Friday, September 14, 2012

United Airlines revisits MileagePlus bonus offer

Three days after receiving an e-mail from Alaska Airlines about its offer of a bonus of up to 40% for Mileage Plan™ members who purchase miles, United Airlines made a similar offer to its MileagePlus® members.

The two offers are slightly different.

United Airlines is offering discounts of up to 40 percent off its normal price of $35 (plus federal excise tax) per 1,000 miles purchased through Sept. 19, while Alaska is offering to add up to 40 percent to the number of miles purchased through Sept. 28.

In both offers, the maximum 40 percent bonus kicks in for purchases of 30,000 miles or more.

A challenge

Whether it was a misstep or intentional, United did not make it easy to find the offer on its web site without using the hyperlink contained in its e-mail, so I’m including it here.

The basics

United MileagePlus® members who purchase 42,000 miles will pay $948.15 ($882.00 plus 7.5 percent federal excise tax), which works out to a purchase price of 2.26¢ per mile. Alaska Mileage Plan™ members who purchase of 30,000 miles would earn 12,000 additional bonus miles, for a total of 42,000 miles. The total cost would be $886.88 ($825.00 plus 7.5 percent federal excise tax), which works out to a purchase price of 2.11¢ per mile.

Although the per-mile price of the two programs is close, there’s more to it than that. The actual value is best determined by the amount of money you save by using miles instead of paying cash for a ticket. Using your miles to get somewhere is, after all, the point.

Do the math

I recommend working backward. Before you purchase a large chunk of additional miles from either carrier, decide where you’d like to go on your free ticket and see if you can book that  ticket using your miles.  If so, look at the price you’d pay in cash versus how many miles you’d have to use. Divide the price of the ticket by the miles needed to determine how much value you’ll be getting from each mile. 

For example, using 50,000 miles to buy a ticket that would otherwise cost $800 means each mile is worth 1.6¢. If you can get that same ticket for 25,000 miles, then the miles are worth 3.2¢ each, which is a much better value, especially if you’re paying about 2¢ each.

A little homework can either yield substantial dividends or show that it's not worth the effort. Either way, safe and enjoyable travels!

Visit my main page at TheTravelPro.us for more news, reviews, and personal observations on the world of upmarket travel.



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