When did BA hike the taxes on long-haul US economy redemptions?

18 months ago I wrote an article which tried to debunk the myth that long-haul Avios redemptions in economy / World Traveller are always a bad deal.

I compared the cash and Avios pricing for flights in August, five months ahead.  Yes, there were some dud deals in there, but there were also some good ones.  You were getting 1.37p per Avios to Las Vegas, 1.28p per Avios to Hong Kong and 0.92p per Avios to San Francisco.  I would be very happy with any of these.

I was never going to be able to recreate those numbers.  When I last did this analysis, in 2016, half of August was classed as off-peak for Avios redemptions.  This is no longer the case.  Whilst prices surge in August on holiday routes, you are now committed to paying peak rate Avios.  Even without a tax rise, economy redemptions would never be as good value.

I decided to rework the exercise this week.  What I found surprised me.

British Airways has aggressively hiked the charges on World Traveller Avios redemptions to the United States over the last 18 months.  US destinations have seen a whopping £70 rise in ‘taxes and charges’.

Other destinations have also seen increases but not by as much – usually £20 – £30 return.

Some of this increase will be linked to the fall in the value of Sterling, of course, but not all of it.  Redemptions to Barbados, where the currency is pegged to the US$, have hardly gone up at all.

This is at a time when headline fares have actually come down.  Put these two factors together and long-haul economy Avios redemptions again look like a complete disaster.

(Short-haul economy BA redemptions in Euro Traveller remain a good deal thanks to Reward Flight Saver.  By capping taxes on European flights at £35 in Economy / Euro Traveller, you will usually be getting around 1p per Avios of value.  That’s OK.)

This is what I found:

British Airways BA 787

Here is a sample of British Airways pricing from their Low Fare Finder tool.

These are the CHEAPEST economy return tickets available during June 2018 at the present time.  Remember that these flights may be at inconvenient times or inconvenient days of the week.  I compare the cash cost to the ‘Avios plus taxes and charges’ cost.

New York – £389 or 26,000 Avios + £370

Miami – £461 or 32,500 Avios + £370

Las Vegas – £908 or 32,500 Avios + £395

San Francisco – £592 or 32,500 Avios + £396

Barbados – £508 or 32,500 Avios + £278

Mumbai – £492 or 32,500 Avios + £318

Hong Kong – £507 or 39,000 Avios + £340

Singapore – £618 or 45,500 Avios + £347

The ‘pence per Avios’ score comes out like this:

New York – 0.07p!

Miami – 0.28p

Las Vegas – 1.58p (but the cash price seems oddly high compared to SanFran below)

San Francisco – 0.60p

Barbados – 0.71p

Mumbai – 0.53p

Hong Kong – 0.43p

Singapore – 0.60p

These results are all very, very poor.  Las Vegas is the only possible exception but a cash price of over £900 for June 2018 seems weirdly high and I would expect it to come down.  I do say consistently on Head for Points that I value my Avios at a very conservative 0.75p but even at this level there is no point in redeeming for any of the routes above.

Part of the reason why these deals are now a lot worse is due to the increase in taxes.  This is how the ‘taxes and charges’ compare with quotes obtained in March 2016:

New York – was £301, now £370

Miami – was £301, now £370

Las Vegas – was £327, now £395

San Francisco – was £327, now £396

Barbados – was £271, now £278

Mumbai – was £297, now £318

Hong Kong – was £314, now £340

Singapore – was £320, now £347

For completeness, I should remind you that there are two caveats to this analysis.  First, the prices I quote above are the cheapest possible flights BA has during June 2018.  With Avios you might get a better timed flight that would cost more for cash than the prices I show.

Secondly, Avios tickets can be cancelled for a £35 fee with the Avios and taxes refunded.  There are scenarios – I have been in them myself – where you may accept getting a poor deal for your Avios because you want the flexibility to cancel or change your flight for some reason.

In general, however, long-haul World Traveller flights have again become very poor value for money.  At least Head for Points readers know this and will avoid them.  The bigger problem is the bad image that this gives to newcomers to the Avios programme, because the first thing they are likely to price up is a long-haul economy flight.

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Comments

  1. Concerto says:

    I call them bogus surcharges! It annoys me that they think we are stupid enough to not see what bad value Avios has become. With airberlin gone, I have a lot less reason to use my Avios.

  2. Can I make a suggestion for an edit to the HfP Style Guide? Can any referral to taxes in these circumstances be put inside inverted commas? E.G. “taxes”. With a short sentence at the end of the article describing them accurately?

    Us regular readers know they are not taxes but made up BS charges designed to extract extra revenue out of loyal flyers, but as this blog grows and new (and inexperienced) readers come on board, it’s unfair for them to think they’re paying these fees to the local government. BA needs to get called out on this.

    • +1 – better still call them what they are.

      BA Surcharges

      • Lady London says:

        I would like British Airways to be more honest and call the amounts they want to charge us “co-pay” for the use of the miles we have earned..

        Didn’t BA even get sued in the US for calling their charges fuel surcharge or something when they were nothing of the sort?

        • Yes they did

        • the real harry1 says:

          if it is a way to show false prices in search results, then it is clearly illegal

          you can accept that optional fees for checked luggage, seat selection, food & drink etc are OK to be ‘hidden’ in search results because they are avoidable

          whereas surcharges are not

  3. Another reason for me to avoid BA! Virgin while not a perfect scheme seems fairer and provides a far superior service.

  4. Hi folks, INV – HEA – LAX on BA avios redemption should be cheaper taxes (fees) than say ABZ – HEA – LAX?
    Im sure I seen this route with less taxes but can’t seem to find it now!

  5. Slightly O/T. I just booked my first ever 121 redemption Club World from LHR to Vegas Sept 2018. I booked the outbound last week then called BA local at 6 am for them to add the return leg (i tried to do this at 1 am BST but the contact tool was down and the Tokoyo and USA offices were closed)

    Anyway, When i paid the taxes for the outbound it came to £775.15 for both of us, but when i called this morning to pay the return it came to just £373.00 Is this correct? I had used the Avios reward tool previously and done dummy bookings and it taxes always come to £1531.32.

    Have BA made a mistake? or taxes are cheaper when a return leg is added separately

    • With the US, taxes on a return are cheaper than 2 singles.

      • A 2-4-1 was used so can’t be 2 one ways.

        The £1531.32 is wrong, it should be £574 each return which is what you paid so it’s all correct.

        • I thought they had priced it up online as 2 x one-ways which is why they expected to pay £1531. BA charged the correct figure as you say, for a return.

      • Yes, the ex-USA flights seem to attract higher fees, hopefully to try and preserve some redemption capacity for Brits given the much lower cost of acquiring Avios in the USA (see recent 40% MR transfer bonus there!).

    • I’ve noticed that quite often booking two one way tickets instead of a return brings the price down. A few weeks ago I saw that a ticket in First had opened up on the return leg of my LHR-HND trip. The original booking in economy/premium economy had been around £250 taxes, by cancelling and booking two one way tickets it was £140 out in economy and £42 back in First! Even if I hadn’t been looking to change that leg from PE to F it would have been worth cancelling, paying the £35 cancellation fee and rebooking as two tickets. A strange quirk of the system (and most likely BA adding extra “taxes”).

      • Odd. I’ve just tried a dummy booking.

        oneway HND – LHR BA F (7 Nov 17)

        Total Price (Including all taxes, fees, and carrier charges)

        102000 Avios + £ 231.46

  6. I wondered about CX direct from MAN. 60,000 avios + £175.

  7. For World Traveller, Part Pay with Avios can work out slighlty better than a full redemption. For the Miami example, you can get £180 off the £461 fare using 33,000 Avios. You’d also earn 2200 Avios back (as a blue – more for status members); including that rebate it would work out at 0.58p per Avio. That’s still a terrible redemption (not one I’d ever make), but not as bad as the full Avios ticket at 0.28p.

  8. I am thinking of using Avios for flights to LA next Sep/Oct, cheapest are currently £1024 each making using Avios worthwhile but I am sure cash price will drop.

    What roughly should I expect to cash pay for them if I wait to book and also when would be the best time to book? Would that be as part of a BA Sale? What BA sale date would cover my dates outbound 20 Sep return 4 Oct 18?

    Don’t want to miss out on a good Economy Avios redemption to LA if that exists so wondering if I should book them now, or when they come available in a few days so they are secured.

    I suppose I could book and then if I see a great cash price refund the Avios flights. Is it £35 per person or per booking?

    Thanks for any advice
    David

  9. Club World from US (IAD) to London taxes have also been increased. The summer special only cost $900 extra for a paid ticket and that was without having to fork out 120,000 Avios as well. I guess they really do not want us to collect and use Avios.

  10. the real harry1 says:

    O/T breaking news (sorry Mikeact) – the Harrys might actually not be going to the place in the sun @ February half-term!

    My dearly beloved wife has basically wielded the ‘boring’ ‘knife’, I’m going to ‘kill’ you unless you accept my position at me and I might reluctantly have to blow the cobwebs off the credit card.

    Somewhere hot, Europe, in February?

    • Good luck! You’ll be competing with Raffles on the Dubai flights! Worst nightmare?

      • the real harry1 says:

        they’d probably arrest me for bad PR 🙂

        • the real harry1 says:

          seriously, I got warned I’m not allowed back in Qatar – it was a small matter about my car but you can’t trust these people – read a story the other day about a guy who used a false Scottish £20 note in UAE – completely innocently – and now he’s in prison for 2 years until the trial comes up

        • … but “it’s legal tender”!

      • We’re off skiing! Well, not me, because I don’t ski, but I get to write HFP with a nice view of mountain out of the window.

        • the real harry1 says:

          I’m guessing Sevilla might work if the sun gods shine

          anybody got AirBNB tips?

    • Canaries are the only place with guaranteed weather. We have been to Marbella in February when it was a very pleasant 20 degrees but it can be hit and miss.

      • the real harry1 says:

        Drove down to Sevilla in my spanking new BMW in 2001 with my new-born son aged about 2 months – we looked for the sun then found it Cordoba/ Sevilla 16-17C in February – willing to try it again

        I speak pretty good Spanish (well, better than 99.9% of you 🙂 ) so love spain

        reading some Hemingway recently set it all off again – please try him if you haven’t so far – he didn’t win the Nobel Prize for Literature for nothing, start with For Whom The Bell Tolls or
        Fiesta – The sun Also Rises as they are both Hemingway @ his best – both Spain

        • Stay in Hotel Parador in Ronda, overlooking the valley below while reading your Hemingway

        • the real harry1 says:

          Would be good if people read these days, judging by my kids, they don’t – I force/ incentivise them

      • the real harry1 says:
  11. Have you included “unearned Avios” in the calculations Raffles? ie the avios you would get from flying on a normal ticket, would probably make the NYC one negative