HKG, HKG-NRT-LAX (B)               1.91 cpm
  5. LAX-FRA//FRA-ARN, ARN-FRA-LAX (B)                          1.83 cpm
  6. LAX-IAH//IAH-LOS, LOS-IAH-LAX (B)                              1.71 cpm

I’ve put in bold redemptions I would still consider doing now that I’ve run their values. These range from 1.91 cents per mile to 2.36 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 2.12 cents per mile. I think most of my trips with US Air miles in the next few years will take advantage of their off peak pricing because it is such a great value. I don’t earn many US Air miles, so any other Star Alliance travel I do will be with United miles, and I’ll save US Air miles for their off peak deal.

The last step is to make adjustments to the figure you’ve chosen based on how the rules of US Airways’ program differ from paying with cash and how you value these differences. We need to do this because when we value Dividend Miles 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 Dividend Miles and cash:

  • Open jaws don’t cost extra with US Air miles. They usually cost a little extra with cash. Advantage US Airways.
  • Stopovers are permitted only at Star Alliance hubs. With cash, stopovers can be anywhere, but they usually increase the price. Too close to call.
  • One ways cost the same amount of miles as roundtrips with Dividend Miles. This is horrible for two reasons. The first is that a oneway with cash is usually less and sometimes half the cost of a roundtrip. The second is that you need to earn tons of US Air miles before you can redeem any of them. For instance, only 17,500 miles will get you oneway to Hawaii with AA miles, but with US Air miles you need 40,000 miles. Huge advantage cash.
  • US Airways charges 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. The Dividend Miles price goes up too. Too close to call.
  • Cancelling a cash ticket costs $150 for most airlines. Cancelling a Dividend Miles award ticket costs the same. Wash.
  • While US Air availability is good, and its partner availability is also good, obviously availability with cash is better. Every flight is available with cash, only a portion are available with Mileage Plus miles, at least at the Saver level. Huge advantage cash.


Availability is fine on US Air compared with other programs, but cash obviously has much better availability, which is the major drawback of all (non-fixed-value) frequent flier programs.

But US Airways has a second huge problem with its value: the inability to book oneways for half the roundtrip price. This necessitates building up your Dividend Miles account to really high levels before making any redemptions and is a major drawback of US Air miles. It also means you will tend to orphan more US Air miles because you can’t use them in increments of less than 25,000 miles. Huge advantage cash.

To me, these two huge drags on the value of Dividend Miles lower the 2.12 cents per miles valuation that I came to above to 1.95 cents per mile.

If you can earn huge sums of US Air miles, so the roundtrip requirement isn’t a big problem, you have complete flexibility on when you can travel, you don’t mind Europe in the winter (off peak awards), and you like to only take vacations to one or two place at a time, you should lower the value of Dividend Miles less than I did.

If, instead, you have trouble running your Dividend Miles balance into the mid-six-figures, you like to travel to many places on a single vacation through oneways, and you don’t like US Air’s off peak awards, you should lower the value of US Air miles more than I did.

In sum, Dividend Miles are the most valuable airline loyalty currency for roundtrips to most destinations in the world, especially in premium cabins and especially using off peak awards. Their horrible routing rules- roundtrips only and one stopover at a Star Alliance hub or one open jaw- are a huge drawback. Which of these two is more important to you determines the relative value of Dividend Miles to other programs and the absolute subjective value you place on one Dividend Mile.

I value one Dividend Mile at 1.95 cents.