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
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.
How to earn Avios from UK credit cards (April 2024)
As a reminder, there are various ways of earning Avios points from UK credit cards. Many cards also have generous sign-up bonuses!
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:
Barclaycard Avios Plus Mastercard
Get 25,000 Avios for signing up and an upgrade voucher at £10,000 Read our full review
Barclaycard Avios Mastercard
5,000 Avios for signing up and an upgrade voucher at £20,000 Read our full review
There are two official British Airways American Express cards with attractive sign-up bonuses:
British Airways American Express Premium Plus
25,000 Avios and the famous annual 2-4-1 voucher Read our full review
British Airways American Express
5,000 Avios for signing up and an Economy 2-4-1 voucher for spending £15,000 Read our full review
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.
American Express Preferred Rewards Gold
Your best beginner’s card – 20,000 points, FREE for a year & four airport lounge passes Read our full review
The Platinum Card from American Express
40,000 bonus points and a huge range of valuable benefits – for a fee Read our full review
Run your own business?
We recommend Capital on Tap for limited companies. You earn 1 Avios per £1 which is impressive for a Visa card, along with a sign-up bonus worth 10,500 Avios.
SPECIAL OFFER: Until 12th May 2024, the Capital on Tap Business Rewards Visa card is offering a bonus of 30,000 points, convertible into 30,000 Avios. You must have a Limited Company to apply. Click here to learn more and click here to apply.
Capital on Tap Business Rewards Visa
Huge 30,000 points bonus until 12th May 2024 Read our full review
You should also consider the British Airways Accelerating Business credit card. This is open to sole traders as well as limited companies and has a 30,000 Avios sign-up bonus.
British Airways Accelerating Business American Express
30,000 Avios sign-up bonus – plus annual bonuses of up to 30,000 Avios Read our full review
There are also generous bonuses on the two American Express Business cards, with the points converting at 1:1 into Avios. These cards are open to sole traders as well as limited companies.
American Express Business Platinum
40,000 points sign-up bonus and an annual £200 Amex Travel credit Read our full review
American Express Business Gold
20,000 points sign-up bonus and FREE for a year Read our full review
Click here to read our detailed summary of all UK credit cards which earn Avios. This includes both personal and small business cards.
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