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

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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.

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

Avios wing 12

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 (116)

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

  • Andrew (@andrewseftel) says:

    I imagine that high-demand routes like CPT, SEZ and MLE remain reasonable value vs BA pricing, but need to weigh up against cheaper indirect routings as well.

  • Michael C says:

    Yes, I looked at D.C. on points a few weeks ago (to avoid the obligatory Sat. night stay). The charges for points (econ.) were about 40GBP less than a new ticket!

  • Nate1309 says:

    How do these prices compare with the Avios part pay?

    • the real harry1 says:

      depends which one you mean?

      i) Pay with cash, get discount with Avios
      ii) Pay with Avios, reduce Avios requirement by paying partly with cash

      (ii) is consistently allowing you to ‘buy’/ substitute Avios requirement at ‘cost’ of 0.75-0.8p. Surprisingly a lot of people here don’t seem to get it, despite Anna & I going on about it – this is one of the very easiest ways to ‘buy’ Avios for 0.8p just by doing next to nothing, yet the comments have always indicated that even quite savvy commentators here think we’re talking about burning Avios @ 0.8p – the exact opposite! (Caveat – only applies to HBO/ Economy/ Premium Economy fares – math doesn’t stack up for Business.)

      • the real harry1 says:

        Sorry – doesn’t include HBO fares, just RFS Economy, LH Economy & LH Premium Economy

        • the real harry1 says:

          Raffles tbh I can’t understand why you don’t cover this – it’s not a trick to keep hidden in case it gets stopped – it’s just BA standard offer on Avios redemptions – probably half the people here don’t get it judging by the comments – well, only Anna & myself have ever made comments that would suggest we understand it lol 🙂

          You might consider it too obvious – as would I in a parallel universe – but clearly many folks don’t understand what we’re talking about

          ‘Buying’ sometimes large quantities of Avios for 0.75-0.8p without leaving the comfort of our chairs

        • Genghis says:

          I’m sure even the man himself didn’t really get it last time we discussed it

        • the real harry1 says:

          apologies, Genghis, that makes 3 of us 🙂

          some people only fly Business/ First so this would not be of interest!

        • Genghis says:

          Need a search function to find it. Lol. Not easy on the mobile

        • Rob says:

          Point taken. Will deal with it 🙂

        • Anna says:

          I did a few comparisons recently, you have to choose flights which BA can charge a cash premium for as they fly the only (or only direct) route. Though it doesn’t always follow, e.g. it’s a good deal to Bermuda, but not to Turks and Caicos, even though BA have the only direct flights to both from the UK.

      • AndyR says:

        I get it too Harry but 0.8p isnt always offered. Bought an RFS to Prague the other day and it worked out at 1.13 thereabouts to buy them which is not worth it.

        Any idea how BA decide? Is it based on distance? Prague is zone 1 so maybe why?

  • Paul says:

    Please stop referring to BAs rip off charges as Taxes it lets them off the hook
    APD is thevthe only tax paid and it accounts for a relatively small percentage of the vcharges levied. Heathrow airport take about £35 the US airport and government take much the same and BA fees make up the bulk.
    For example I have just booked a CAI HNL ticket in J for £1288 of which £560 is fees and BAs fee is £360!!!!!!! This is on a 9 sector ticket.
    BA complain about UK APD which is high but until they reduce their fees and credit card charges why should the government lower APD. BA fees are a much greater impediment to travel than any tax.

    • callum says:

      BA’s fees are just an accounting practice and are part of the fare. It doesn’t really matter to a normal ticket whether the fare is £10 and fee £490, or the fare is £500 and the fee is £0. I hardly see how it could be an “impediment to travel”.

      • Paul says:

        An accounting pracrice? Hmmm, no it’s a fee separate from the fare and charged in redemptions as well as cash fares. Calling it anything other than a rip off fee simply perpetrates this banking accounting tosh. It’s a rip off fee and if removed would reduce fares. If included in the fare would reduce the costs of redemptions. The consumer needs transparency and accounting Del Boy practices ain’t transparent.

        • the real harry1 says:

          no offence but pretty naïve to think it would reduce fares – if the surcharge were somehow made illicit, it would almost certainly just get added back in equal measure to the fare

          your only hope would be if BA considered on some routes that it was important to show up in search engines/ Expedia etc as a competitive fare compared to alternative carriers and did away with the extra revenue completely – but now we’re really in la-la land

        • callum says:

          No, it’s an accounting practice. Why you think “accounting practice” means it’s not a rip-off or not negative I have no idea…

          As TRH1 says, it will not cause fares to fall – period. It would possibly cause redemption fees to fall, though I would imagine they’ll come up with a way to get around that (e.g. increase avios redemption rates, introduce co-pays etc.).

        • Anna says:

          They can charge what they want – it’s a condition of using your avios. I try to think of avios redemptions as very heavily discounted fares – I don’t get as mad that way!

      • RussellH says:

        BA started breaking out airport fees etc ( I do not know if they are still called ‘Passenger Service Charges’ – PSC) last century so that their headline pricing did not look totally out of line with the easyJet / Ryanair competition, which at the time had always done that. People will remember the £5 single fares which became £55 after all the extra fees were added.

        BA etc. then quickly realised that this was also a brilliant ploy when redeeming frequent flyer points – they were still getting some cash in for themselves.

        Airlines have been banned from breaking out these various bits and pieces for cash fares, but there has been no pressure to legislate against it for frequent flyer tickets.After all, most people do travel on cash tickets.

  • the real harry1 says:

    I’m consistently getting quite a lot better return on RFS fares – we always fly peak (school hols) to the same destination – even with the higher Avios requirement, we’re usually getting 1.4-1.5p or better @ T-355 and significantly better for my wife (on occasion up to 3.5-4p) – who can’t commit to T-355 in most cases so by the time we come to book, the cash fare has gone up loads.

    However, I’ve noticed recently that during sales and certain other times, the HBO fares are so dirt cheap that I’d potentially have been better off saving my Avios & £17.50 and getting those instead – at those opportunity points my Avios suddenly seem worth about 0.4p! (Though no checked bag included so slightly unfair comparison.)

    Of course, that’s not @ T-355 and you’d have to cross a lot of fingers and toes to even hope to get a cheap flight on the perfect day out & home @ (say) T-200, let alone a cheap flight in the perfect slot that day. But we don’t usually need 4 checked bags so that might feasibly be the way forward – buy 2 RFS fares @ T-355 then watch carefully/ set up alert – if that is indeed possible – to grab 2 cheap HBOs on the same flight at a later time. Probably not worth the risks.

    • Scallder says:

      Harry – you can set up alerts on Google Flights for routes/dates so would suggest having a play around on that to see if that’ll work

  • TripRep says:

    Agreed, I’m being a pedant, but let’s not join BA staff in misleading us calling them Taxes.

    BA Surcharges or BA additional fare fees.

  • mike says:

    Whilst I would never be the first to defend BA and their charges (do not call them taxes!), long haul economy redemptions can make sense in certain situations. I’d add the “avoid a Saturday night stay” to your list.

    For example a couple of years ago I needed to go to NBO for a few days but could not stay a Saturday either end of the trip, a cash economy ticket was pricing up at £1900, my ticket was 19,500 Avios plus £300. That’s 8p per Avios! Admittedly not all my redemptions are like that, but…

    • Polly says:

      Same here last week urgent trip to Dublin, elderly parent emergency. Door to hosp 4 hrs, with a last minute available RFS. Flight was £ 280 ow..so my avios priced up at 6.55p each. Flew in Y. Really valuable in these circs.
      I call BA fees as they are, BA fees and taxes. Refuse to call them all taxes.

  • 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.

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