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

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.

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Comments

  1. My partner just flew from Vancouver to UK return in business on SAS with an Aeroplan reward. It cost him 110k miles return and about 230gbp in taxes, mostly UK APD on the return leg. He could also have gotten a free stopover in each direction.

    • And of course one way from Vancouver would have been 55k miles and about 30 quid in taxes. Probably a better use of Amex MR than paying 75k avios and 500gbp+ in taxes.

      • Prins Polo says:

        Does SAS fly to Vancouver?

        • Sadly I don’t think they fly their own metal to anywhere in Canada now.

        • No, he had to connect in ORD and CPH both directions. I guess if you have to fly direct, then Air Canada is still a better option than BA/avios but they do attract Fuel Surcharges on Aeroplan, unlike SAS/Swiss/Turkish. Still their YQ and mileage costs will be lower than BA.

  2. Also the “purchase” of extra Avios during a booking – usually not a bad deal- a BWI-LHR flight we were looking at wants 100 quid for 5000?!

    Are we sure it isn’t just broken with the redesign

  3. Penelope Buchannan-Smith says:

    Weird how the article says there are ’48 comments’ but in reality there are only 7 above this one :s

    • Try clicking the ‘older comments’ link at the bottom of the column of comments

  4. Mikeact says:

    Are their any ‘tricks’ at all to try and beat these hefty additional costs.? We wanted to use the Lloyds voucher next year, ideally coming back to the UK on a red eye flight in Club, but the costs seem to be around the £900+ mark, which makes my stash of KLM points well worth considering instead……shame to waste the Lloyds voucher though.

    • Lady London says:

      You can ticket out of Brazil or Singapore whose governments regulate air tickets so there are no or very little so-called “taxes”. You can also ticket out of the few places in the UK that don’t have APD, and make sure it is a return ticket so you are not starting a new ticket from the USA for the return..

      If anyone has any better ideas to get rid of these so-called “taxes” on BA, that can easily exceeed the price of the fare by a huge margin in the case of Economy fares, I’d also be interested.

      • Some ideas, set a limit on how much you are willing to pay for fees/taxes per leg and stick to it (£60-70 tops for us per person), look to Europe for positioning flights i.e. Milan, CDG, Ams, FRA MAD,ZUR etc. Start planning early and be prepared to spend time looking through other carrier award charts

    • thats how they get you… its no shame wasting the voucher if it doesnt work with your plans.
      dont fit your plans around the voucher.

      youre driving business towards BA that they shouldnt otherwise get (and theres a good chance you’ll be spending more too) when you can get better deals with your other options

  5. Shame the AB option is no more, for about $5 in tax wasn’t it? Still, Aer Lingus taxes are low, and I haven’t looked at IB in a while.

  6. “If you are booking Avios tickets to North America, do NOT book them as 2 x one-way tickets.”

    If I use the BAPP’s 241 Companion Voucher for open jaw booking (e.g. London-LAX, SFO-London). When calling BA, will this be treated as 2 one-way tickets or not (because under one PNR). Thanks, appreciate to get any inputs from pro-travellers here.

    KJ

    • Lady London says:

      Provided it’s still on one ticket than an open jaw won’t mean the return half is taxed as a new ticket, because it’s not. Legs of a trip don’t have to join up exactly you can go overland (or other means) and continue your trip from another place on the same ticket. You can even do this several times on one ticket depending on where you’re going and the fare rules.

      However always make sure you fly the first flight on the ticket in particular. If you don’t take any flight on the ticket the normal rule is that the remaining legs on that ticket are automatically cancelled. There are a couple of sneaky ways around getting hit by this apparently but they are arcane and probably don’t work in many situations.

      • Thank Q Lady London, grateful for your advise …

        Genuinely, I was on the verge of booking a BA 241 to the USA. Using ITA Matrix to extract some taxes/surcharges info, BUT got myself stuck when I discover taxes for 2 one-way works out more expensive than a return flights.

        This article turn out to be a good timing to clear all the confusion.

      • Out of interest, what are the arcane ways of preserving legs after no show? Could be handy one day!

  7. Phatbear says:

    This isn’t only relating to avios though as virgin are pretty much the same.

    im currently pricing up a road trip to the US and was using virgin to fly out to the san francisco in upper and using a LLoyds 2 for 1 voucher, for me and my other half, business back from las vegas.

    When pricing up i thought BA’s taxes were high from the US back home, £383 each, so thought i would reverse the flights, BA out virgin back, and virgin’s “taxes” are £377 each, so a massive £6 difference and then we miss out on the clubhouse at LHR.

    • Wally1976 says:

      Yes I was looking at something very similar to this but to NYC. Unfortunately it doesn’t work! So now trying to feverishly save up for Virgin UC both ways; if I can’t get enough points in time might have to do PE on the way back.

  8. OT, but tax/charges-related – I’m looking at booking an Aer Lingus redemption from Dublin to Toronto over Easter next year (Peak time), out in Business and back in Economy (no Business availability on the way back – boo!) – a total of 160k Avios for two.

    Going by the AL article from 05/10 (et al), I expected to be told it was going to be about £75 in tax when I called BA, but they’ve quoted £169.60 per person. There’s no UK element to the trip. Is that right?

    Thanks all.

    • Seems high – what does Avios.com quote? Or perhaps BA has finally started to equalise with Avios?

      Do check Avios for the return as they anecdotally have better availability – never seen any proof though.

      • I thought so.

        I found the flights on Avios.com as you suggested in your articles then called BA. Avios want £440.80 for two. The lady from BA said “£169.60 per person” (so £339.20 in total) – definitely GBP, definitely per person. Might be worth a call back a little later.

  9. I think you have accidentally used £ v $ pricing.
    There is an error sometimes that shows the incorrect currency.

  10. It is crazy how high the taxes and surcharges are from route originating in the USA on both BA and virgin.

    In the past I know there was a workaround on virgin by booking 2 x one ways but it seems like this is no longer the case

  11. Andy Morgan says:

    Fairly new to Avios and would love some expert advice. I’m planning a trip to New York next September. The cost for 2 people via Avios website is 52,000 miles plus £610 taxes… which is flying economy. I can find the same economy flight for just under £700 on numerous websites. This would seem a waste of Avios right? They’d be put to much better use towards upgrading to Premium or Business right? I do also have a Lloyds Upgrade voucher begging to be used. All advice most welcome!

    • phatbear says:

      The reason you think its a waste of avios is because you think the tickets you are comparing are the same, however they are not.

      Subject to a small surcharge, i think £35, the avios tickets are changeable so if your circumstances changed you could change your booking, assuming your booking doesnt change from off peak to peak.

      The ticket you have priced up with BA is not changeable and therefore a lot cheaper.

      • …but, in general, using Avios for economy long-haul flights – except at super peak periods – is a bad deal.

        Flexibility, as you say, is pretty much the only reason I would use Avios in this scenario – and even then I would want to be fairly convinced I might need to cancel given how dreadful a deal it is.

        • the real harry1 says:

          would that be generally true on non-BA economy LH tickets, ex-EU?

        • You’d save, what, £200 in taxes and charges at best? Offset by the cost of getting to an ex-EU starting point and the fact that all dates are ‘peak dates’ with partners. Not sure it moves the needle much.

          Cathay to HK ex Paris is 60,000 Avios + £126 for example. To get 1p per Avios you’d need to be facing an £800 ex-UK fare, given the cost of getting to Paris and back. You can usually get to HK for far less than that.

        • the real harry1 says:

          yep – just thinking about [hoping to] retire to my place in the sun in a few years and my stash of Avios being worth a fair bit for LH redemptions

    • 52k avios will get you 1 return to NY in Club using the Lloyd’s upgrade voucher, off peak. Would you be able to earn another voucher and 52 k avios in the next 8 months or so? Availability to NY tends to be pretty reasonable as long as you are flexible.

      • Andy Morgan says:

        Hmm… doubt it. Just looked at similar flight with Virgin, and I can get 2 return premium economy flights for 70K flying miles (which I have), plus £755… that seems much better value.

        • Yes. To answer your original question it’s a really bad deal. Stick with the Virgin option IMHO. They are also much more fun.

  12. Andy Morgan says:

    LHR to JFK
    Outward 2 x Virgin PE for 35K miles plus £560
    Inbound 2 x BA Club for 52K miles plus £270

    Sounds like a good deal to me?

  13. 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. 🙂

  14. BA CW (inferior to VS UC IMHO)

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

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

    • 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.