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Bits: BA trialling improved ‘cash for Avios’ with EU261?, Etihad launches A380 from Paris

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News in brief:

BA trialling improved ‘cash for Avios’ EU261 deals?

A few months I wrote a fairly scathing article about British Airways offering people Avios instead of cash when they claimed EU261 compensation.

I don’t have a problem with the concept, far from it.  The problem was that BA was offering such a pitifully low number of Avios – you were effectively paying 1.33p per point – that it seemed like it was playing on the potential ignorance of the claimant.

Things may be changing.  A reader just sent me details of an “enhanced compensation package” he had been offered for a short-haul EU261 claim.

He can take €250 (£216) in cash or 20,000 Avios points.

At this level I would be on the fence.  My spreadsheet of my last 5 million Avios points redeemed shows I got 1.22p of value based on what I would realistically have paid for the same flights.  Most people do better than this because I have so many points I tend to use them irrespective of the value I get.

This ‘enhanced compensation offer’ means our reader is paying 1.08p per Avios point.   It’s not a no-brainer but, for a lot of people, it will make sense.

This is also likely to prove a sensible move for BA.  It is better to offer a generous Avios package which a lot of people are likely to accept rather than a greedy package which any sensible person would refuse.

Etihad A380

Etihad launches A380 from Paris

You’ll have to wait a couple of weeks from my review of my 2nd trip in the Etihad A380 First Apartment.  If you decide to give it a try – American Airlines miles or Etihad Guest miles are the easiest ways – there is now a new route.

After what was presumably an unsuccessful run on the Abu Dhabi to Mumbai route, Etihad is switching the aircraft onto one of its two daily Abu Dhabi – Paris services instead.  It will allow it to compete better with Qatar Airways which also runs an A380 on the Paris route – you can read my review of Qatar’s A380 First Class here.

Qatar’s A380 First Class redemptions are far easier to get via Paris than via Heathrow.  Reward availability on this new Etihad route will hopefully also be as good.  The Paris service is only currently scheduled for May to October.

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Comments (55)

  • rickee says:

    I have been reading this article
    https://headforpoints.com/2015/08/19/how-to-upgrade-british-airways-flights-with-avios/

    I have a booking via Trailfinders on BA Y (WT – N class) and trying to upgrade via the link on above article on MMB at BA website but I get following error.

    Sorry, it is not possible to change this booking on ba.com. Please contact your booking/travel agent.

    Does that mean there is no way to upgrade this booking to WT+?

    • Rob says:

      You need to ring BA. I get the same when I try to upgrade my wife’s work flights which are booked via a corporate TA.

      • roger says:

        Just tried that.
        Indian call center repeated the same saying it was special fare booked via travel agent so they cannot make any amendments.

        Well it wasn’t special fare but it was some £40 (lets say £10pp) more expensive than BA itself was selling directly. Even the same price till today. Only used trailfinders due to Amex offer, hoping that I will be able to do this upgrade.

  • Graham Walsh says:

    Interesting article in the Sunday Times today. Read whilst on the way to Oslo on BA. I’m sure they liked my Virgin CC too when paying for food 🙂

    https://1drv.ms/i/s!AhHGLh_r-3e0heMDzI-P13JMGrg31g

    • AndyR says:

      One customer had to pay for wine on his J flight? I know their going downhill but that is just BS.

      • Anon says:

        Not sure why I am jumping to BA’s defence, but maybe the buying wine was a reference to the winter period of the introduction of BoB for connecting flights to a J/F flight..?

        mind you, that’s still totally ridiculous IMHO.

      • Alan says:

        Not if they flew from outwith London and had a connecting flight.

        I thought the surveillance of kids by schools article next to it looked a more scary prospect though!

  • krys_k says:

    What do BA actually pay for the Avios? What I’m getting at is what do they save on the pound by offering Avios rather than cash?

    • the real harry1 says:

      BA is the Bank of England, it can magic up Avios currency out of thin air. The thing to understand is that Avios points are a promise to pay – and the cost is effectively future revenue (real money) foregone from other sources. Can BA make itself infinitely rich at little cost, by magicking up infinite numbers of Avios points? Of course not, because the currency relies on credibility & keeping the promise to pay. Everybody believes in the value of Avios, albeit we individually might ascribe different values to each point. It is a social contract between provider (currency central bank/ ‘government’ or owners/ BA) and user. Offering Avios points instead of money saves BA real money and has a positive impact on cashflow.

      • krys_k says:

        That’s really interesting. I thought they might have gone down an internal market route. In which case, relevant to this article, I think they should be offering at least the equivalent to 1p.

        • Genghis says:

          Now I’m no expert on this and I’ve not read anything so this is best guess.

          Avios is a separate business but 100% owned by IAG (correct me if I’m wrong).

          So in BA’s books when they give someone 5k avios for service recovery they would:

          Dr expense (value of avios determined by some transfer pricing between Avios and BA)
          Cr cash (they might actually pay some cash to Avios)

          Avios would then:
          Dr cash (equal and opposite as above)
          Cr liability.

          As it’s all part of the same group, it all gets consolidated up such that the aggregate journal is:
          Dr expense
          Cr liability

          As harry mentions, no cash actually leaves the IAG Group as it effectively the central bank.
          Anyone care to add anything? As I mentioned, this is pure guess work.

          • Rob says:

            BA pays real cash to AGL, and vice versa for redemptions. It is run as a genuinely stand alone business – remember Avios is in Crawley, whilst all other IAG staff are in Waterside outside Heathrow.

          • Worzel says:

            the real harry1(11:15 am) , is correct in stating that BA can “magic up” Avios.

            However, there is no “promise to pay” :

            21.1. Avios points, and all rights of title to and property in such Avios points issued at any time, remains with AGL at all times and never passes to the Member.

            21.2. Risk (for example, theft or unauthorised or fraudulent redemption) associated with Avios points passes to the Member as soon as Avios points is recorded on the Member’s account, or otherwise awarded to the Member. Neither AGL nor British Airways is liable for unauthorised or fraudulent redemptions arising due to the actions of the Member or the failure by the Member to adhere to these Terms and Conditions.

            Those who collect Avios are reliant on the “social contract” – as he rightly points out.

            As said in the past -it’s all best treated as a hobby. 🙂 .

          • the real harry1 says:

            that’s when I failed in banking – honest – I was recruited at a high level – why the hell did they ask an Arts person to go into banking?

            that stuff threw me, as you might expect – still did pretty well

  • teri says:

    After AA cancelled and rerouted via London my business class seat from Dublin to Chicago AA offered $1,500 iin vouchers or €600 cash. I thought this was a win win deal and made silver the next year using the vouchers . The equivalent of 50,000 avios for me does not appear overly attractive given the high fees if using Avios on many one world airlines. I can’t see making silver on that many avios.

  • johnny_c-l says:

    OT: Just had an email from Amex offering 20k bonus MR points when applying to upgrade from Gold in the next 4 weeks and spending £1k.

    Link appears to be personalised but will check properly later.

    A good offer but have been working towards the £15k/10k MR Gold so don’t want to lose that and would not keep a Plat open after the bonus as the benefits don’t work for me.

    • roger says:

      Hmmm….
      I am thinking of applying for this upgrade.
      I will wait and see if I get any personalised upgrade offer.

  • Neil says:

    Just out of interest, how does one accrue 5 million Avios? I use everything I can to raise points but rarely get over 250,000 a year?

    • Genghis says:

      I guess running the UK’s best points blog and the referrals that generates helps…

  • Ppl says:

    Trying to check in for flight JNB to LHR tomorrow. Booked on 241. Let me check in but won’t let me save boarding pass says I haven’t entered valid passport info for flight. I have, should I be worried about being downgraded? Will my chosen seats be saved?

    • Anon says:

      I had the same issue as you on my rtn leg, thankfully still flew in my booked class of CW.

      As you are checked in you should hopefully be ok.

      When I was downgraded on the outward leg I couldn’t even do OLCI….

  • Nadeshka says:

    I mentioned this on the previous article on the subject but as a data point in April 2014 BA offered me 100,000 avios compensation as part of a claim for EU261 compensation. Back then €1200 was around £980 so at >1p per point and given I had plans for a redemption I accepted this.
    Odd that they are now offering less than that.
    Note that this an agreed settlement ahead of a small claims case I had lodged rather than an official EU261 payment .