Buying miles for discounted flights: Dividend Miles vs AAdvantage

American frequent flyer programs often run promotions which incentivise the direct purchase of miles – either by way of a discount or a bonus mileage offer, with the miles then redeemable for travel in economy, business or first class.

In recent months we’ve seen US Airways offer travellers bonuses of up to 100% when buying Dividend Miles, while AA is currently offering up to 40% more AAdvantage miles on purchases until the end of this month.

These promotions make travel at the pointy end incredibly affordable – Australian Business Traveller’s previous research had found return Qantas business class trips from Sydney to Perth available for A$628, with Qantas' A380 flights from Sydney to Dubai and back at just $2,338.

If you’re good at planning ahead and want to take advantage of offers like these, you’d be wise to buy big on miles when airlines are rolling out their best offers – as long as you have a specific redemption in mind, and can confirm that suitable awards are available on your preferred dates before spending a cent.

Although American Airlines and US Airways are in the process of merging, an AA spokeswoman confirmed to Australian Business Traveller that “American and US Airways will each maintain separate loyalty programs for some time.”

Until then, the best offer has varied between the two airlines – so, where are you travelling to?

Sydney to Hong Kong and Singapore

Under the current AA promotion, you’d pay A$1,607 to fly from Sydney to Hong Kong and back in business class with either Qantas or Cathay Pacific, or $2,066 for a first class suite on Qantas’ Airbus A380 aircraft.

Business class on Cathay Pacific's Airbus A330s

British Airways flights from Sydney to Singapore come in at the same price, as does Qantas (sans a first class cabin). In all cases, small amounts for taxes and surcharges are payable when redeeming miles for travel – although BA’s fuel surcharge on AAdvantage awards make other airlines and routings a better choice where possible.

Even if you lucked out with a 100% US Airways mileage bonus, the same flights are up to A$340 more expensive through this travel trick.

Winner for Asia: AAdvantage

Sydney to London

On the Kangaroo Route, the US Airways 100% bonus allowed return business class flights to be had for roughly A$2,400, or $3,000 in first class – just $150 extra for each of the four flights.

Qantas First Class on the Airbus A380

AA’s currently promotion isn’t as good, but it still beats the retail fare – $2,754 return in business class or $3,672 in first.

Of course, with AA's annual purchase limit of 80,000 miles, you'll need to buy enough for a one-way award in your own account and then have a family member buy the same quantity to cover your return trip, before then redeeming them for a ticket in your name.

(AA's annual cap doesn't include 'bonus miles', which in this case encompasses the extra miles earned through the 40% bonus promotion.)

As this article encourages forward planning and buying miles during the best sales, our trophy goes to the airline with the best promotional offer. Of course, if you need to travel sooner, AAdvantage is still a consideration.

Winner for London: Dividend Miles

Sydney to Dubai

Going as far as the Middle East, you’ll find it’s only marginally cheaper than continuing to London or further onwards within Europe – so if you have the time, make the journey!

If Dubai really is your final destination, you can get there and back in business class for A$2,066 or $2,756 in first on the Qantas A380.

On the upper deck, it's business class at front on Qantas' A380s

That’s available now, so start doing your research on AAdvantage!

With AA's asking price for first class set at 60,000 miles each way, you'll again need to have a family member help you book your return journey to avoid the annual purchase cap.

If you’re sitting on a few Dividend Miles, you’d be looking at either A$2,404 in business class or roughly $3,000 at the pointiest of pointy ends – so take our advice and continue onwards to Europe… it’s the same price!

Winner for the Middle East: AAdvantage

Perth to Auckland

If your goal is Qantas’ seasonal Perth-Auckland flight, you could have grabbed a seat in business on the return journey for just A$600 through the recent US Airways promotion.

Granted, this route was announced after the promotion finished, though if you’ve stocked up on miles, this is one decent way to spend them!

The sloping sleepers on Qantas' A330s... it's certainly better than the Boeing 737s from the east coast!

For more imminent travel, AA’s current promotion comes in at just over A$800 return – significantly cheaper than $2,840 – the best retail fare for travel in December.

The same costs apply for flights from Brisbane, Sydney and Melbourne to Auckland, although the longer trek from Perth is a better value redemption.

Winner for New Zealand: Dividend Miles

Earning US/AA miles through travel

While all of these ‘specials’ earn no points or status credits, you can still earn miles with both American Airlines and US Airways when travelling on most eligible (paid) Qantas flights.

The earning rates are identical for both programs, so unless you’re travelling on the cheapest sale fare in the E ‘fare bucket’, you can easily top up your mileage balance on the Flying Kangaroo.

Are you planning to book award seats to Asia or the Middle East using discounted AA miles from the current promotion, or are you leaning towards ‘waiting it out’ for Europe or New Zealand with cheaper Dividend Miles?

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Chris C.

Chris is a a former contributor to Executive Traveller.