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Iberia drops Reward Flight Saver redemptions … will BA follow?

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Iberia has clearly been taking PR lessons from someone.  At 2am in the morning on June 1st, it sent an innocuous newsletter out.  It was only released in Spanish (“Coja aire, respire y vuele lejos estas vacaciones‏”). 

Tucked away at the bottom, was the announcement that Reward Flight Saver redemptions have been scrapped – effective as of, erm, 2 hours ago.

Reward Flight Saver, for those who are not clear, is the scheme whereby British Airways and Iberia capped their taxes and fuel surcharges on short flights (all of Europe, in BA’s case, plus short hops elsewhere such as Bahrain-Doha).  The cap for BA is £30 / Euro 35 for Economy flights and £40 / Euro 45 for Business.

Reward Flight Saver was the smartest British Airways idea for a long-time.  Short-haul redemptions, which are laughably useless with most airlines, are suddenly a great deal.

(Lufthansa charges 35,000 miles – or 45,000 for a same-day return – plus over £100 of taxes for an Economy flight from London-Frankfurt.  It is beyond a joke, given that you can fly Business Class from London to Dubai on Lufthansa for 35,000 miles one-way.)

And, when short haul redemptions are a good deal, you encourage the ‘casual’ Avios collector.  These are the ones who are unlikely to earn 150,000 Avios for a First Class trip to San Francisco.  However, they are happy to get a British Airways Amex card to earn 9,000 Avios for a flight to Amsterdam, with taxes capped at £30.

So what has Iberia done?

First, of course, you need to remember that Iberia is a financial basket case, losing vast amounts of money every day.  British Airways is profitable.  These changes are best seen in that context.

For Iberia and Vueling flights, you now pay:

All airport charges, plus a ‘contribution’ towards fuel costs of:

Zone 1   (up to 650 miles)
Economy €5 per sector
Business €10 per sector

Zone 2  (651 – 1,150 miles)
Economy €7.50 per sector
Business €15 per sector

Zone 3  (1,150 – 2,000 miles)
Economy €30 per sector
Business €40 per sector

For British Airways and other short-haul redemptions:

You pay the full amount of taxes and surcharges that would be paid on a cash ticket

What does this mean in reality?

As of May 31st (or indeed as of today if you book on, an Economy flight on Iberia from London to Madrid cost 15,000 Avios points plus £30 return.

Today, on an Iberia plane, an Iberia Plus member will pay 15,000 Avios points plus £58.70.

Today, on a British Airways plane, an Iberia Plus member will pay 15,000 Avios points plus £95.70.

£95.70 is, indeed, the same level of taxes charged by British Airways on a cash ticket.  However, for the date I checked in September, a cash ticket from London to Madrid is just £104.70!  The price breakdown is £9 fare + £95.70 taxes, total £104.70.

With Reward Flight Saver, this was not a great deal but you still got £74.70 of value for 15,000 Avios.  Now, you would be getting a laughable £9 of value for 15,000 Avios if you booked the BA flight! 

How does this affect BAEC or members?

It doesn’t, at the moment.

However, you now have the crazy system whereby Iberia Plus members can simply transfer their points across to British Airways Executive Club and make an identical redemption whilst paying less tax.  It seems odd that International Airlines Group (BA and Iberia’s parent) will let this anomaly exist for long.

This approach does not work for Vueling (you can only book Vueling redemptions on with Iberia Plus Avios) but that only accounts for a very small number of redemptions.  I expect BAEC saw a rush of account opening by Spanish residents over the weekend.

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In February 2022, Barclaycard launched two exciting new Barclaycard Avios Mastercard cards with a bonus of up to 25,000 Avios. You can apply here.

You qualify for the bonus on these cards even if you have a British Airways American Express card:

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There are two official British Airways American Express cards with attractive sign-up bonuses:

British Airways American Express Premium Plus

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You can also get generous sign-up bonuses by applying for American Express cards which earn Membership Rewards points. These points convert at 1:1 into Avios.

SPECIAL OFFER: Until 9th January 2024, you will receive 30,000 Membership Rewards points (convertible to 30,000 Avios) with American Express Preferred Rewards Gold. You receive 25,000 points if you spend £3,000 in three months and a further 5,000 points if you hold the card for 15 months. You can apply here.

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Comments (35)

This article is closed to new comments. Feel free to ask your question in the HfP forums.

  • Dave says:

    It does seem a rather weird decision to make Avios redemption rates so obviously different between the programmes. There needs to be a consistent earning and burning chart between the airlines.

    • Rob says:

      Add in ‘constant cancellation’ as well … oneworld bookings, including BA, made via Iberia Plus are not refundable!

    • Lady London says:

      I think our worry is that we may be given the “opportunity”, ooops… enhancement…. of that very thing… consistency 🙁

  • Phillip says:

    There were already other differences as you’ve pointed out Raffles with redemptions on Iberia’s own metal in terms of fuel surcharges etc. Maybe BA wants to balance the movement of Avios between the two programmes? Or indeed just put another differentiator in the works between the two airlines?

    • James says:

      Do you think lots of people move Avios from BA to IB then?

      • Rob says:

        If they have any sense. Taxes are about 75% lower on Iberia long-haul flights booked via Iberia Plus compared to BAEC. Iberia Plus is also the only way to book Vueling redemptions.

  • Tangey says:

    £9 London to Madrid fare sounds more like Ryan air than BA. must be losing a bundle on that, even assuming the fuel surcharge doesn’t all go on fuel

    • callum says:

      You don’t have to assume anything – it doesn’t all go on fuel… In fact, it has nothing whatsoever to do with their fuel costs. BA won’t be losing anything on that fare.

      • tangey says:

        Fuel surcharges are £37. Fare is £9. Thats the total that BA gets for the return flight…£46.
        £23 per 750 mile sector including the cost of fuel,food and a couple of drinks sounds very tight to be make a profit.

        • Rob says:

          That price is for a September flight. Only a handful of seats will go at that price, some will end up unused. BA isn’t selling the whole plane for that much.

          It is standard revenue management stuff. They know they can sell 5 seats at £500 the day before, 40 seats at £200 the week before, 40 seats at £150 a month before and then they just dump the remaining 20 at whatever they can get, in this case £100.

  • guesswho2000 says:

    I’ve always found IB a bit odd for redemptions, my upcoming internal flights in South America worked out 9k Avios + approx £19 in taxes each through BAEC, but IB+ were offering the same flights for ~35k Avios + cash each.

  • Colin MacKinnon says:

    High airport charges at Madrid, in particular, have been cited by the Big Orange as its reason to shut its base there.
    Perhaps this announcement is IAG’s way of protesting?
    There are lots of unwelcome changes IAG could make to Avios – a fee to swap between schemes, or bring all the fuel surcharges in line with BA’s! – which would make it a deeply unattractive scheme to me who only flies on points earned on 100k a year on CCs and does two or three biz or 1st redemptions a year.
    But they would raise a substantial amount of extra cash from those who think avios will get them a cheap bucket and spade holiday.

  • BritBronco says:

    The thing that is most alarming about this was the lack of notice. It makes me feel like they could remove the ability to make free transfers between BAEC and without any notice either.
    I am now considering whether to repatriate the 200k Avios I have sitting at In the event of transfers being stopped would I rather have them all with BA or some with IB? So long as IB has lower YQs on long haul redemptions than it seems worth keeping some with IB

  • Phillip says:

    I just noticed a note on Iberia Plus saying 0 Euros on service fees from November. Linked?

  • Squillion says:

    Certainly got me worried here Raffles. If BA copy the same model in due course, it will hardly be worth our while collecting Avios for our European flights, which is all we use them for. We might as well just buy the tickets well in advance when they can still commonly be purchased for about £90 each way.

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