I ran an article yesterday on the new Iberia Plus / Groupon promotion which allows you – in a fiddly way – to buy Avios for around 1.05p each depending on quantity.
Coincidentally, British Airways also chose to launch an aggressive ‘buy Avios’ offer yesterday.
If you don’t have a 0% FX fees credit card, this deal is virtually as good as the Iberia Plus offer. It is also substantially less complex – with the Iberia / Groupon deal, you have a small but very real chance of not getting your points credited without a fight!
Let’s take a look at the BA ‘buy Avios’ deal in detail.
And here are a few price points:
5,000 Avios – was £95 (1.9p), now 7,500 Avios for £95 (1.26p)
10,000 Avios – was £175 (1.8p), now 15,000 Avios for £175 (1.16p)
20,000 Avios – was £335 (1.7p), now 30,000 Avios for £335 (1.12p)
50,000 Avios – was £815 (1.6p), now 75,000 Avios for £815 (1.09p)
100,000 Avios – was £1,615 (1.6p), now 150,000 Avios for £1,615 (1.07p)
The cheapest price is therefore 1.07p per Avios point.
Is this a good deal? Well, it is fair to say that you won’t lose money at this level. I have a spreadsheet showing the last 4.5 million Avios I redeemed and my average value is 1.1p per point.
This is skewed by a few things though:
I do quite a few ‘double Avios’ Gold Priority Award redemptions to force open seats on full flights. These drag down my ‘pence per point’ valuations.
My household generates 2 x 241 vouchers each year but we tend to do 2 or 3 long-haul trips per year, each for 4 people. We only use a 241 on 33%-50% of our long-haul redemptions which, again, drags down my ‘pence per point’.
The cash value I place on an Avios redemption is what I would realistically pay for a similar flight. This means that I generally value Middle East business class at £1500 and longer routes at £1750 return. You can normally get a ticket for this although not necessarily on BA. You may prefer to use a higher or lower number.
Even if you agreed with my methodology, it would be crazy to pay 1.07p per Avios if you were going to redeem them for 1.1p. Avios points are obviously not as flexible as cash and are issued by The Central Bank of IAG which, frankly, has an inflationary track record to rival many third world countries. (And even in countries of high inflation, you can usually spend your cash whenever you want – unlike an Avios point.)
Personally, I would be targetting somewhere closer to 0.66p before I would be a speculative buyer – but that is based WHOLLY on my personal circumstances.
This is my long ‘what is an Avios point worth?’ article (click here) which takes a more scientific view based on different ways you may spend your points. These valuations tend to come out at nearer 1.5p in the best cases. On this basis, paying 1.07p – with no more effort required than picking up your credit card – may work you.
If you are only topping off an account with the last few thousand you need for a redemption, the price per point doesn’t really matter anyway.
Before you buy, though, think about the options. Could you or your partner take out an American Express Preferred Rewards Gold card instead? The card is free for the first year and you’ll get 20,000 Amex points (= 20,000 Avios) when you spend £2,000 within 90 days. Let me refer you via refer-a-friend (details in this review) and you’d get 22,000 Avios. That is a better deal than spending around £250 buying points under this deal.
You need to buy before midnight on Monday 5th December. The link to buy is here.