My New Valuation of American Airline Miles and SPG Points

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I previously valued AA miles at 1.6 cents per mile. I argued that was my perceived value, the amount I value my actual redemption to be. However recently I have changed my valuation of American Airline miles and SPG points.

I increased the value of AA miles to 1.8 cents per piece for three main reasons.

  • Only major airline with free date changes for non-elite members.  I like the option to change my departure date and return date to anytime within a year of the booking date.  United recently changed this fee from $0 to $75 on June 19, 2013.  
  • Free one-way rule is awesome. It’s awesome adding in a free half trip to Hawaii every time I take a direct flight out of LAX. I’ve recently done HNL-LAX(stop 3 months)-LHR and also NRT-LAX(stop 4 months)-HNL.  It’s possible to squeeze in a completely free trip to Hawaii by booking two international trips on the front end and back end.  For example, NRT-LAX-HNL then HNL-LAX-LHR.  
  • Cathay Pacific and Japan Airlines first class are relatively easy to book.  I tend to book my trips very far in advance and both these airlines have decent availability from the west coast to Hong Kong and Narita.  Japan Airlines is updating their first class on their NRT-LAX route in November and it looks awesome.
    Several JAL First Class seats on various dates if booked early.

    Several JAL First Class seats on various dates if booked early.

     

It is quite hard to assess the value of points and miles because people have different perspectives.  If you would spend $2,000+ for a business or first class flight, you would value points and miles at a higher rate.  On the contrary, if you wouldn’t spend over $2,000 for a business or first class flight you would value points and miles at a lower rate.  That is because you would have a lower point where you would be indifferent between holding points vs. cash.  I value my points and miles on the lower end of the spectrum because I am not willing to pay over $2,000 for a first class flight.  I’m not saying my valuation method is the only method, but it is reasonable to me.  

For the above example JAL flight, it would cost 125,000 miles to fly first class to Japan and back from LAX.  If I value AA miles at 1.8 cents then I would be willing to pay $2,250 for a first class flight.  Wait, that is contrary to my rule I talked about above.  However I would add a free-oneway first class flight from LAX-HNL and/or HNL-LAX, which I value at about $400-$500 each.  Thus, I would subtract that amount from $2,250 and it would be under $2,000 for the flight.

Since I increased my valuation of American Airlines miles from 1.6 cents per mile to 1.8 cents per mile, that would increase SPG’s point value because you can transfer 20K SPG points to 25k AA miles.  Therefore, 1.8*1.25 = 2.25 cents per point.  I think that SPG points yield a lot more value when redeeming for airline miles than hotels.  However if an SPG hotel is the only decent option in the city I am visiting, then I might consider it.

Conclusion: American Airline miles are the most useful miles in my opinion.  They are becoming harder to come by because the end of the 2-browser trick to obtain two Citi AA Platinum credit cards in one-day and also the devaluation of BankDirect, an online checking back that earns miles.  The airline industry is picking up, and my thoughts are that they are restricting the amount of airline miles available because airline companies are starting to sell more of their seats.  Also, with the merger of US Airways and American Airlines coming soon, I don’t think they want people to have thousands or millions of miles.  Earn and redeem American Airline miles and SPG points now before a possible devaluation in points and miles.

If you are need of either AA miles or SPG points, there is a current 50K and 40K sign up bonus for the Citibank Platinum AA card and 30K bonus for the SPG personal and business cards in the credit card deals section.

17 comments for “My New Valuation of American Airline Miles and SPG Points

  1. happy feet
    July 1, 2013 at 7:41 am

    Could I do SFO-HKG-HNL on a one-way ticket? TIA

    • July 1, 2013 at 10:34 am

      No you couldn’t because Cathay pacific doesn’t have a route to Honolulu. You could do hkg-sfo-JFK.

      • happy feet
        July 1, 2013 at 1:13 pm

        A follow up question— I plan to book my ticket for June 2014 from SFO to HKG. If I add JFK, I may travel during Christmas 2014. But I think the JFK flight is not bookable yet since it is more than 330 days in advance. Any advice?

        • July 2, 2013 at 1:03 am

          The free one way has to be before or after international leg. You can do sfo-hkg-JFK as an open jaw which is 135K in first.

  2. Josh
    July 1, 2013 at 9:47 am

    Another great airline use of SPG is transferring to LAN at 20k:50km. This is sufficient for 1 economy RT from LAX-LIM, a route which usually retails for $700 (often well over $1000).

    • July 1, 2013 at 10:35 am

      I believe they changed the ratio to 1:1.5

      • Josh
        July 1, 2013 at 10:38 am

        Dammit, missed that. Should have transferred at the old rate when I had the chance. :-/

  3. econjon
    July 1, 2013 at 10:53 am

    I don’t think you can route NRT-LAX-HNL. Via Pacific MPM is 5746

    • July 1, 2013 at 12:39 pm

      Yes, it exceeds MPM but it works if you try booking on aa.com with both flights being aa. Then you can call to change to JAL.

  4. Gaurav
    July 1, 2013 at 3:22 pm

    Rom, maybe I am missing something. Where is the 30k bonus offer for SPG?

    • July 2, 2013 at 1:04 am

      Sorry it’s 25K plus 5K for spending. So it’s really 25K or 30K after finishing spend.

  5. Paul
    July 2, 2013 at 1:21 am

    SPG? Come on. Those are lame points. Why not churn PRG for 2x and then have options of multiple airlines/hotels all at 2x? And they let you transfer in 1K increments, not highly limiting 20K increments. Or Inks at 5x?

    I really get tired of the pimping that goes on with SPG. At best you only get 1.25x on airlines (subject to restrictive transfer terms of 20K blocks). And SPG for mid/high tier hotels are ridiculous compared to Hyatt/Hilton. On the low end, Hilton and Carlson are much better.

    Reality is SPG is lousy for hotels, and mediocre to poor for airlines. And they have pathetic signup bonuses and only 1 card to earn points. All in all, a terrible program to put spend on. You’d have to be a fool to put spend on a SPG these days…

    Compare SPG vs PRG: 30K max signup bonus vs 75K max. 1x points on all spend vs 2x on bonus categories for PRG (gas/grocery), plus 15K MR bonus on $30K spend. So $30K spend at grocery will give you 75K MR (on top of signup bonus), while $30K spend will give you max 35K points if you transfer 20K to airlines. You get more than 2x more value from PRG and 2.5x the signup bonus when they have special offers.

    And then add in the transfer bonuses that Amex regularly has (like recent 35% bonus to British Air and current 20% bonus to Hawaiian) and it’s a no-brainer to put your spend on PRG rather than silly SPG.

    But I suspect SPG gets pimped because you don’t have a PRG affiliate link? :o)

    • July 2, 2013 at 3:45 am

      I think the PRG card is good if you can get a good sign up bonus. My post was focused on collecting aa miles. PRG can’t transfer to AA. There’s no complete answer for everyone. Depends on your travel needs.

  6. October 9, 2013 at 11:16 pm

    You should not throw away a lot of time with particulars.
    It’s very clear you’re making a beneficial point here.

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