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What is an Avios point worth?

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It is, amazingly, 18 months since I last discussed my thoughts on how to value an Avios point.  I thought it was worth running the numbers again for the benefit of new readers and to see if they still they stack up, especially as:

British Airways has recently sneaked up its ‘taxes and charges’ on most routes, and

the cost of BA cash tickets, especially on short haul, continues to fall

The value of an Avios point is based on numerous factors – where you fly, what cabin, whether you normally use a 241 voucher and (the one rarely considered) what class and/or airline you would pay for if Avios flights were not available.

You need to know how YOU value an Avios because it impacts on what you are willing to pay for them.

Let’s imagine that Tesco runs a promotion which effectively lets you buy Avios for 0.75p though bonus Clubcard points on a particular item.  Or perhaps you take advantage of Groupon’s Iberia Plus offer which lets you buy points for just over 1p.  Should you jump in at these prices?  You need to be sure that you are getting substantially more than your cost price to make it worthwhile, especially as you are substituting something very liquid – cash – for something that is not very liquid at all.

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The same goes for Avios-earning credit cards.  Once you’ve got your British Airways Premium Plus American Express ‘2 for 1’ voucher in the bag, you need to know whether 1.5 Avios per £1 is a better deal than a cashback credit card or, say, 3 Marriott / SPG points per £1 via the Starwood Preferred Guest Amex.  If not, your BAPP Amex card can go back in the drawer.

Here are six different Avios scenarios – which is right for you?

Instead of answering the question of Avios value directly, I devised six scenarios for an Avios redemption.  As you can see, each puts a different value on an Avios point.

Before we start, remember that Avios points definitely have a ‘floor’ value. There are various non-flight redemptions available for Avios via such as wine, travel ‘experiences’ or hotels.   In general, you receive around 0.5p per point when you do this.

‘Part Pay With Avios’ adds another dimension.  Depending on the route and class you are booking, you will receive between 0.55p and 0.8p when redeeming Avios towards a British Airways cash ticket.

If you ever have the opportunity to acquire Avios for less than 0.5p, you will definitely come out ahead.  Whether higher valuations make sense depends on how you spend them.

Here are some potential Avios redemption scenarios:

1. Andrew takes two long-haul holidays a year with his family, requiring four Club World tickets per trip.

Let’s assume these are 120,000 Avios per seat Club World redemptions (eg Dubai). One of the two holidays uses the 2 x 241 vouchers Andrew and his wife earn each year. Let’s assume £535 of taxes per ticket because he redeems on BA instead of, say, routing on Iberia via Madrid to save money. He redeems on leisure routes (Middle East, Caribbean etc) where in a BA or other airline sale he could buy a Business Class cash ticket during the school holidays for around £1,499. He could afford to pay cash if necessary.

Total Avios spent per year = 720,000 (6 x 120k, adjusting for the 241’s).  This assumes that all the flights are at peak pricing periods.

Value received: £1,499 if paid cash – £535 taxes on Avios tickets = £964 per seat x 8 tickets = £7,712

Value received per Avios = 1.07p. This is a ‘real’ saving since Andrew would pay cash in a sale for Business Class seats if necessary. There is intrinsic extra value from the ability to cancel the Avios seats if needed. However, the calculation ignores the miles and tier points that cash tickets would bring.

If one of these trips fell into an off-peak period, saving 20,000 Avios per person (80,000 Avios in total), then the value would increase to 1.20p.

The annual fee for the two British Airways Premium Plus credit cards is not factored into this analysis.

2. Jez and Louise live in the South East and use their Avios to do European short breaks, flying Economy Friday to Sunday. They do not spend enough to be able to generate a BA Amex 2-4-1 voucher, and do package holidays for their ‘main’ holidays.

Avios required for an Economy flight to Prague: 9,000 plus £35 taxes based on a peak weekend

BA cash price: £160 per person for March on a ‘hand baggage only’ fare, booked three months in advance.  However, Jez and Louise would use easyJet from Gatwick if Avios seats were not available, with a typical price (out Fri, back Sun) of £140.

Value received per Avios = 1.16p. This is a ‘real’ saving, compared with the easyJet price. There is extra value from the ability to cancel the Avios ticket.

If Jez and Louise travel on an off-peak weekend the cost of the trip would fall to 8,000 Avios per person which takes the value per Avios point up to 1.31p.  The value also goes up if they would take checked luggage, since Avios tickets allow one free suitcase per person.

3. Glynn and Sarah live in Yorkshire and use their Avios to do European short breaks, flying Economy via Heathrow. They do not spend enough to be able to generate a BA Amex 2-4-1 voucher, and do package holidays for their ‘main’ holidays.

Avios required for an Economy flight to Prague from Manchester or Leeds Bradford via Heathrow: 18,000 plus £70 taxes on a peak weekend

BA cash price:  Not comparable as they would fly Jet2 from East Midlands if they could not use Avios.  Typical cash price for a March weekend, booked three months in advance, is £120.

Value received per Avios = 0.28p.  Glynn and Sarah would be crazy to transfer in Heathrow and add two hours to their travel time for such a poor return.  It would make more sense to redeem their Avios points for a hotel room in Prague and receive around 0.5p per point.

Even if Glynn and Sarah travel off-peak, it remains poor value.  At 16,000 Avios per person the value per Avios point only increases to 0.31p.

(Glynn and Sarah may get some value from redeeming on Flybe, Aer Lingus, Vueling, Finnair or Iberia Express, all of which operate from UK regional airports and which let you book with Avios.  You pay full taxes, not the £35 Reward Flight Saver fixed fee, when redeeming on these airlines so good value is not guaranteed.)

4. David is single and happy to take an odd routing if necessary. He only flies Economy when using his own money but is happy to fly Business Class when using Avios. He would normally spend around £350 on a holiday flight to New York in Spring.  He lives in the South East.

David flies Iberia in Business Class from Madrid to New York for £163 plus 68,000 Avios (plus 15,000 Avios + £35 for a BA Economy flight to Madrid from Heathrow to position). His total cost is 83,000 Avios plus £198.

Value received per Avios (based on £350 cash for a direct flight): Not clear   David has spent £150 less in money than the cost of an Economy cash ticket, and gets to fly in Business Class instead, but obviously using 83,000 Avios to save £150 is not smart.  The real value, of course, is that he is flying Business Class and not Economy, but he would never pay for Business Class so how should be judge the value?

5. Alex and Nicky earn enough Avios per year for one long-haul redemption to California in Club World, using their 2-4-1 voucher. They would be willing to pay £1,750 each for a cash ticket in a BA sale or flying BA ex-Europe. Taxes will be £650.

This is potentially the most likely scenario for a Head for Points reader without children – using one 2-4-1 voucher per year for one major redemption for a couple.

Alex and Nicky spend 150,000 Avios (with the 2-4-1) and pay £1,300 of taxes. This assumes they travel in a peak period.  The cash alternative would have been £3,500 for two.

Value received per Avios: 1.46p. This is a ‘real’ saving because they would pay cash otherwise. They also gain cancellation flexibility which a cash ticket would not have, although they lose out on the Avios and tier points earned on a cash ticket.

The value increases to 1.76p if they travel to California in an off-peak period for 125,000 Avios.

The annual fee for the British Airways Premium Plus credit card is not factored into this analysis.

6. Charles and Vicky also do one long-haul redemption each year to California in Club World. They earn fewer Avios than Alex and Nicky, though, so prefer to ‘Upgrade Using Avios’ a World Traveller Plus ticket to Club World. They expect to pay £900 in a BA sale for their WTP ticket and would pay up to £1,750 for Club World.

The ‘miles for upgrade’ cost of this ticket would be 50,000 Avios per person during a peak period. This saves them £850 per person on the cost of the Club World ticket.

Value received per Avios: 1.7p. This is a ‘real’ saving because they would pay for Club World if necessary.

If Charles and Vicky travel off-peak, the value per Avios point DROPS to 1.42p.  This is because the cost of upgrading World Traveller Plus to Club World is higher – at 60,000 Avios – during off-peak periods.  Crazy but true.

However …

You will notice that none of these people flies First. That is because very few of us would pay cash for First, even if we would pay cash for Business Class. The additional Avios you spend for First over Club World give you intrinsic satisfaction and perceived value, but do not translate to a hard cash saving.

(In the last example, if Charles and Vicky would never pay £1,750 for Club World but would pay £900 for World Traveller Plus, then the 1.7p valuation per point is NOT ‘real’ because they would never have spent the extra money for business class in the first place.)

If you earn your Avios for free by flying, the value you get per point is not a concern. However, let’s assume you earn your miles via a credit card at a net cost of (say) 0.5p per Avios compared to what a good cashback credit card would pay you.

In this case, you need to understand that the extra 50,000 Avios for First over Club World to California is actually costing you £250 (50,000 x 0.5p) in lost cashback. Whether that is good value is down to you – but if you’ve paid for the Avios, you need to understand the choice you make.

What about long-haul economy redemptions?

You will notice that none of these people flies BA long-haul economy.  This is generally a poor use of Avios points because of BA’s taxes and charges.  However, the guaranteed availability of four Avios seats per flight at peak periods may lead to times when economy redemptions do offer value.

As an example, an off-peak redemption to San Francisco in World Traveller / Economy is 32,500 Avios plus £375.  Any cash price of over £618 would see you getting 0.75p+ per Avios of value.

To conclude …

How YOU value an Avios is totally dependent on how you use them.  As I have shown above, there are good deals to be had in the right circumstances.  It is, easily, possible to get over 1p of value per Avios point.

(Head for Points is the UK’s biggest frequent flyer website with 1.5 million monthly page views.  Want to learn more about earning and spending Avios?  Click here to read our latest news storiesclick here to join our email list and click here to read our ‘Avios Redemption University’ series.  Read this article to learn how you can get 10,000 FREE Avios by signing up for the American Express Preferred Rewards Gold credit card.)

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  1. Concerto says:

    I never use Avios on BA but only on rather obscure carriers on short routes, such as SUN-AIR, S7 Airlines, JAL or Air Italy, to name recent redemptions. Got amazing value each time.

  2. Memesweeper says:

    The 2-4-1s should be priced in these calculations. They cost (depending on the speed you speed on Amex and how aggressive you are at cancelling them) up to £195. On that basis IMO you need to be saving > 20,000 Avios when you use one.

  3. Another scenario, summer hols using RFS, which includes the suitcases. Would easily be over £1k for a family of three, by the time you have added all the “optional” extras, if using a LCC

    • Agree, peak time RFS is great, did it this year to Menorca (Easyjet was over 1k for 4 of us including bags). Same again next year for Marbella.

      I just used the Lloyds Avios upgrade for next year. 130k Avios off-peak, out in CW, return in PE. £985 for the two of us. Cash price for the tickets was £3,435.32, so a good use at around 1.8p.

    • Agreed. I don’t think of this hobby at all in terms of “saving” money. Rather I see it as getting £X worth of travel for spending £Y (like shopping at T K Maxx!) We’ve had a few lovely CW flights now (and got 1st F coming up in May) but I think the most satisfaction I’ve felt (OK, it was downright smugness) was getting 4 RFS to Nice this summer when the cash price would have been 12 times the RFS fees. School holiday pricing is a particular gripe of mine so I was absolutely thrilled with this!

      • Anna,
        Did you not work out the great value your avios gave you? That would make you even more smug. We get a great kick out of pricing up the last minute cash prices v the RFS…and yes, it’s a hobby with benefits!

  4. Michael C says:

    I find it trickier to calculate the value when trying to book for 3, using the 2-4-1, as IF you get the seats, you then have to add the extra cash ticket onto it, which may or may not be at a good rate.
    Blimmin’ kid. I should do a Kirstie with him.

    • Or if you have enough avios, use a route with 3 or more award seats going. We’ve started alternating flying direct to our preferred Caribbean holiday destination (there are only ever 2 CW award seats) and paying for the 3rd seat when there’s a BA holiday sale, and combining it with a US city break to somewhere there are 3 award seats and using cash or avios for connecting flights. The second option makes for a fabulous holiday if you like combining sight seeing with beach flopping.

      • Michael C says:

        Thanks for the tip, Anna! would def. work as we’re big fans of US trips already. Sadly N Orleans-LHR in Oct. didn’t have points availability so we paid in WT+. Having said that, it didn’t even have a lounge!

  5. We use Avios..a lot, but always double check the various ‘payment ‘ options as outlined in Rob’s article for best value if at all possible. RFS take some beating though, for trips around Europe.
    We’ve also taken advantage of using two BA ‘multi partner redemptions’, down under, making sure we use the full allotment of Miles for a couple of extra ‘freebie’ trips…really good value for us.

  6. And for Vueling you don’t have to pay the taxes, you can pay 100% including the taxes although it sets how much you get per Avios to 0.06€

    • If you book Vueling via Iberia Plus, it works on the standard Avios pricing model, eg flat number of points plus taxes.

  7. I never thought I would say this, but I actually booked a worthwhile redemption on Flybe a few days ago. This scenario demonstrated both the tangible and intangible value of Avios for me. I had arranged for myself, my wife and our newborn to go and visit family in Edinburgh without realising is was a Six Nations weekend…hence Flybe and Easyjet each wanted about £700 for the trip. Enter currently-not-dynamically-priced Avios. If you compare the pure cash price with the Avios cost then this works out at over 3p per Avios in value. And no, I would never have paid £700 for this trip, but I have still gained excellent value from the points.

  8. With cash tickets becoming cheaper particularly to the USA at present but the taxes and fees going up and up (thereby reducing the Avios benefit), is it better to redeem for say a single trip to the USA in Club or enjoy a number of short haul trips with the fixed Fees ?

    And did your analysis conclude that the Avios benefit had reduced in broad terms since you last ran your numbers ?

    • It very much depends on when you travel though. If you’re stuck with having your holidays at peak times, you can get much better value even when paying the peak long haul avios prices. Even in Caribbean low season (i.e. our summer), my holiday flights would have been £3600 (sale price, they are much higher now) compared with £1300 fees plus £195 BAPP fee. But yes, I would think twice about using avios if I wanted to fly CW to, say, NYC at the cheapest time. And this is from someone who until a few years ago wouldn’t have contemplated paying for business class flights!

    • Spending has clearly got worse due to cheaper cash tickets (although you could argue that Qatar getting more sensible on pricing has pushed up long haul options) and taxes rising.

      You should also compare it to earning to be totally fair. Has it got easier or harder to run up points in the last 18 months?

  9. Fred and ginger never go outside the UK for holidays as the amount of money they can afford to spend on flights/hotels would not get them a week’s holiday except in an out of the way place, during an offpeak time, in a really crappy hotel, and they don’t consider that a holiday. Their holidays amount to going to a camp site with their existing tent, and using their spending money for good quaility meals.

    They win 1M avios.They use the miles to fly to Dub, and onto the US in biz. They use £200 of their spending money for taxes/fees. They stay 14 nights in a 5 star hotel, using the avios to pay for the hotel bookings that include breakfast and dinner.

    The extremely hypothetical scenario shows the weakness in putting a value on redemption based on what you would otherwise spend. Fred and Ginger would spend nothing on a foreign holiday. Does this mean their 1M avios had 0p value for them ?

    • +2. We have been able to use 241s in F to Singapore minimum once but sometimes twice a year. Before that it was to Oz.

      Each year for many years I’ve been thinking I won’t be lucky next year but with midnight vigils flexibility and luck we always (so far) seem to manage it. I buy miles when on silly offers and it makes economic sense to me as I can afford regular F this way but wouldn’t be able to under normal purchase rules.

      I have no idea how to calculate the value though …… 🙂

    • TGLoyalty says:

      With c100k from sign up bonuses alone with a couple add in a his and hers Plat plus 18k for referrals. I suspect it takes a lot less that 666k spend to build a 1m avios haul.

      I’ve earned over a million miles between avios and virgin and have personally spent significantly less than that.

      I keep it simple. 1p a mile and see if it makes sense vs the cash prices.

    • Just being nosey…why would you go to Bahrain each year ?

    • Yes this is to the point and something worth considering with cash back websites as well.

      • Shoestring says:

        If I were starting from scratch I’d have no qualms paying the £3000-odd (each) for his & hers BAEC a/cs to start you off with 600,000 Avios & no acquisition hassle whatsoever.

    • Shoestring says:

      tbf it’s a better option than UAE, so if you want some sun & heat in the winter without flying as far as Thailand etc, not a bad possibility

    • No. He says up front that they have a 0.5p base minimum; not sure how you missed that. If they could trade 1m Avios for £5k I would suggest better value than your theoretical holiday so what exactly is your point?

  10. Although this obviously depends on the card. The Amex MR points, for example, can be converted to Amazon vouchers at 0.5p each so you are losing that if you decide to transfer to Avios

  11. If the underlying ticket is a cash ticket, using “part pay with avios” of any amount does not affect the amount of avios or TPs earned.

    Conversely, if the underlying ticket is a reward ticket, using “avios and money” of any variation still results in zero avios and TPs (unless you’re lucky…)

    • Nigel the Pensioner says:

      I think tht’s the answer!

    • Mark LLL says:

      Genghis, thank you.
      Succinctly put and a ‘lightbulb moment’ for me.

    • Yes, no difference in my TPs with a cash minimum/avios max spend on my Dub flight.

    • I still can’t understand why these two options have not been unified in one cash+avios option (with the underlying ticket always being cash to avoid doubt re miles accrual) – the current system is so confusing and could only result in disappointment…. Rob, any birds on that from Alex Cruz?

      • Shoestring says:

        I prefer it the way it is & don’t find it confusing. Avios + Money gets us ‘unlimited’ points @ 0.8p with no hassle whatsoever. Good value IMV.

        We don’t need tier points & find Money + Avios an expensive option in comparison.

      • Lady London says:

        Er… Harry not to nitpick, but don’t you mean “Money + Avios” gets you points @….
        rather than “avios + money” gets you points @.. ?

      • Shoestring says:

        Nope Lady London – there’s the rub.

        Very experienced flyers don’t always get it – though I admit it might just be my grammar or something! 🙂

        When I get 4x Avios reward flights @7500 Avios, I can pay 30000 Avios + £70 RFS

        Or I can pay 10000 Avios + £230.

        The 20000 Avios I *haven’t* used have *cost* me £160. So I’m *buying* them for 0.8p.

        I do this route a lot, so it’s *unlimited* Avios @0.8p for me! 🙂

      • Lady London says:

        Thanks Harry. I know you and Anna have talked about this approach and recommended it.
        I’m maybe a bit slow on the uptake.

        Your method seems to value 5,000 avios at £57.50.
        My valuation of 5,000 avios is only £37.50 these days. As cash prices have got a lot cheaper on my route.
        So I’d much rather give British Airways 5,000 avios, than £57.50 cash.
        Earnings of avios for any cash ticket on my route can also be ignored as the earning rate from British Airways is even worse than Lufthansa.

        I think I;m still a bit dim, Harry 🙂 But I would have thought that as you’ve remarked you have found avios easy to earn in the past, perhaps you would have preferred to conserve cash instead and spend more avios even where it might not make total sense?

      • Shoestring says:

        You might need to change that calculator battery! 🙂

        Not sure I get the first bit.

        But actually, you’re right, I’m busy burning Avios, not buying them @0.8p.

        Nothing about being worried about my holding, just cashflow mgt.

      • Shoestring says:

        Yep it’s that calculatot battery:

        so 5000 Avios = £40 or 0.8p

      • Lady London says:

        Yup I’m dim Harry.
        Your calculation looked to me as :

        1x Avios reward flight for 7500 Avios + £17.50 RFS
        1x Avios reward flight for 2500 Avios + £17.50 RFS plus ‘Avios+Money’ £40.
        The 5000 avios you haven’t used, has cost you £40 to save
        So each of the 5000 avios cost you 0.8p to save,

        You;re right the RFS component of £17.50 is the same for both versions. So it can be eliminated leaving,

        The £40 more being the only difference between the 2 options in money
        combined with 5000 avios being the only difference between the 2 options in avios.

        If your cost of acquiring avios is greater than 0.8p, you’ve saved money.
        If your cost of acquiring avios is less than 0.8p, you’d have done better to give British Airways the 5000 avios instead of £40.
        Only you know which is best for you Harry!

        For me, a realistic one way cash price for my most common flight is around £47.50. It should be less. But let’s say it’s £47.50. This is calculated by lots of finger in the air stuff and balancing other options for making the trip, against BA’s options and annoying change fees, mixing in a factor for avios booking flexibilty (mitigated by the fact that I can have 4 other airlines 2 of whiom are cheaper than the £47.50) and coming out to a cash fare equivalent generally realistically attainable and would be paid by me, of £47.50 per one way.

        Take the £17.50 for RFS off this and this leaves a cash cost for my regular fare of £30.00. This £30 can be paid most of the time by 4,000 avios. So 5,000 avios is, to be, woth £37.50.

        Five years ago, 5,000 avios was worth £61 to me. But prices and the amount of avios BA requires for the route have changed significantly in that time. .
        5,000 avios is now worth £37.50 on my route and oddly enough, for other quite different routes I would use avios for, my valuation also now works out the same.

        So although my and your calculations are a lot closer together Harry, now that you’ve helped me eliminate my error in double counting RFS, I still value 5,000 avios at only £37.50 and not the £40 you’re willing to pay to hold onto them, Harry. So I;d have paid these bookings all with Avios and held onto my money.

        If your cost of acquiring avios is greater than 0.8p, you’ve saved money.
        If your cost of acquiring avios is less than 0.8p, you’d have done better to give British Airways the 5000 avios instead of £40 and go get some more!.
        I guess we each have to keep revieiwng it regularly…. and who knows what the upcoming devaluation will do to these figures?!!


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