US Airways is a member of the Star Alliance (not to be confused with the Rebel Alliance), a network of 21 member airlines that have partnered to offer service to virtually any location on the planet where folks actually fly to. In assessing the value of their frequent flyer program, known as Dividend Miles, we consider both the US Air and Star Alliance redemption schedules.
Key Assumptions for Calculating the Value of US Airways Dividend Miles
As in almost any analysis, we are required to make some assumptions in order to estimate the value of the USair Dividend Miles program. Here are some of the key ones:
- GetDebit needs market prices for various flight destinations to properly value Dividend Miles. As such, we rely on our Detailed Analysis of Flight Costs.
- US Airways offers both Mileage Saver and Standard Awards. Mileage Saver awards are limited in quantity and thus more difficult to find. Blackout dates can apply to both types of awards. Since Standard Awards are generally twice as expensive in terms of miles required, GetDebit assumes that all redemptions are in the form of Mileage Saver Awards. See the Rules of the Sky to learn more about how GetDebit handles partner redemptions.
- US Airways also offers off-peak awards at up to a 30% reduction in mileage cost; however, these awards tend to be available for only about 1 month per year, give or take, so GetDebit has decided not to explicitly factor them into our assessment. Let’s call them upside.
- Total non-cash penalty is 5%. Read Why does GetDebit Penalize the Value of Non-Cash Awards? for more information.
- Note that if you are a holder of either the US Airways Premier World Mastercard or World Mastercard (and pay an annual fee), and your card is in good standing, US Airways gives you a 5,000 mile discount off any award travel. For purposes of this analysis, we assume you are a card holder. Note this benefit applies only to owned and operated flights, not partner flights.
Bringing it All Together: GetDebit’s Best Estimate of the Value of US Airways Dividend Miles
The table below brings it all together-the miles required by route, the average pre-tax market-rate price for these tickets, assumptions around what routes are flown and in what proportion, and finally, any value adjustments due to the non-cash nature of the awards.
|From||To||Carrier||Award Type||Season||Miles Req’d||Pre-tax Mkt Price||$ value/mile||Travel %||Contribution|
|Post 5% Penalty||$0.0121|
You may be wondering, with trips from the US to EU/Asia on StarAlliance during the high season valued at something north of $0.0150 per mile, why didn’t we allocate 100% of travel to those routes/partners. Our reasoning was simple: it will be extremely hard for an individual to secure such awards during the high season on the partner network. While we believe it’s possible to do, it may not be realistic to assume you can always secure such awards.
The Final Analysis
As you can see from the table above, US Airways Dividend Miles are valued at about $0.0121 per mile. Feel free to read our article, Frequent Flyer Mileage Valuation Comparison, for a good side-by-side view.