United MileagePlus is currently offering 40% off on the purchase of additional miles in its MileagePlus program. On the one hand, 40% off is pretty good. I like 40% off. But on the other hand, it’s 40% off of an already ridiculous price. Kind of like buying clothes at Banana Republic — If you’re not saving at least 40% then you’re paying too much.
United Airlines normally sells its miles at 3.5 cents each plus an additional 7.5% federal tax. Wow. I used to value United’s miles at roughly 2 cents each before their devaluation, but I don’t think they’re worth anything close to 3.5 cents these days. At the discounted price, you’re looking at paying roughly 2.26 cents per mile including taxes through February 17.
Compared to other recent offers from domestic U.S. carriers, United’s offer is both overpriced and generous in the number of miles you can purchase. Typically programs limit their offers to between 50,000 and 100,000 miles. United is letting you buy up to 150,000 miles and awards the largest discount on purchases of as few as 40,000 miles. But it’s still much more than the prices under 2 cents charged by US Airways and Alaska Airlines. Even American was briefly charging only 2.11 cents, and that small difference adds up over tens of thousands of miles.
You can still find some good values on the new award chart by buying miles, especially since I often use my United miles for medium-haul domestic awards where I’m choosing between 25,000 miles or $500+. Or, you may be in a situation where you are close to the number of miles for a bigger award and need to top off your account. A few thousand miles that make the difference between trip or no trip can be worth much more than 2.26 cents each. United seems to know this by offering a smaller discount for purchases under 40,000 miles. Better make sure it’s a good award!