British Airways will launch a 50% bonus tomorrow for anyone who buys Avios points.
50% is an unprecedented discount as a quick search through the last three years of Head for Points will show you.
It still isn’t a fantastic deal, of course.
The maximum number of Avios you can buy per year is 35,000 which during this promotion will increase to 52,500. These will cost you £575 which is 1.09p per point. You will pay more for smaller quantities.
As I showed in my article on Friday on my own Avios redemptions over the past year, the average value I got from redeeming over 1 million points was 1.0p. I am certainly not a buyer at 1.09p.
On the other hand, consider these factors:
They are ‘easy’ Avios. Pull out the credit card and you’re done. No Tesco trip required, no flying, no credit card to apply for or spend target to hit.
If you are only topping up your account before a big redemption, it doesn’t much matter hat you pay for the final few thousand you need.
As the cost of long-haul redemptions in premium classes goes up by 25% to 50% on April 28th, you could argue that the cost of points should come down in price! It isn’t that simple, of course, since Eurotraveller / World Traveller redemptions actually get cheaper on off-peak dates.
Is Avios starting to worry about the impact of the changes?
The Avios changes have an unintended consequence for BA:
Anyone who does not read Head for Points – and so is not clued up on how to get the best deals – and who collects Avios purely from Tesco, credit cards and other partners will be considering whether they should continue after April 28th. This is especially true if they live in the regions and no longer get free domestic connections on short-haul. Many people will – not illogically – decide that other credit cards and other Tesco Clubcard deals now offer better value given their circumstances.
And yet …
Avios is reliant on Tesco, American Express etc for its ‘real’ revenue. BA may make an internal transfer to pretend that it is paying Avios Group for the points generated from flying. In reality, it is only moving money from one IAG bank account to another. It needs third-party partner revenue. I was told recently that Tesco brings in £4m per year.
The odds look better than they have for a while that we will see a Tesco Clubcard and / or an American Express Membership Rewards conversion bonus over the next few months.