Don’t buy Lifemiles at 2 for 1!

I take a big, deep breath and talk about Lifemiles again.  Last time around I made a lot of new friends and enemies so I am trying to keep this one educational, informative and helpful.  There is going to be a twist in the tail here, which to help keep under the radar I will be sending out via email.

Lifemiles, the Frequent Flyer program from Avianca offers great value for travel on its Star Alliance Partners.  A ticket of 12.5K can take you from places like New York to Los Angeles, or elsewhere in economy each way, or 25K in Business class.  The difficult thing with this program is getting access to the miles without flying ‘bum in seat’.

There is an Avianca Co-Branded Credit card with a 20,000 mile signup bonus on first use, and 1:1 earning ratio which would work nicely with a Vanilla/Bluebird strategy.  If you are interested in it I have an affiliate link on the 5th page of my travel credit cards here: Travel Credit Cards

Another good way to get hold of points is to buy them from the Lifemiles.com website.  The price to buy 1000 miles is $30 and goes up in level increments from there.  So if you were to buy 50,000 miles it would cost $1500.  For the month of December they are offering a 2×1 promotion on buying miles, so you could buy 100,000 for the $1500 fee, at a price of 1.5 cents per mile.

These 2×1 buy promotions appear periodically, and when they do most Lifemiles aficionado’s stock up on them to bolster their accounts, however, doing so is a risky strategy that I would not advocate, because Avianca has already devalued their program twice without warning – what’s the saying ‘fool me once shame on you, fool me twice, err and I can’t be fooled again’?  Not only can prices of award redemption increase without warning, sometimes routes change and go away, so buying for future plans is a very risky play, and totally unnecessary in my opinion.

Buying Miles at Time of Booking

Lifemiles allows you to buy miles at time of booking, so if you have that 25,000 award ticket from New York you can opt to use less miles for a cash fee, similar to the BA Avios program.  This is a really interesting concept, because it means you don’t have to buy and hold enough miles for your reservation in advance, though the costs aren’t exactly the same.

I have noticed some real ‘quirks’ with the Lifemiles Award program, many things within it do not make a lot of sense, but are rather interesting to take advantage of.  One of them occurs here, within the buy miles at time of booking page.

Note, that you cannot buy all the miles required, you need 10,000 in Business Class (buy up to 15,000) each way and 5,500 in Economy Class (buy up to 7000) again, each way per ticket.

Quirkiness: The price of buying the miles has no logic to it whatsoever – creating value ‘sweetspots’.

Here in the example of a person toggling between miles and cash on a Business class award the prices drop as the quantity increases, though not in a linear scale.  Furthermore, the prices start to creep back upwards at the top end, with 14,000 and 15,000 miles costing more.  I think this will catch out a lot of people who will take the option to reduce the miles required to the minimum of 10,000 and ‘buy’ the remaining 15,000 at check out.

It’s important to note that at 12,000-13,000 range you are getting that magic number of 1.5 cents each, which is as good as this ‘must jump on deal’ of 2×1 purchasing.  The difference though, is that if you buy them at checkout then:

1. You aren’t loaning Avianca your money for free whilst you wait to book your trip (opportunity cost).
2. You are no longer exposed to the risk of a devaluation.

It is more interesting to look at the Economy award pricing in tandem with Business class, because you are able to buy the same number of miles (though this time capped at 7000 max per ticket) for a different pricing level than if you were buying the business class ones… so I thought to test something out, buying multiple coach tickets and cancelling, however doing this creates a different value range again, and not in our favor.

Here is an example where I try to book a 100K award in total, either as 4x Coach or 2 Business Class RT journeys, the price per point changes again, against our favor:

How to benefit from this strategy

Whichever way you look at it, your best option is to hold for as little time as possible, thankfully Lifemiles allows you to search for your space without having the miles in your account – so if space is showing open what I would do is buy the minimum miles to hit the sweet spot on your award.

Example: I need 50,000 for Business Class Roundtrip for JFK-LAX

1. I have zero miles – I check space and see it showing as open on my dates.
2. I buy 24,000 lifemiles at 2 for 1 rates costing me $360
3. I go back to the booking with my 26,000 miles balance and I check out, and select pay with 24,000 of my miles plus buy another 26K at checkout, this triggers the sweet spot sale price of 1.5 cents each for $390.

The extra step here of only buying 24,000 initially means I have less money in play, and if in the interim between my finding space and buying the miles it should vanish on me I am only left holding 24,000 miles and keep hold of my $390.  Now, in some regards these are now orphaned miles until I can locate alternative dates, but in doing so I am at least able to hold onto my own money rather than loan it to Avianca, and also I am just as able to book the flight again next time around as this.

Some people might say that you should buy the miles first, so there is no chance that the award space will vanish, but that is silly, since you shouldn’t buy any miles if there is no space available so checking that it is actually a viable investment by looking for award space should always be your first stop.

 Conclusion

• There is great value in Lifemiles points at 1.5cents each if you need them to get somewhere.  But you should never hoard points.
• Lifemiles has devalued twice recently without any warning, do not be caught with a high balance.
• Routes can vanish.
• Buying points at checkout can get you the same 1.5 cent value, without having to jump on a time limited deal like this and lock up cash.
• Playing the buy points at checkout strategy allows you to keep as low as 40% of the required balance in Lifemiles, however, if you keep slightly above that, so you are looking for 13000 miles per business class leg or 6000 miles per economy class leg you will get a slightly better value per mile – this is of course offset by the risk of holding more miles.
• You can get 20,000 lifemiles plus 6000 on the Anniversary of the card for the Avianca Credit Card (card is on page 5 and pays me a commission) for an annual fee of $80 which is waived in the first year, this could be an alternative route to create your minimum holding balance without risking cash to buy miles.