Should you buy JP miles with a 40% bonus?

Jet Airways is running a promotion (frankly, one I hadn't heard about until this morning) to sell JP miles at a 40% bonus, for purchases exceeding 30,000 miles. The offer is valid for miles purchased up to 19 February 2016. If you're interested, here's the link to the landing page. But the question really is, should you buy them?

When I wrote about my theories around miles and points valuations, I hardly expected an opportunity so early, to test out and prove one of those theories. But since we have it now, let's see if buying these miles makes sense.

The promotion itself is as follows:

• for purchase of 1500-4999 miles: earn 10% bonus miles
• for purchase of 5000-14999 miles: earn 20% bonus miles
• for purchase of 15000-29999 miles: earn 30% bonus miles
• for purchase of 30000+ miles: earn 40% bonus miles.

Simple as it seems, note the following: Jet Airways sells JP miles at Rs 1.25 per mile. Plus taxes @ 14.5%, so that makes it Rs 1.43 per mile, all in. At this price, purchasing 30,000 JP miles would cost you Rs 42,398, and earn you a bonus of 12,000 JP miles. Which works out to a rate of Rs 1.02 a JP mile. 

If you use a Jet Airways co-branded credit card, such as the Jet Airways American Express card, to earn 16 JP miles per Rs 150 spent, that will bring down the cost to Rs 0.92 a mile, because you'd earn a further 4,580 JP miles. If you buy fewer than 30,000 JP miles, the effective cost per mile will naturally go up.

So here's the summary:

In my January 2016 valuation of points and miles, I valued JP miles at Rs 0.72 per mile. At this rate, purchasing JP miles at a net price of Rs 0.92 a mile doesn't seem to make sense. 

Yet, consider this:

• There is no way one could earn JP miles at a cost per mile (CPM) of Rs 0.92, by flying. Fuel surcharges alone would come to far more than that, plus of course, the ticket price. In general, butt-in-seat miles are typically earned at a CPM of no less than Rs 5. 
• Similarly, using a credit card (such as the Jet Airways Amex card that earns 16 JP miles per Rs 150 of spend with Jet Airways) will require a spend of Rs 393,750 to earn the same 42,000 miles, which is quite a lot of spend involved. And the spend requirement would be higher on a card that earns fewer JP miles per Rs 150 of spend.
• The key takeaway for me on valuing points and miles is that the value of a mile is one where you're indifferent to using miles or cash. So the value of Rs 0.72 a mile (based on usage value) is an unfair comparison to the cost of Rs 0.92 a mile (based on purchase value).
• JP miles are far more valuable for international redemptions than domestic ones, though availability can be iffy quite often.
• Finally, miles at the margin (when you only need a few more miles for an award) are always more valuable, which means you'll probably be more inclined to pay a higher price for those additional miles.

So would I buy JP miles at Rs 0.92 per mile under this offer? Personally, no. I've currently got a rather large stock of JP miles, and so buying more miles at this price (or at any price) doesn't make sense for me. In any case, I'd never buy miles to stock up on them - there would always have to be an imminent redemption opportunity on hand. However, I'd argue that it is extremely difficult - if not impossible - to buy miles at much cheaper than Rs 0.92 a mile. 

So if you're looking at that slightly elusive award ticket using JP miles, this is probably a great opportunity to top up your JP miles balance.

Would you buy JP miles at this price? If not, what is your walk-away price to buy JP miles?