Low-cost Qantas business, first class buying US frequent flyer miles

By Tuhin Abhyankar, July 20 2017

UPDATE | A new AAdvantage 'buy miles' promotion is underway, this time offering a bonus of up to 100,000 miles on American Airlines mileage purchases plus cash discounts of 10% on the purchase price through August 1 2017 for use on Qantas, Cathay Pacific and other Oneworld airlines.

Given the current, favourable USD:AUD currency conversion rates atop this great bonus offer, you could be flying to Asia in business class for about half the cost of a regular ticket, or even further beyond at great savings as well.

Under the promotion, all purchases of 11,000-20,000 miles are joined by a modest 2,500-mile bonus; buying 76,000-100,000 miles nets a cool 27,500 bonus miles and at the top of the spectrum, 150,000 miles come with the full 100,000 bonus miles on the side.

In between, the bonus you'll get varies based on the exact number of miles purchased, and for maximum value, buying miles at the bottom of each rung – such as 101,000 miles with a 45,000-mile bonus, delivers the lowest costs per mile:

All purchases of 11,000-150,000 miles also attract a 10% discount.

Buying the full swag of 250,000 miles – 150,000 miles with the 100,000-mile bonus – sets you back US$4,311.19 (A$5,422), being around 2.16 Aussie cents per mile.

That's great if you're planning numerous trips, but if a simple return flight from Sydney to Hong Kong, Shanghai or Singapore and back in business class is your goal, spring for just 80,000 miles – bought as 65,000 miles + 15,000 bonus miles with a 10% discount – and you'll pay a lower US$1,885 (A$2,371).

At that rate, you're paying around half the usual asking price for a business class ticket to Asia, and only need to pay the ticket taxes and surcharges on top when you redeem those miles, which usually amount to $100-200, depending on the airline and route you choose.

The normal caveats apply, of course. You may need to do a little searching and have some flexibility in your travel plans to snare these award seats, and solo travellers during off-peak periods will naturally have an easier time of this than when booking a trip for the whole family at Christmas or during Chinese New Year.

Aussies living in Sydney, Melbourne and Brisbane have until 2:59pm on August 1 2017 to jump in and take advantage of the deal, while Perth residents can buy miles with the generous bonus until 12:59pm local time on the same date.

The article below, while written when AA's buying and redemption mileage rates were more generous, still serves to explain the general process of buying and using American Airlines AAdvantage Miles to book flights with Qantas and co.

Update by Chris Chamberlin

PREVIOUS | Psst... wanna buy a Qantas business class return ticket to Singapore for $2,400?

How about heading to London in Qantas' Airbus A380 first class suites for $2,700, or flying business class to Los Angeles and back for $4,300?

Rest easy. These are no shonky, shady deals.

It's done by booking the flights via Qantas' US partner American Airlines, which allows you to buy frequent flyer points and then redeem them for travel at a fraction of the usual sticker price, as you would with any other frequent flyer points.

Completely above board and a favourite trick of savvy Australian frequent flyers, the only catch you'll find is that varying government fees and taxes are payable with cash when you book your flights (such as the Australian 'passenger movement charge'), but these are usually kept to a minimum.

It's also best done when American Airlines is running a special promotion which lets you 'bulk buy' AAdvantage miles – American's equivalent to Qantas frequent flyer points – with a side serve of bonus miles, because that reduces the effective cost of buying AAdvantage miles to an exceptionally low level.

You can then use those miles to book award flights on Qantas – or any other Oneworld partner airline such as British Airways, Cathay Pacific, Malaysia Airlines or Qatar Airways – through the American Airlines website or over the phone (+1 800-882-8880).

That's good news on its own, but it gets better: American Airlines is currently selling AAdvantage miles with up to 27,500 bonus miles through to the end of July.

So if you're keen to land a killer airfare deal, here's what you need to know.

Taking AAdvantage of bonus miles

Like many US airlines, American sells miles to help frequent flyers top up their accounts.

AA sells AAdvantage miles in parcels of 1,000 miles starting from US$31.71 (plus a US$30 processing charge per purchase) – although this month's promotion doesn't kick in until you buy at least 16,000 miles, costing US$537.40 including the processing charge.

Here's how the bonus miles are allocated:

buying from 16,000 to 30,000 AAdvantage miles nets you a 5,000 mile bonus
from 31,000 to 45,000 miles adds 10,000 miles to your tally
46,000 to 60,000 miles boosts your balance by 15,000 miles
61,000 to 75,000 miles scores you 20,000 extra miles
while anywhere north of 76,000 miles (US$2,440) comes with a free serve of 27,500 more miles.

Now, time for some caveats.

First up: the purchase of AAdvantage miles is capped at 100,000 miles each calendar year, although bonus miles from deals such as this one aren't counted in that cap.

Assuming you haven't bought any AAdvantage miles this calendar year, your maximum haul under this promotion – including bonus miles – can be as high as 127,500 miles using a strategy we outline later in this article.

Secondly, the bonus miles offer ends at 11:59pm on Friday July 31, US Central Time. That's 2:59pm Sydney time on Saturday August 1, so the clock is ticking!

There's also a catch for new players: you'll need to have been a member of AAdvantage for at least 30 days to buy miles.

Sadly, this means if you're not already an AAdvantage member, you won't be eligible for this month's promotion – but it's worth signing up right now (it's free, after all) so that you're ready for the next bonus miles offer.

How the fares compare

Here's a table comparing a few Qantas routes and their ticket prices against the cost of buying AAdvantage miles under the current promotion.

We've restricted the table to routes requiring less than those maximum 127,500 AAdvantage miles which means listing only one-way trips to London and Los Angeles in first class, as a return journey would exceed what can be bought this time around.

[Click on the table above to enlarge it]

As you can see, using AAdvantage miles to book a Qantas flight makes for massive savings against Qantas' own ticket costs – although it's important to flag that Qantas' flight prices are inclusive of any taxes and fees, while the cost of buying miles is simply that.

Therefore, you'd be wise to budget a few hundred dollars extra per trip in government and airport taxes and fees (payable when you swap those miles for a seat on a flight) on top of the AA 'buying miles' cost, particularly if you're flying to the UK with its hefty Air Passenger Duty (APD) charges.

The mileage costs above are also based on buying only enough miles to cover that single one-way or return flight: buying even more miles may also lower your 'cost per mile' to boost your bargain.

Not just Qantas: BA, Cathay and others too

The same strategy also applies to other Oneworld airlines such as British Airways, Cathay Pacific, Malaysia Airlines, Japan Airlines and Qatar Airways, whose flights can all be booked through American Airlines.

For example: for A$2,409 you can get 70,000 AAdvantage miles, which covers a return business class trip from Australia to most major Asian cities on any Oneworld airline.

That includes

Qantas or British Airways business class return to Singapore
Malaysia Airlines business class return to Kuala Lumpur
Qantas or Cathay Pacific business class return to Hong Kong

Cathay Pacific business class return between Australia and Hong Kong? Yours for under $2,500 when you use American Airlines' AAdvantage miles

Similarly, you could choose between Qantas, British Airways, Cathay Pacific, Japan Airlines, Malaysia Airlines and Qatar Airways for flying from Australia to London or Europe for the same outlay of points.

That includes the many European cities you can reach from Cathay Pacific's home base of Hong Kong plus the handful of MAS services from Kuala Lumpur to Amsterdam, Paris and Istanbul.

More good news: Australia (and New Zealand, for that matter) count as one zone for redeeming AAdvantage miles against flights, so there's no 'Perth surcharge' or even a 'not living in Sydney surcharge'.

The complete American Airlines AAdvantage Award Chart can be found here.

Getting back home from LA, London and Europe

Under the July 2015 promotion, it's possible to buy enough miles for a return trip to any major destination above, but that's not always the case.

For example, some deals may instead offer a discount on the miles that you buy – capped at 100,000/year – rather than a bonus that gives you a boost beyond that line.

In those instances, use low-cost AAdvantage miles to cover one leg of the journey and book the other leg with your existing Qantas frequent flyer points, cash or look at buying miles in either United MileagePlus or Avianca LifeMiles if you're happy to travel with Star Alliance airlines.

A first class flight to London is just $2.770 away if you book your Qantas A380 flight with AAdvantage points

Depending on your budget, you may decide to luxe it up one way in Qantas first class using AA miles and settle for business or even premium economy on the other half of the trip, which you'll book separately.

An alternative is to bridge the gap by adding more AAdvantage miles to your account through AA's raft of partners.

Topping up your AAdvantage miles

Many hotel loyalty programs – including Starwood Preferred Guest – allow you to convert your hotel points into American Airlines AAdvantage miles.

Another option is to quote your AAdvantage frequent flyer number instead of your Qantas Frequent Flyer number on your next Qantas or Oneworld flight, especially if it's a long overseas one.

A few Qantas flights earning into your AAdvantage account might be all that's needed to set yourself up for that first class trip to London.

Three expert tips for buying AAdvantage miles

1. The 'sweet spot' in this deal is at the lower end of each tier because the bonus miles represents a higher portion of your purchased miles.

For example, buying 60,000 miles will get you the same 15,000-mile bonus as buying 46,000 miles.

On the other hand, if you're buying near the top of any mileage bracket consider shelling out a little more to nudge your purchase over the line and score more bonus miles.

2. The best points-per-dollar value isn't at the top of the scale. It actually lies smack in the middle.

Buying up to American Airlines' annual maximum limit of 100,000 miles will cost you US$3,201 and gets you 27,500 bonus miles, for a total of 127,500 miles. That's 2.51 US cents per mile.

But if you buy two packages – the first being 48,000 miles + 15,000 bonus miles and the second being 49,000 miles + another 15,000 bonus miles – you'll wind up with a similar 127,000 miles for US$3,136.

That still leaves you with a decent chunk of usable miles, but drives the overall price down to 2.46 US cents per mile.

3. Our advice is to buy miles only if you have a specific trip in mind, rather than as a hedge against some undetermined trip in the future.

Airlines can and do 'devalue' frequent flyer points or miles from time to time, often with little warning, so don't sit on your balance for too long.

More tips: Five expert strategies for buying frequent flyer miles

How to bulk-buy AAdvantage miles

Log onto the American Airlines' AAdvantage Buy & Share Miles website with your AAdvantage membership number, click the big red Buy Miles button and follow the prompts.

It's a very straightforward process with the opportunity to review your purchase before you lock it in.

Those miles will usually be added to your account within 72 hours, at which time you can jump in and book your flights with Qantas or any other Oneworld airline.

Remember: you have only until 2:59pm Sydney time on Saturday August 1 to place your order and pick up those bonus miles.

How to book your Qantas flight with AAdvantage miles

Once you've bought all of those American Airlines miles, how do you go about using them to book a Qantas flight?

Jump online to the American Airlines website at AA.com, click 'Visit aa.com U.S. Site' at the top, and search for flights on Qantas routes – remember to select the 'Redeem miles' option on the left:

If you want to trade in your miles on flights with some of the AA's other Oneworld partner airlines, such as with Cathay Pacific, you'll need to call American Airlines directly.

The number you need is +1 800-882-8880, and it's open 24 hours a day, although we suggest firing up Skype or any other Internet-based phone service to keep those international call costs under control.

Note that while American Airlines' US Call Centre accepts Australian credit cards, our four-digit postcodes compared to longer five-digit US zip codes often trip up their system. An easy workaround for this is add a zero to the beginning or end of your postcode (for example, the Aussie postcode 2608 becomes a pseudo-ZIP code of 26080 or 02608).

Additional reporting by David Flynn and Chris Chamberlin

More ways to save on business and luxury travel:

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Tuhin Abhyankar

While not juggling demands of a full-time consulting job and part-time MBA Tuhin loves to just get on a plane, get up in the air and lose himself in a good book. Oh, and he LOVES finding great deals on seats at the pointy end!

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