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.

Avios banner

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 ba.com 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. Been looking at one way onward connecting flights to Oz/NZ, some real bargains to various destinations using Avios redemptions and then increasing the cash portion to reduce the amount of Avios required.

    KUL-AKL in Economy One Way on Malaysia Airlines
    Straight Cash Fare £565 (non refundable)
    25000 Avios + £39 (possibly refundable)
    8750 Avios + £164 (paying ££ to save Avios = effectively “buying” Avios at ~0.77p/point)

    My calculations…
    £164-£39 = £125 = 12500p
    25000 – 8750 = 16250
    12500p / 16250 = 0.77p

    So in this example, is an Avios redemption worth….?

    a) £565 – £39 = £526 = 52600 / 25000 = 2.10p/pt
    b) £565 – £164 = £401 = 40100p / 8750 = 4.58p/pt

    ps Please let me know if there’s flaws in my logic/calcs, I’ve also yet to factor in the possible Greater Circle options from the article the other day and the impact of if this is could be the start of a multi leg Avios redemption around APAC.

    Side note, anyone done Economy on this route, trying to work out if 11.5 hours in cramped Economy would be too much…?

    • Guesswho2000 says:

      11.5 hours in Y is definitely too much, in my opinion, I’d try almost anything to fly in W/J/F instead.

    • One of the benefits of award travel is flexibility to cancel or change dates without a high penalty. . I’m not sure about this, but I think paying cash to reduce the number of avios used may take away this flexibility. I seem to remember running into this problem once, many years ago.

      11.5 hour flights in economy? It really depends on what you are used to, and whether the flight is a “means to an end” to get there for that part of the trip. This is the length of our usual route, in economy, and while not exactly enjoyable, we certainly survive it, even 14 hour flights. I must admit though having status (usually silver, but currently only bronze) makes all the difference, and even feels like a necessity. Even ruby means much shorter queues to check-in, early boarding, and being able to choose window/aisle seats, even if only 7 days ahead if flying BA, and Priority Pass gives lounge access.. I am looking forward to getting back to choice of lounges and seats with silver though. Occasional award flights in business are a rare treat for us, but you may well be used to them.

  2. Rob – I think what would be interesting (but maybe very hard), would be estimate the volume of avios going thru your 6 scenarios. Apply average weighting and then this should give us a single point value of avios as defined by the user base… Not sure if this could be estimated looking at total award seat availability, number of BAPP Amex holders, average amex spend and other info from investor relations packs. Surely a side project for your new intern 🙂

    • Intern is now back at Uni! On my own for a few weeks until I get a new full-timer confirmed.

      • At uni the week before Christmas?!

        • Well, he is back doing the work he has to hand in after Christmas, put it that way!

          Rhys will be popping up again – there is a hotel review and a flight review he volunteered to do in the New Year.

        • Can I volunteer to do a review of a family resort somewhere sunny in the Spring? Happy to fly Y despite the company policy being J+

      • I think you should see if you can keep him on a zero hours contract to pop up and also use as ‘holiday cover’ when required. His articles so far have all been good!

  3. Wouldn’t it be wise to be cautious on the floor value too?
    The ‘value’ of using Avios on hotel stays is impacted by the limitations within the T&Cs.
    If you are forced to book at a rate higher than you could get as a cash customer, then that 0.5p/Avios is eroded.

    • You never get worse than 0.5p on ‘part pay’ though, and there are enough options at the 0.5p level to be confident you won’t lose out.

      (We could start a debate on ‘not getting status benefits on Avios hotel bookings’ etc but you need to draw the line somewhere.)

  4. Rob, re your comment about getting value for upgrade to First from Club World. If you dont have status to pick seats at booking and have to pay for Club Worls seats then it’s better to upgrade to First and get free seat choice.
    Best wishes for Christmas

  5. I’ve always appreciated you putting in the effort to put all these scenarios together Rob and I think it’s great for a newbie investigating the value of an avios.

    However, I have always taken issue with your rationale for not valuing First redemptions. Whilst I understand your position that many people are unlikely to pay for a cash ticket in First, I still think it is short-sighted to completely overlook its value. Personally speaking (and I’m sure many would agree with me) I would always look to use my 2-4-1 on a First redemption, assuming I have enough avios. I would even go as far as to say that the hard product in Club World is not really worth wasting a 2-4-1 voucher on, if you have the avios for First. I just feel that to maximise the 2-4-1, you really should be aiming for the top redemption rather than settling for Club World. This view may change once BA rolls out the new business class but until then, I still feel that using my 2-4-1 in First is much better value.

    • I agree with some of that. If an easy come avios rich person had the choice between a Bentley and a Ford Capri picking them up at the airport then I’d be surprised if they opted for the Ford because they couldn’t see the value in the Bentley, simply because they never usually ride in one.
      Then again we are looking at the value of something and value’s a very subjective construct. Personally I wouldn’t value BA’s First over QR’s Biz but if you’re tied to spending a 2-4-1 voucher then you’re valuation’s kinder already directed towards BA.

      • Completely agree with you there on QR biz compared to BA First.

        In this case I’m really looking at the value of an avios when tied to a 2-4-1 on BA. There are many people that would actually pay a cash ticket for First in a sale, which correct me if I’m wrong but could be around the £2K – £2.5K mark (possibly lower?). So I’m just questioning why the value of an avios based on a First redemption under that pricing isn’t even shown?

        • Agree, usually get F to Asia on our 241 every year. Feel it’s worth aiming for. And it’s something we would never ever buy. Last cash comparison for fully refundable in F to HKG was around £ 12k. So that was some value. Again, not that we would be buying.
          However QR ex Eu in J sale is def worth cancelling our F241 to KUL or HKG, which we have done in the past, when flights were around the £850 mark.
          Probably never to be seen again…..

      • I would choose the Ford Capri (at least once). Certainly a more ‘interesting’ experience. My parents owned two when I was growing up, so nostalgia may play a part 😀

  6. Oh dear – and OT…

    Just checked my Iberia account and it’s showing zero Avios with 101,500 having been wiped off “Expired Avios For Inactivity” in April….

    • Sad, but there have been enough warnings.

      • Shoestring says:

        Worth diarising to transfer 1000 Amex MR points once a year to IB, just to play safe. You can always transfer them out again.

      • Not to me there hadn’t been.
        I’d transferred 100,00 from BAEC when I was looking to book an Iberia flight which never materialised. All my Avios activity is on BAEC and I know they’re always OK (auto-convert Tesco) so to be honest I didn’t give it any thought.
        All I had from Iberia was a single email, which I obviously missed – it looked like a marketing mail-shot, and certainly didn’t make things clear.
        Totally accept that I’ve taken my eye off the ball, but I would expect a bit more effort from Iberia, unless they actually want points to evaporate from their books.

        • Shoestring says:

          Look – I’m sympathetic to anybody losing points – but the rules are crystal clear. AFAIK none of the airline points schemes sends reminders to earn a point before the 3 year deadline wipes out points. It’s part of their financial model that they can write off a big chunk of points liability every year – so not in their interest to reduce this with reminders. Ie yes: they *do* actually want points to evaporate from their books.

          As it happens, that obviously helps the rest of us but nobody’s going to be pleased you lost points.

        • Lady London says:

          Isn’t there something legal that says they have to remind you if it’s a significant number of points you’d be losing, even if you were theortically supposed to have noticed it a long time ago in the t’s and c’s? IIRC there’s been court cases on that somewhere like Germany I think. Not sure about the UK.

    • Ouch. I bet Iberia won’t wipe off thy -45000 balance if there’s no activity on my account…

      • Shoestring says:

        haha – MIM’s case is (however) a reminder not to transfer *IN* Avios to an IB account with no activity for 3 years – the points will get evaporated, which is obviously hugely unfair.

        So you could have a mostly dormant IB a/c with 1 Avios in it, but you earned that point 35 months ago. You transfer in 100,000 Avios to do an ex EU from Madrid to save taxes, but leave the points sitting there while you think about it.

        1 month later your IB a/c is 36 months old with no activity & the whole lot 100,001 Avios gets evaporated! That’s how it works.

        • Shoestring says:

          Or you make the ex EU booking but later cancel – the Avios points go back to a dormant a/c so they are also evaporated

  7. Andrew-A says:

    I am another who uses the Avios for trips I wouldn’t pay for, or possibly not even consider doing. This year it was a KUL in first using a 2for1, back from HKG in business. In the main it was a great experience. I wouldn’t consider a cash back card as I do not believe the cash would be used to purchase flights, or even for holidays. Any cash-back would just feed back into the “pot” and be lost in our general spend.

  8. Surely the best value for Avios is NOT to use them on BA at all, given the outrageous fees and charges.

    Example: I recently went round-trip from SFO to HND for 150,000 Avios in Business, and the charges were trivial.

    Or how about AA to Europe one-way for 57,500 in First for a cost of $19?

    I am happy to earn Avios on BA, but try to never redeem for BA flights, but rather use the partner airlines, preferably ex-UK to avoid the insane APD as well.

    • Guesswho2000 says:

      True in general, but short haul RFS flights on BA metal are one of the best uses of Avios.

      • Shoestring says:

        & ‘luckily’ the alternatives/ LCCs to get to our place in the sun don’t really work for us. We live in the South West – only Ryanair is nearer for us than LHR but has poor flight frequency, is almost always no cheaper @ school hols (definitely so if checked luggage gets taken into account).

        Let’s hear it for RFS 🙂

      • Ditto – 30k avios and 140 quid to get 4 of us to Portugal and back in prime summer holiday time is superb. Cash price about £1800 for the same flights….

      • We’re off to Funchal Maderia for New year…….CW around £950 EACH. Good job we booked RFS CW last January…..fantastic deal.

      • But even this can’t compare to the great value of JAL redemptions

        • guesswho2000 says:

          Indeed, JAL, LATAM and Qantas short haul can all provide all excellent value, based on the cash costs of some of their monopoly routes.

      • From London yes, but from elsewhere they’ve got an extra 9k + £35 cost which wipes out much of the benefit over LCC (esp when you factor in extra time for connection and having to use LHR!)

    • True, I’ve been booking flights to Oz/NZ and back via HKG, and found 2 redemption seats with avios on CX home from HKG in first, cash cost would have been £19k – £252 tax plus 240k avios seems a pretty good deal in comparison!

      • Exactly what I like to do with my stash, just did NYC – YVR on CX in First for 55,000 and $38 tax, cash tickets selling for $4000 so a good deal, I convinced myself that I would be downgraded at check in then at the gate ! but no… all good and managed to drink a whole bottle of Krug in the AA
        lounge so a great experience.

      • Excellent result both!

  9. Guesswho2000 says:

    Good article. A lot of the ‘value’ I gain from points is subjective; I would pay cash for J, so there’s real savings when I make redemptions, however I doubt I’d fly anywhere near as much without being subsidised by frequent flyer points, so it’s difficult to put a price on it.

  10. “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?”

    This can be measured based on “willingness-to-pay”. If the business class flight is only £1 more than economic flight, I am sure David would be happy to pay. Increase that until the willingness-to-pay price for David can be found (i.e. when we can measure how much David values biz class flight), and then we can find out how much David values Avois.

    • Bingo. On top of Rob’s excellent estimation methods I also check against the excess I’d pay over economy (if that gives a lower avios value).
      That technique also helps in the Club to First debate. I wouldn’t pay much more than £300 each one-way for such an u/g in most circumstances, but 2f1 does push things into my value threshold. But then so does availability on Ba.com!
      The lost opportunity of status and avios earning from cash bookings is a major aspect in all this too.

      • Agree re availability – sometimes end up in F (longhaul) or CE (shorthaul) due to there only being availability in those cabins!

  11. Well in some occasions you can get incredible value.
    I did manage to book 2x return business class tickets London Heathrow – Kiev Borispol for Champions League final.
    As Liverpool played in this final tickets were extremely expensive and 1x economy return cost £836 or business £1476.
    Well I was really lucky to buy business each way for 11000 Avios + £100 ( effectively better then full 20000 Avios + £25 RFS). So in total it was 22000 Avios + £200 for cash ticket £1476.
    My Avios point has got 5.8p value 😉

    • rams1981 says:

      I used it for the outbound. Saved a fair bit. Was not lucky enough to get the return leg.

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