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How ‘taxes and charges’ on Avios redemptions from the US got out of control

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The level of ‘taxes and charges’ added to long-haul Avios redemptions on British Airways is always a sore point.

In general, I use a ‘finger in the air’ sum of £550 for the taxes and charges on a Club World or First return redemption from London whenever anyone asks what they will be.

That obviously isn’t small change, but it still gives acceptable value for your points most of the time as long as you are redeeming for Club World or First.  The biggest threat to Avios – given BA’s dominant UK position – is not from other frequent flyer schemes but from aggressive sale fares from other airlines.

When you have Qatar Airways regularly offering Business Class tickets to Asia for £1,000 in a sale, admittedly starting elsewhere in Europe, for a superior product then it offers clear competition.  It also earns Avios and tier points, of course!

(Avios is, of course, under threat from other angles.  You can switch from a BA credit card to a different rewards credit card.  You can convert Tesco Clubcard vouchers or Heathrow Rewards points or Amex Membership Rewards into a different treat.  You can only squeeze things so far, and £1 earned by Avios from Tesco is worth a lot more – because it is ‘real’ money – than £1 transferred across intra-group from British Airways.)

But be grateful you don’t live in the US ….

What you might not realise, if you live in the UK, is how reasonable BA’s ‘taxes and charges’ are compared to what a US resident must pay.

The ‘charges’ element of ‘taxes and charges’ is just a made up number, which BA pockets.  It doesn’t actually reflect anything in particular and it has no qualms about changing it on a market by market basis.

Here’s a little Wednesday quiz.

The ‘taxes and charges’ on a Club World return ticket from London Heathrow to New York JFK are £534.

What do you reckon the ‘taxes and charges’ are on a Club World return ticket from New York JFK to London Heathrow and back?  Here’s a clue – it isn’t £534.

£400?

£500?

£600?

£700?

£800?

£900?

No, sorry, you’re still wrong.

The actual figure is an astonishing £970 return. 

You can prove this yourself by doing a dummy booking on ba.com.  You need to click through to the payment page for it to recalculate to the exact number.

Why is this?

It isn’t entirely clear why BA treats North America like this.

You don’t see it with other markets.  A return Club World redemption to Dubai is £505.  Book the trip in reverse and you pay £540.  That’s near enough, given currency fluctuations.

One view is that, because Avios are so easy to earn in the US (BA has, in the past, given out 100,000 Avios as a credit card sign-up bonus) it tries to create a level playing field with the UK by adding extra charges.  This ‘protects’ UK Avios collectors because it reduces the willingness to US members to redeem on transatlantic flights, with many choosing to use them on domestic American Airlines and Alaska Airways flights instead.  This is only a theory though.

Even if you live in the UK, there is a lesson here

If you are booking Avios tickets to North America, do NOT book them as 2 x one-way tickets.  This is because the ticket from London will attract the lower UK level of ‘taxes and charges’.  Your flight home, when booked on a separate ticket, will attract the higher US level of ‘taxes and charges’ and you will end up paying a lot more than £500.

You should also bear this in mind if, for example, you see a special one-way cash offer from Norwegian, Primera Air etc from the UK.  Don’t think that booking the outbound flight for cash and then using Avios for the return is a good deal, because you will be paying an inflated level of ‘taxes and charges’ on the flight back.

(Want to earn more Avios?  Click here to visit our home page for the latest articles on earning and spending your Avios points and click here to see how to earn more Avios from current offers and promotions.)

Comments (107)

  • TripRep says:

    Data Point for Virgin Atlantic

    Upper Class one way Miami to LHR

    Sept 2013 $450 + 50000 Miles

    Sept 2018 $501 + 47500 Miles

    Not a great deal of difference in 5 years, Good value as far as Unconcerned, esp compared to a one way cash UC ticket, so I’d happily pay that again for a great service. 🙂

  • TripRep says:

    BA CW (inferior to VS UC IMHO)

    Sept 2018 (offpeak) – 62500 Avios + £ 374.50 (approx $490)

    • TripRep says:

      Obvs for same route, ie. MIA to LHR one way.

    • Alan says:

      Although I enjoyed VS in flight service I’m not convinced re inferiority of bed. I still sleep better in CW (I pick window seat, so no-one stepping over me, ideally upper deck if the plane has one). By comparison I found the VS seat to be much more cramped. New CW dining service was also pretty good. For daytime flights it could be different but for overnight eastbound from USA (where I just want to get on and sleep) I still find BA CW pretty good.