The madness continues …. the Iberia ‘90,000 Avios for £200’ deal ends tonight. Let’s do the maths.

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In all of the years I’ve been running Head for Points, I don’t think I’ve ever seen a deal get as much attention – globally – as the Iberia ‘90,000 Avios for booking 10 flights you don’t need to fly’ offer this weekend.

We’ve certainly had good Tesco Direct deals in the past which were more generous, such as 2,400 Avios (1,000 Clubcard points) for a £10 printer ink which you could resell on eBay.  These were glitches and got no attention outside the UK.  This deal is NOT a mistake – Iberia has been keen to tell us that! – and it is getting huge amounts of traction across the world.

You can book the Iberia deal here if you still want to jump in or find out more.

To summarise:

  • You get 9,000 Avios for every Iberia, Iberia Express or Air Nostrum flight you book by 11pm UK time on Sunday
  • You can earn up to 90,000 Avios per Iberia Plus account
  • You must book on iberia.com
  • Your booking must include your Iberia Plus frequent flyer number
  • Your 9,000 bonus Avios will arrive within 10 days
  • Iberia has confirmed that you do not have to take the flights – you won’t lose the Avios if you don’t
  • One-way flights work fine

So …. if you can find 10 cheap one-way flights on iberia.com for €25 each (Santander to or from Madrid still had availability at that price last night, obviously prices are lowest in Winter) then you are getting 90,000 Avios cheaply.

There are restrictions on using these Avios and I STRONGLY recommend reading my article from yesterday here before booking.

Iberia 90000 Avios

Let’s put the deal in context

I am guessing that between 50,000 and 100,000 seats will be booked under this promotion.  If you think that sounds high, remember that it only requires 5,000 to 10,000 people to book their full quota to hit that number.  You also need to remember that non-UK frequent flyer sites have been going crazy over this deal too – virtually all of them, I have to say, giving less focus to the potential downside risks than we have.

What would 100,000 booked seats mean?

Iberia Group carries 85,000 passengers per day, so this equates to over one full day of passenger numbers!

If you assume all of the bookings are for Q4 2018 and Q1 2019, as that is when fares are cheapest, it will add 0.6% to Iberia’s load factor for those two quarters (management bonuses all round!)

If Iberia pays 0.75p per Avios to Avios Group (which is my best guess) then it will have to hand over £6,750,000 to AGL

Assuming an average ticket price of £20, Iberia will therefore lose £4,750,000, albeit IAG overall sees no loss

The promotion seems to have wiped out every single Iberia seat priced at under €20 for the next 12 months, and a large proportion of those priced under €25

Iberia will see a disproportionately high number of ‘no shows’ over the next year which could have a longer term impact on planning as they will lose track of the ‘genuine’ no show rate which is how they decide how much they can oversell a flight

It is all very odd and, frankly, probably beyond anything that Iberia thought would happen.  There will be some interesting discussions in Madrid on Monday.  Iberia cannot realistically go back on the deal, however, given that it briefed various websites including Head for Points on Friday about how the offer worked.

You can book via the special offer page here if you still want to give it a go before 11pm tonight.  (I’m saying 11pm because that is midnight in Spain and I think Iberia will use that as the closing time.)

(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.)

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Comments

  1. Peter says:
    • Rob Mc says:

      Reading the terms and conditions again, nowhere does it state that a flight must be taken. Just the flight needs to be booked. It states the avios will be withdrawn if a refund is taken. You will not earn avios if you do not fly (the earning avios) so perhaps this is where the twitter account could be getting confused.

      • Simon B says:

        Also, if you do what Iberia want you to do, i.e. book some flights, receive AVIOS, spend AVIOS on further flight(s), by the time the original flights are not taken the avios have been used on a booking, or potentially even flown.

    • Richard says:

      But as the article states, it is just misinformation from someone who was replying on Twitter. The article goes on

      I forwarded the Twitter message above to the Iberia spokesperson with a note that it appears that they are sending incorrect replies and here’s the email that I got back:

      You are right, the answer provided on Twitter is not right.

      The Avios will be added on our customer’s Iberia Plus accounts within 10 days of the ticket having been bought.

      so we will be credited with the points 10 days after booking anyway.

    • RIccatti says:

      Another case of broken comms from contacting the airline, now on Twitter.

      Consider scenario: all flights have been booked to go after Dec 2nd

  2. Expect a lot of clickbait from blogs wanting to continue high traffic levels by spreading FUD. We’ll know more in 10 days. Patience.

  3. @mkcol says:

    Is this now the most-commented upon thread?

  4. Jimbob says:

    Would have loved to be a fly on the wall at the Iberia marketing meeting this morning

    • the real harry1 says:

      You shouldn’t be working in marketing if you can’t make a promotion like this sound wildly successful – it can be spun as a great success internally in so many ways.

      The math can be made to stack up; think about recruitment costs of new consumers (getting people to buy IB for the first time); decent % of points will be clawed back come Dec 1st; a good load factor analyst will be working out which flights can safely be judged to have a high no-show factor so increase the over-sell total; say you used 90K points for a flight in First [‘One idea is that 96,000 Avios will get you a roundtrip ticket in American’s A321 first class between Los Angeles and New York.] – what’s the real variable cost to IB – is it much different to the £250 paid for the 90,000 Avios?

      etc etc

      • Jimbob says:

        As long as they can buy Avios for less than 0.3p, then I’m sure the maths will work out for Iberia.
        Someone must know the wholesale price

        • 0.75p I think. Iberia loses a lot of money, Avios Group makes a lot of money, and it may or may not net out for IAG depending on whether people redeem for flights or third-party redemptions like hotels.

        • the real harry1 says:

          Decent uplift to cashflow at a crucial point in the year, methinks. H1 ends June 30th.

          Anyway, if it’s any comfort, this experienced points worrymonger tried to pick holes in the IB deal https://thepointsguy.com/news/critical-points-fouled-up-iberia-deal/ & I didn’t buy most of his arguments, have a look and tell me if you came to a different conclusion

      • @ Harry

        On that article, its all just a lot of speculation about speculation, none of the arguments stand up against any kind of real world test. I dont want to break it down point by point, not enough space. This IB promo has attracted massive worldwide interest, inexperienced points collectors jumping in and now second guessing themselves combined with websites keeping their site visits up by keeping the speculation going. Makes me hark back to the good old days of 3V cards and NS&I saving account, or Tesco veg (bought individually) – it all seemed so simple back then!

        The veterans on here know not to listen to customer services, especially on twitter, stick to the published Ts and Cs. See what happens in less than 10 days, and then again in December.

      • Thomas Howard says:

        The big unknown is the extent that they devalue the Avios before anyone can use them.

        • the real harry1 says:

          That’s very much a small unknown in my books 🙂

          If you’re going to worry yourself silly about something, choose something more likely to have a big impact on your Avios enjoyment, eg
          – can’t move Avios to BAEC
          – change T&Cs, such as no points awarded if flights not flown
          – ditto points only awarded after flight dates

        • the real harry1 says:

          – move points to BAEC leaving -90K @ IB, IB force you to buy the points back to zero the a/c
          – IB & BAEC join platforms in a few months and the points are made one total, ie they net off the -90K

  5. the real harry1 says:

    I believe I opened my IB a/c on my old passport number; my wife has 2 passports…simple enough to cancel the -90,000 IB a/cs and open new ones 🙂

    • Thing is, unless someone is actually planning on flying with Iberia then people could use any old number for their passport number, perhaps thats how those in the US were able to open multiple accounts. There are a few other tricks now that i think about it. Cant imagine IB are validating passport numbers with the issuing authorities across the world for a loyalty scheme.

      That said, i genuinely have to renew my passport this year, which may be interesting.

      • They could ask for a scan of the passport/ID card to verify the account I suppose…

        • In which case someone would raise security issues with email etc. They could ask, but point is that they dont.

  6. EvilGazebo says:

    Related question: assuming this all works as described I’m going to need to get an extra 10k into wife’s new IB account for the redemption we want.

    She is a member of my BA HHA but has little or no avios in her BA account. No balances anywhere else either (very remiss).

    Options appear to be either

    a) buy the avios from either IB or BA
    b) refer her for a new Amex Gold and try and spend the £2k to get the bonus sharpish.

    Any other bright ideas I’m missing?

    • the real harry1 says:

      which card would you be referring her from?

      • EvilGazebo says:

        Currently PR Gold but looking to upgrade to Plat soon so either.

        • the real harry1 says:

          simple, upgrade to Plat for 20K points on £1000 spend (just use PayPoint to pay off your council tax, you’d get the 20K points in a couple of days)
          https://www.americanexpress.com/uk/content/platinum-charge/upgrade/

          Only then refer her (from Plat) for 18,000 referral points for you the referrer – she gets 22K points once she hits the spend target

          60,000 points, easy as 🙂

        • EvilGazebo says:

          Can’t reply to your comment below for some reason Harry. Anyway, yes that has always been the plan. But I’m more concerned about the speed of getting the 10k avios for her to secure the seats I’ve clocked. No clever ways I can transfer my AMEX or BA points to her?

        • EvilGazebo says:

          Or rather comment above. No good with threading me.

        • luckyjim says:

          You don’t have any clubcard points? Would only need £40 or so.

        • EvilGazebo says:

          No, clubcard balance has rather withered and died of late.

        • Genghis says:

          Amex points have been known to slip through to someone else’s IB acct (my wife, same surname a few years ago).

        • EvilGazebo says:

          Thanks, I did wonder if that might be worth a shot.

    • pauldb says:

      Does the redemption you want maybe have an avios&money option?

      Have you tried pairing your Amex MR account with her IB account … you never know.

  7. keith says:

    I actually think Iberia should be able to pretty easily figure the vast majority of flights people are clearly not going to take and just oversell the flights. They can really sell most of these seats twice and say just leave 3 out of 10 for people who might actually fly. I think they can get paid twice for most of these seats and end up #winning.

    • luckyjim says:

      I expect most of £20 tickets were for flights that never sell out anyway.

      • i booked most of mine on the 9.35pm departure to MAD – can’t imagine it’s ever rammed !

  8. LOL must be running as one of the most-commented articles 😀 I didn’t opt for it in the end – travels already sorted for rest of the year/start of next year so didn’t want to be stuck with expiring points!

    • The original Iberia post has 537 comments! remember the old days when the hottest article might get up to 100 comments – 3V cards, deposits for PS4/PS3/Xbox games etc.!

  9. What made me jump in the end was the fact that the last time Iberia did a ‘stupid’ stunt like that (remember when Avis didn’t appear to have a single rental car left in the on the island?) it worked out fine. Without that precedent, I’d have stayed out. WIth it, well, let’s see.

  10. Michael says:

    I missed this promotion by a couple of hours thanks to a long weekend of football which prevented me from checking up on my usual travel blogs.

    So I did a bit of digging and found that I could just book flights with Iberia and have 24 hours to cancel, just like with sister company BA. Little did I realise that unlike BA, Iberia have service fees tacked on to any cancellations regardless of ticket type.

    So without having done enough research on this, I foolishly went ahead and booked 5 separated trips with them in the hope that they’ll honour the promotion even though I missed the deadline by a couple of hours. I thought it wouldn’t be an issue as I could just ring them up to cancel within 24 hours if no dice on the promo.

    Instead I’ve had to cancel 5 separate bookings and pay £15 each in service fees to cancel them. Can anyone advise a better solution?

    • Unfortunately not.

      But this plan was always doomed to failure as it takes up to ten days for the miles to post which would mean the 24 hours will have passed before you knew anyway.

  11. So. where will my 180,000 avios get two of us next year?

  12. Lukethetraveller says:

    Related to this promo (I am trying to make the most of 90k avios arriving soon) – please advice as I can’t find the answer anywhere – if I book cash+avios discount ticket on my iberia account, is there any way to have tier points added to my BA account instead? I guess all bookings on IB will get IB plus number automatically, but I need tier points credited onto BA account. Many thanks

    • Either try and change the IB number on the qatar or finnair site, and if that doesn’t work ask them to do it for you at airport check in when you travel.

    • Can probably switch at check-in, or perhaps even at bag drop.

  13. the real harry1 says:

    hat tip david_oz on FT

    ‘I was racking my accounting brain about possible reasons why a rational company would engage in a promotion like this. The only reason I could think was an elaborate form of earnings smoothing whereby the cost of the avios is recognized immediately in Q2/Q3, traditionally the strongest quarters for airlines. The revenue from the flights more or less offsets the cost of issuing the avios, making the promotion effectively cost-neutral over the entire life of the promotion and redemptions. However the revenue is recognized (mostly) in Q1 which is seasonally much quieter for the airline industry. Therefore, they have effectively shifted profits from Q2/Q3 into Q1. If the avios are redeemed they don’t care because they already have a liability accrued for it, and if they expire unused that’s a nice little Q4 bonus for them in the form of breakage revenue. Probably none of this is material to Iberia (let alone IAG), and I’d be surprised if the accountants were even aware of the promotion before it happened, let alone consulted about the effect.’

    Thoughts?

    • I think it is load factor. Report a high load factor (which is based on sold and not flown tickets which is why you go above 100% sometimes) and the City is happy.

      • the real harry1 says:

        Load factor/ some other measure that looks good publicly for H1/ some internal measure that means mgt meet H1 KPIs – those all look possibles

        None of which would presage IB somehow ‘cheating’ us out of the points; sticking neck on the block, I’d say that’s unlikely – I reckon T&Cs as published will be observed so the opportunity to use the points well is ours.

  14. Amanda says:

    Hi,

    My IB Plus number was input at time of booking and shows in the confirmation email. When I checked My Booking on Iberia.com yesterday, my IB Plus number was not against my booking (which I have now added)

    Does this void the promotion for 9000 avios points per booking since my IB Plus number wasn’t in the My Bookings section? (obviously some Iberia error)

    Thanks

    • the real harry1 says:

      I think you’ll be fine as you have the proof (the emails) so could chase it if necessary. But why not contact them if you are worried? 02 036 843 774

  15. Amanda says:

    Hi,

    Has anyone received the 9000 bonus avios yet?

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