Avios to launch ‘redeem your points for a discount on a cash ticket’?

I have mentioned before that I have it on decent authority that Avios will launch a scheme later this year to allow you to pay for all or part of a cash ticket with your Avios points.  I was there interested to see that some people have received a survey from Ipsos Mori asking for their views on the idea.

I was sent over some screenshots of the options that the survey laid out.  Respondents were asked for their enthusiasm about the following scenarios:

Avios

  • Redeem 5,300 Avios for a £40 cash saving on a Club Europe ticket (0.75p/Avios)
  • Redeem 9,000 Avios for a £130 cash saving on a World Traveller (Economy) long-haul ticket (1.44p/Avios)
  • Redeem 60,000 Avios for a £700 cash saving on a Club World ticket (1.17p/Avios)

The questionnaire said that the tickets will be treated as standard cash tickets and will therefore earn standard Avios and tier points when you fly.

Now, as ever, the devil is in the detail here.

I do not, for a second, believe that you will be getting 1.44p per Avios redeemed.  That would be ludicrously generous.  The ONLY scenario I can see where this would happen is if the number of Avios you could redeem was capped.

There are two ways BA could play this, as I see it.  At present, if you redeem your Avios points for a hotel stay, you get 0.58p per Avios of value compared to booking the same room for cash – I did a long post on this a while ago.

If you are able to pay the ENTIRE cost of a flight in Avios, the redemption rate will be low – probably the same 0.58p per Avios they use for hotel redemptions

If you are only able to pay a small part of the cost of a flight in Avios, the redemption rate can be a lot more generous, possibly above 1p.  You will still be paying out a lot of cash for your ticket, though.

BA seems to be considering both scenarios.  One of the questions, for example, is

‘If you were booking a flight for £500, how attractive would the option be of paying £370 + 9,000 Avios?’

However, a second question is:

‘If an easyJet flight was £100 and you could book the same flight on BA for 5,300 Avios, how attractive would this be?’

We need to see how this plays out.  My personal view is that BA should allow you to redeem for the full cost of a flight in Avios, even if this means a lower redemption rate per Avios point.  It will, for a start, stop people being able to claim that they can never use their Avios points.

For long-haul economy flights, the rates will actually look pretty attractive – it is very poor value at the moment redeeming for long-haul economy with their £375+ fuel surcharges.

Keep an eye on Head for Points for future developments on this!

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Comments

  1. From what I remember one of the first questions was how much is 10,000 Avios worth to you. I assumed it was then using that value but to be fair I didn’t work it out.

  2. I doubt very much they’ll go back to a true free flight using avios – that’s what they’ve just moved away from! There’s bound to be some form of cash payment involved.

  3. James68 says:

    I’d be very happy if you could redeem any amount of avios for 1p off a cash ticket, especially if you earn something back as well (obviously comparing to the price you’d pay if paying cash in full)

  4. Nathan Brandon-Bravo says:

    This is something I have done with Qantas before which wasn’t to bad.

  5. James67 says:

    Am I missing something here? Is this not just the other side of the ‘part cash and avios’ coin? Surely if this option was retained along with discount on cash tickets they would need to offer very similar values or one or the other would become somewhat redundant? The all avios, or part cash plus avios, must surely remain the more attractive option in most cases I would think because of the ability to change or cancel for relatively small fee. Many of the cash tickets people might end up purchasing would likely have zero or limited flexibility. It is difficult for me to perceive this as anything other than cleverly-disguised potential devaluation from BA.

    • Frenske says:

      Part cash and avios is only available on reward flights which have limited availability. This avios-for-money-towards-flights scheme suppose to be for all flights!!!

    • Yes and No.

      Avios redemptions in long-haul Y would become pretty pointless, unless the fuel surcharge was slashed. Better to use Avios to buy a cash ticket and have no availability issues.

      However, for Club World, the number of Avios required would be crazy under this new method – normal redemptions will always be a better deal, except in sales.

  6. I think these would be normal cash tickets with their associated availability and flexibility.

  7. Sinizter says:

    I don’t have a positive feeling about this change. This could be the route to a roughly revenue based way of redeeming avios. If this works out, they may remove the ability to redeem for business and first as it currently stands (for fixed avios) and make it purely based on fixed value per avios.

    I don’t see why it would be worth their time maintaining two separate redemption schemes with the requisite admin. In time, one will get chopped and it won’t be this model.

    • James67 says:

      Yes, that was what I was thinking but I forgot to add. It feels like revenue-based redemption which might mean, as Raffles and others have discussed, that revenue-based earning and/or elite qualification may be on the way also. All this, combined with recent frequent flyer and hotel devaluations, the credit card news etc points to a bleak future for our hobby. I think we best enjoy whats left of it now that we can because in the future loyalty may not pay, it might simply be best just to seek best value travel and accommodation from multiple vendors on a trip by trip basis. I’m largely doing this already for hotels following recent devaluations at IHG and Hilton.

    • Because it will stop people complaining about availability, and – assuming that the majority of people only redeem for, say, 25 per cent of the cost of a ticket – BA will do nicely out of it.

  8. ankomonkey says:

    It would be pretty sweet to redeem Avios for 99% of a cash flight, pay a very low cash amount and still receive full Avios and tier points. Surely, then, it’s very unlikely BA would allow/offer it.

    • Depends. Singapore Airlines, which has a similar scheme, only gives miles back prorata to the cash portion. Use miles for a 75 per cent discount, only earn 25 per cent of the usual miles.

      As I said, the devil is in the detail.

      If you could redeem unlimited Avios at 0.75p to 1p per Avios, including Club World sale fares, I’d be a very happy man!

      • pauldb says:

        I was going to mention that Singapore have recently introduced this. Having played around with a few bookings (BKK-SIN Y, SIN-SYD J) it seems they allow 100% payment with miles. The redemption rate appears pretty uniform but unattractive at about £5 per 1000 miles.

  9. I wonder how the companion voucher would work with this?

  10. knifeandfork says:

    I’m probably in a similar boat to our esteemed leader in that I’m lucky enough to be sitting on oodles of Avios and am growing increasingly hacked off at the dramatic contraction in US availability in J and F. I’d happily cough up a grand plus whatever avios if it meant I could book a seat.

    I’m watching this one with great interest.

    • You may be happy but plenty won’t be. As it used to be (and still is if you can find availability) you used to throw £1000 for WT+ Ticket and 25,000 Avios for Trans-atlantic J.

      Under this new model that would look like £1000 + 150000 Avios for the same thing. Not great for a family of 4.

      However, 70,000 Avios for WT Y with no taxes doesnt look too bad !!

    • Knifeandfork dont know if your BAEC Gold. But if you are I understand Golds can use 2 X Avios to get any seat released .. Would be interested to see where folk stand on the 2 X Avios Versus Avios for cash tickets and which is the most worthwhile.

  11. Richie says:

    Back to topic I personally would be happy paying 9000 avios for 130pounds off a flit, I value my avious at 1p so this gives me a 40odd % benifit , plus the huge bonus of still receiving tier and avious points, although if these are pro rata as suggested it makes no difference

  12. Off topic here.. But does anyone know of any Irish credit cards that earn avios, miles etc of any sort!? My coz searching! Or does UK amex accept ROI address in applications? Thanks