Avios Redemption University – Lesson 11 – Low tax Avios redemptions on Iberia

The “Avios Redemption University” series is a good starting point for beginners, although I hope everyone will learn something from them.  Click here to see the other articles.

When an Avios collector in the UK looks for a long-haul redemption, British Airways is the obvious choice of airline. However, the taxes and charges can often be very high – up to £500 per Club World seat.

Two ways around the taxes problem are to redeem on Aer Lingus and airberlin, both of whom are the subject of future articles. Often overlooked in the hunt for low taxes, though, is BA’s sister company Iberia. Taxes on Iberia flights are often a fraction of those charged by BA.

Iberia is extending its UK connections network.  Manchester to Madrid and Edinburgh to Madrid were recently launched.  This makes it a lot easier to use Avios to connect to an Iberia flight in Madrid.

An obscure route network

Iberia has been through a substantial restructuring since being bought by IAG, the parent company of British Airways.

Losing money at the time, the airline cut flights to a lot of places you might want to go (Montreal, Toronto, Washington, Johnannesburg) to add extra flights to places that are probably not top of your list.

To IAG’s credit, Iberia has been turned around.  16 new long-haul aircraft – 8 x A330’s and 8 x A350’s – are on order for delivery through to 2020.   There is a decent new business class seat – see below – and the long-haul network is expanding again.  The most recent addition was Havana.

The other non-European Iberia destinations are:

  • Africa – Accra, Algiers, Casablanca, Dakar, Lagos, Luanda, Malabo (Equatorial Guinea), Marrakech, Oran, Tangier
  • USA – Boston, Chicago, Los Angeles, Miami, New York
  • Americas exc USA – Bogota, Buenos Aires, Cali, Caracas, Guatemala City, Guayaquil (Ecuador), Lima, Mexico City, Montevideo, Panama City, Quito, Rio do Janeiro, San Jose (Costa Rica), San Salvador, Santiago, Sao Paulo
  • Asia – none
  • Caribbean – Havana, Santo Domingo (Dominican Republic)
  • Middle East – Tel Aviv

All of these are flown from Madrid.  Not all of these are long-haul routes – Lagos is flown with an A319 short-haul plane for example.

Improved seating coming on line

Historically, Iberia has had no First Class and a very poor business class seat.

The great news is that Iberia has now installed new fully flat seating across most of its long-haul fleet – albeit there will still be a chance, during 2016, that you end up with the old ‘sloping’ version.

New flat Iberia business class

I was lucky enough to fly it on a Madrid to London flight as you can read (and see) here.  Iberia runs a few London to Madrid services a week with long-haul aircraft and flat beds in business class because it needs the cargo capacity offered by the bigger aircraft.

How to price Iberia rewards

This isn’t simple following the Avios changes in April 2015.  What a surprise.

Iberia has its own reward pricing chart with its own peak and off-peak dates:

Iberia chart PNG 2

This chart is NOT the same as the British Airways chart:

Redemption chart 2It NEARLY is, but not quite.

Let’s take New York as an example.  Both British Airways and Iberia price New York as a Zone 5 redemption.  However:

British Airways charges 100,000 Avios off-peak and 120,000 Avios peak for a Club World flight to New York

Iberia, as you can see above, charges 68,000 Avios off-peak and 100,000 Avios peak for a Business Class flight to New York

There obviously are not many destinations which are served by both BA and Iberia, of course.

A word about peak and off peak dates

Just to make life even more complex when comparing prices with direct British Airways redemptions, Iberia has its own list of peak and off-peak dates.  This is different from the British Airways list.  Here is the chart:

Iberia peak dates

October half-term, for example, is a peak week for British Airways redemptions and peak pricing is in force.  Iberia does not treat this week as a peak week.

And here is the really weird bit …..

ba.com is using the Iberia pricing chart to price Iberia rewards.

Here is the proof from ba.com (the £323 taxes figure is now £309 – this is an old screenshot):

rsz_iberia_avios

This flight – if priced using the British Airways chart used for BA and all other partner airlines – should cost 120,000 Avios.  However, ba.com is pricing it using the Iberia pricing chart and applying the Iberia off-peak calendar.

Of course, you should still not book this flight on ba.com because of the way Iberia calculates taxes when you redeem on iberia.com.

Iberia – the home of low taxes (but only on the Iberia website!)

Iberia Plus does not charge the full range of airport taxes and fuel surcharges imposed by ba.com.

Let’s look at Madrid to New York in Business Class, return. Iberia, when you book on iberia.com, will charge 68,000 Avios plus £135 on an off-peak date.

A BA redemption from London to New York (via ba.com on a BA plane) on the same route in Club World costs 100,000 Avios plus £494 on an off-peak date! That is, by any stretch, a big difference. It makes it well worth heading to Madrid to start your trip if you are price concious.

More interestingly, if you try to book the Iberia Madrid to New York flight on ba.com using BA Avios, it will charge you £309 of taxes! This is for the SAME Iberia flight which costs only £135 of tax on iberia.com using Iberia Avios.

Now, of course all is not plain sailing:

  • From the UK, you need to fly to Madrid. Howevever, if you are not based in London you will be taking a connecting flight anyway. And the saving probably justifies not flying direct from London.
  • The London to Madrid flight cannot be booked on the same itinerary as the Madrid to New York flight or you will be obliged to pay UK Air Passenger Duty at the long-haul rate. Since you will have separate tickets, IB is not obliged to look after you if you miss your long-haul flight – although if you fly IB from London, it is very unlikely they would abandon you if the delay was down to them.
  • A flight from London to Madrid, return, costs 15,000 Avios and £35 in Economy – but that is hardly making a great dent in your £359 saving.
  • Iberia reward availability is not great as they fly far fewer seats to New York than BA

Note that, to get the £135 of taxes, you must book on the Iberia website and use Iberia Avios. If you try to book this itinerary on the BA website, BA will add fuel surcharges and other ‘random stuff’ which adds up to £309! This means that you need to open an Iberia Plus Avios account.

Most importantly, you need to open it 90 days before you want to book, since you cannot transfer BA Avios or avios.com points into Iberia Plus Avios if the IB account is under 90 days old. (And this little wheeze is probably why.)

Your IB account also needs to have had an Avios earning transaction put through it (credit a flight segment or a car hire or hotel) to class it as ‘active’ and thus qualifying to receive incoming transfers. If you cannot put a flight or hotel stay through it, you could transfer some hotel points or Amex Membership Rewards points.

Conclusion

There is no doubt that the Avios changes in April 2015 have made the situation with Iberia redemptions even more confusing that it once was.

The bottom line, though, is that you can make substantial savings in tax – and sometimes in Avios too – if you are willing to fly the much improved Iberia business class instead of British Airways Club World.

More on the new BA First Class 'Concorde Bar' in Singapore, including photos
Bits: 25% off BA from Gatwick (from £31!), new Hilton in Cambridge, double Kabbee points and £5 credit
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Comments

  1. I booked a J redemption on Iberia MAD to Rio. Surprisingly it was cheaper to book as two one ways with the outbound Madrid to Rio cheaper on Iberia and the return Rio to Madrid sector cheaper on the BA website. Iberia also add a £5 credit card surcharge for reward bookings whereas BA don’t.

    • Interesting Alan, were you not returning directly to London? Would that be possible? Sounds a promising option for future US flights. Problem is we cannot us our 241 voucher.

      Rob, remember the punishing cancellation and change charges at Iberia, seem to remember them as worthwhile mentioning, or have they been standardised with BA?

      • oneworld redemptions used to be non-refundable and non-cancellable and still are, AFAIK. Iberia redemptions can be cancelled OK.

      • I booked a separate PNR for EDI-LHR-MAD so the IB sectors are just single flights from and back to MAD. Not much of a saving booking one on BA but think the whole trip in J (positioning flights excluded) was £85.

  2. “The great news is that Iberia has now installed new fully flat seating across its entire long-haul fleet”

    This is not the case. I am booked on LAX-MAD in May 2016 with the old style (170 degree) seats on the A342. Plenty of info re the routes using the old seats here.

    http://www.flyertalk.com/forum/iberia-airlines-iberia-plus/1448998-new-business-plus-class-a330-300-a340-deployed-2013-2014-consolidated.html

    • Apologies. I swore I had seen an article which said they had finished the conversion so I didn’t ‘fact check’ that line.

      • Same for my in-laws, the outbound flight to Quito is old style business seats. These are only some A340’s.

        So the way to spot it is via the specific aircraft type. Iberia list these as:-

        A340-200 = old business seats
        A340-500 = new business seats

        Another point (not sure if previously mentioned) is that avios bookings with Iberia allow for free seat selection immediately – inc extra leg rooms seats in economy.

    • We just had flights back from Quito on the old sloping bed so definitely not completely flat-bed at the moment. And, despite a timetabled connection of 1 hour in Madrid, Iberia failed to transfer our luggage to the MAD-LHR flight. Still waiting for it to arrive 3 days later. Iberia customer service and baggage enquiries appear clueless on when it will actually get here. When we logged the luggage as missing the BA baggage rep at LHR said he never has an Iberia flight arrive without someone missing their luggage.

  3. There was a comment yesterday about the ability to save APD on the Amex 2 for 1 voucher by starting your trip in Jersey. This was the first I’d heard about this, and think it would be a useful addition within the Avios University number 6 edition.

    • The snag with that, of course, is that you need to get to Jersey and the Jersey flights are from Gatwick.

      You need to get to Gatwick, fly to Jersey, fly back, transfer to Heathrow and then – within 24 hours of arriving, to avoid APD – depart on your long haul.

      Your net saving would be pretty modest once you’d knocked out all of the incremental costs.

      You’re right, though, I will edit this into the older article.

      • I’d have huge respect for someone who did that just to save a few quid, much in the same way I’m in awe of the guy who flew to Spain to hire 37 cars in 48 hours.

    • More potential for problems! Delays, missed flights/cancelled flights… BA don’t need to do anything to help you if they are all on separate tickets.

      However, savings are there to be had if you can do it, also of course the extra tier points might come in handy

    • Surely 241 can only be used to/from UK (which does not include Jersey)?

  4. Well this *is* interesting. Hmm.

    Of course it does depend on how much extra time and money routing via Madrid will cost. No-one flies there from my local airport, which would have made it irresistible. I probably won’t have enough Avios for a business class return and a RFS to Madrid, and I’d want to build in at least a night in Madrid on the outward to make certain I could make the JFK flight. But even if that ended up costing a couple of hundred quid that would still be a bit cheaper than BA/Virgin taxes and fees.

    It would mean taking at least an extra day off work, though.

  5. One interesting point which I didn’t highlight in the article is that fuel surcharges HAVE come down a bit on long haul. The numbers I quote for taxes are all lower than when I last wrote about this topic in 2013. Not by a lot, admittedly, but £50 or so.

  6. Tiny correction, Mexico City is in North America 😉

    • Mexico City is in CENTRAL America.
      By the way, the annoyance with IB Plus, is that they need to sort out their log in system, it is such a pain in the ass!
      I got so many avios in there that I can’t transfer into BAEC because I need to call the whole world and his wife to get something done.

      • Don’t be silly. Wiki:
        Mexico (Listeni/ˈmɛksɨkoʊ/; Spanish: México [ˈmexiko] ( listen)), officially the United Mexican States (Spanish: Estados Unidos Mexicanos, About this sound listen (help·info)),[9][10][11][12] is a federal republic in North America.

        Or just look at a map

      • Stu is correct. Mexico is in North America.

        On a more relevant note, as someone who is new to the game and has around 85k points, all the booking variables seem ridiculously complicated. I’m actually scared to book something as I know I’ll balls it up!!

      • BlackberryAddict says:

        Mexico is geographically in North America, but culturally in Latin America 😉

        And if we are getting picky, all the Central American destinations (San Jose, Panama, Guatemala City, San Salvador) are Central America, not South America.

        Iberia also fly to Medellin and Cali (one stop).

        But Lagos is definitely in Africa, not South America.

        • Lagos is definitely in Europe – Portugal to be precise.

          Yes its a slow day for commentary on HfP.

          • Perhaps I should do a quiz where you have to correctly price up 3 random Iberia itineries and then state whether or not they would be cheaper (taking into account both Avios and taxes) than a comparable BA redemption booked for the exact same day, factoring in the differences in the peak and off-peak calendars between the two airlines?!

            I still have that Virgin Atlantic onesie taking up space at home …. my wife is getting grumpy about it :-)

  7. Raffles, you state in the article that BA would charge you 309 GBP for the taxes on a Madrid-New York redemption on Iberia – but your screenshot shows 323! Which is correct??

  8. Hi just to add to the list of long haul flights to Africa above, IB also flies to Lagos, Nigeria which is over 5hours flying time BUT use a small A319 which beggars belief…..NO flat bed in business especially if you are on the tall side

  9. BlackberryAddict says:

    I’ve used IB in the past to fly young master BBA to Lima. Separate ticket to MAD (in economy), and then on to Lima in business. The early flights from LHR connect quite nicely to the noon departures from Madrid, and BA checked his bag through (although IB managed to loose it in MAD).

    I also booked it as two one ways, because on the way back you can then book it straight through to LHR, which means you are protected on the connection. You can also book the connecting flight in economy, and save a few more Avios

  10. I’ve now been sent a full Iberia route map (not from Iberia, because they don’t seem to do one!) and have made a couple of additions to the list of destinations.

    • Would you please post it?

      • I can’t, it is copyright. It comes from a service which subscribers pay substantial sums to access. As HFP gets bigger I need to take this sort of thing seriously, unfortunately.

        • HI Raffles, what is the name of this service? EF?

          Iberia CS: I called this morning and I have to thank the rep was amazing!! :-) welldone!
          Though I have serious problems with accessing the website on pc, at first it says I am from Germany even with a UK IP , after login it into IB+ crashes and says I am not authorized to proceed or something like that! and I am not German and do not use German language at all!! :-(

          OT: does the Economist subscription auto renew or not? mine expires tomorrow and I need to know if I should action now to cancel it. there is no way to know unless i call them.
          thanks

          • No idea, the guy told me it came from a subscription service via his office!

            Economist – don’t know, gut feeling is that it will renew but they would refund the 2nd year anyone if it did get charged and you didn’t want it.

          • BlackberryAddict says:

            idrive: Drop me a pm on flyertalk

  11. If anyone is looking to earn some avios (400) in a new Iberia account so they can buy or combine avios there is a reasonable buy wine promotion here 6 bottles of reserva rioja for £40 delivered with 400 avios from Iberia via vinoseleccion (no wine club membership required)

    https://www.vinoseleccion.co.uk/iberia/coleccion-olarra/MicroSite.aspx?lang=EN

    • Covering this tomorrow!

      • Then don’t forget to include that new members will also get another 200 Avios bonus for using an Iberia partner within 45 days of joining

        • Is that the deal? Tried to find this but had no joy.

          • 200 Avios will be put in your account if you fly with any Iberia Group or oneworld Alliance, sign up to a service with any of the Iberia Plus Programme Partners or buy Avios. Avios gifts and transfers and transactions between Combine My Avios accounts are not included as part of the 200 promotional Avios. The Avios you get in the promotion to take up an Iberia Sendo card will count towards the 200 promotional Avios, along with transactions carried out over the 45 days after joining the Programme. 200 Avios will be added to your account once we check that you have taken up the transaction. Take-up time is up to two months after contracting the transaction.

          • My wife got her bonus 200 Avios 2 days after sending over some MRs.

    • Fair price, the Cerro Añón Reserva 2009 is £7.34 elsewhere and the Ondarre Reserva EUR 8 without UK delivery, ie together almost exactly £40, but the Vinoseccion offer includes delivery + the Avios (=£4 discount). Better quality than most £5 plonk from UK supermarkets – so a quid extra a bottle for higher quality & activating the a/c.

      PS you can still get 400 Avios on Iberia by signing up to the Hailo app.

  12. Colin JE says:

    Thanks Rob for an interesting article.

    Check out band 6 Full Fare Economy on Iberia chart. Is that 375,000 miles? !!

    Next time I fly to Madrid I’ll definitely book through Iberia. Not sure about the hop to Madrid for transatlantic though, to save about £200 quid. Having said that, I’m moving to Edinburgh so there’s not much difference between having to hop to Heathrow than Madrid.

    • Colin the difference is that in Heathrow you get Rewards points;-) i would prefere a short hope and a long rather than a medium and a long flight for an atlantic flight. but of course if you find a deal there is no choice than to accept!;-)

      Bye the way yhe article is very useful i just have to play a bit with the booking system;-)

  13. EvilGazebo says:

    We flew the “new” IB J prodict MAD-MIA a couple of years ago on an A330 redemption for a family of 4. Never flown BA CW to compare but we loved it…..

  14. Katy storie says:

    Hi, do you have an article on how to transfer BA avios into Iberia? I have credited all leclub Accor points to Iberia already and it has been open 90 days but I have a healthy amount of BA avios and I’m looking to book a family trip to florida next summer and it may well be the Madrid to Miami flight is a good option?

    • Check out the last Iberia articles, when you,log in it gives you the option to transfer either way in or out, but you have to scroll right to bottom of page to see the combine my avios bit in very small writing! Good luck .

    • Combine My Avios on ba.com should work. If it throws up an error message, go avios.com (assuming you have an avios.com, or open one) and use CMA to move Avios from BA to avios.com. Then do a 2nd transaction from avios.com to Iberia. That generally works. It is buggy though.

  15. So many options with Avios, it’s difficult to cover them all (or remember them all in my case!!) :)

    Is it possibly worth a mention / reminder of the direct MAN – MAD Iberia service in this article? (which may be expensive normally for all I know, but could be a good use of Avios for a direct service)

    (I’m being somewhat lazy – I’m only suggesting it as I can’t recall the exact details of the service – but I know you’ve mentioned it before. It could be once a week for all I know 😀 someone might appreciate a reminder though) :)

  16. Just had Vinoseleccion on the phone arranging delivery for tomorrow

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