The general mantra about using airline miles, especially those like Avios which impose hefty fuel surcharges, goes like this – ‘redeeming for Economy flights is a waste of miles’.
In general, of course, this is true. If you try to use Lufthansa Miles & More miles for an economy short-haul flight from Heathrow to Frankfurt, it wants £82 in tax – plus an astonishing 35,000 miles – for an economy short-haul redemption, a truly ludicrous figure.
British Airways managed to knock this problem on the head for short-haul redemptions by introducing Reward Flight Saver. BA rarely gets the credit it deserves for being the only European airline to tackle the problem of ‘taxes and charges’ on short haul.
By capping taxes on European flights at £35 in Economy / Euro Traveller, you will usually be getting around 1p per Avios of value. This is ‘real’ value as you would otherwise have bought the ticket for cash – not ‘finger in the air’ value based on some notional value of how much you would pay for a business class seat.
Is it true that long haul economy redemptions are a terrible use of Avios?
Almost three years ago, I ran an interesting experiment which showed that – in many cases – redeeming Avios for peak season Economy / World Traveller long haul flights was often decent value. Not every route, by a long way, but there were some deals to be had. The widely held view that all long haul Economy redemptions are rubbish was wrong.
Today I thought we would see what has changed. The answer is ‘quite a lot’ – and not in a good way.
Here is a sample of British Airways pricing from their Low Fare Finder tool.
These are the CHEAPEST Economy return tickets available during August 2019 at the present time. Remember that these flights may be at inconvenient times or inconvenient days of the week. In reality, the flights most convenient for you may be pricier, so it is possible that in reality the results will not be as bad. These are also ‘hand baggage only’ fares, and Avios tickets come with a free suitcase.
I compare the cash cost to the ‘Avios plus taxes’ cost. To be fair to BA, I only looked at flights departing between 1st August and 24th August 2019. Prices tend to dip in late August because of the Bank Holiday but this is too late for anyone with children who return to school in the first week of September.
New York – £428 or 40,000 Avios + £375
Miami – £499 or 50,000 Avios + £375
Las Vegas – £709 or 50,000 Avios + £375
San Francisco – £481 or 50,000 Avios + £375
Barbados – £574 or 50,000 Avios + £336
Mumbai – £609 or 50,000 Avios + £324
Hong Kong – £719 or 60,000 Avios + £347
Singapore – £598 or 70,000 Avios + £362
The ‘pence per Avios’ score comes out like this:
New York – 0.13p
Miami – 0.25p
Las Vegas – 0.67p
San Francisco – 0.21p
Barbados – 0.48p
Mumbai – 0.57p
Hong Kong – 0.62p
Singapore – 0.47p
Have long haul Avios redemptions always been such poor value?
I ran this same example almost three years ago. In general:
the price of cash flights is generally the same or a little lower on most routes (I am comparing August 2016 flights booked in March 2016 vs August 2019 flights booked in January 2019)
the taxes and charges on economy redemptions have crept up by about £75 for the US and £35 elsewhere
in 2017, BA made ALL of August ‘peak’ in terms of redemption pricing. Until then, ALL Tuesday and Wednesday flights were treated as ‘off peak’ irrespective of the month. Here is the 2019 peak and off-peak Avios calendar. This makes a MASSIVE difference. New York, for example, jumps from 26000 Avios – if you could have travelled on a Tuesday or Wednesday in August – to 40000 Avios.
The net result is that using Avios for BA Economy flights has become substantially poorer value over the last couple of years. When I ran this test in March 2016 I concluded that we had potentially been unfair in writing off all economy redemptions as poor value. Today, I am less convinced.
The list below compares:
the value per Avios for a BA economy flight for travel 1-24th August 2019 (taking the lowest BA cash fare on sale in January 2019 and using peak rate Avios pricing as August is now ‘all peak’)
the value per Avios for a BA Economy flight in August 2016 (taking the lowest BA cash fare on sale in March 2016 and assuming the Avios redemption was done on a Tuesday or Wednesday to pay the off-peak rate)
There are three caveats to this data:
Cash pricing is for ‘hand baggage only’ fares, so the Avios option improves if you are taking luggage
Avios tickets are refundable for a £35 fee whilst cash tickets are non-refundable
On the other hand, cash tickets will earn Avios back when you fly
Here we go:
New York – August 2019 value per Avios: 0.13p August 2016 value per Avios: 0.50p
Miami – August 2019 value per Avios: 0.25p August 2016 value per Avios: 0.74p
Las Vegas – August 2019 value per Avios: 0.67p August 2016 value per Avios: 1.37p
San Francisco – August 2019 value per Avios: 0.21p August 2016 value per Avios: 0.92p
Barbados – August 2019 value per Avios: 0.48p August 2016 value per Avios: 0.91p
Mumbai – August 2019 value per Avios: 0.57p August 2016 value per Avios: 0.75p
Hong Kong – August 2019 value per Avios: 0.62p August 2016 value per Avios: 1.28p
Singapore – August 2019 value per Avios: 0.47p August 2016 value per Avios: 0.60p
This is shocking. Not just in terms of the appalling ‘pence per Avios’ value received – even the ‘best’ route I looked at doesn’t come close to a level where I could justify redeeming, unless I wanted flexibility to cancel – but also how the value has been slowly chipped away.
Like a frog boiling in a saucepan, the combination of:
flat or lower cash fares, partly from the launch of ‘hand baggage only’ on long haul
higher taxes and charges on Economy redemptions, and
the removal of off-peak Avios dates during August
…. has cumulatively crept up on us without being fully noticed. It has wiped out much of the value of the Avios scheme for the ‘average’ customer looking to redeem during the school holiday for long haul economy flights.
Of course, on certain higher priced dates and factoring in luggage fees, the value you get can be a lot better but the base line valuation for long haul Economy redemptions is now pretty darn low.
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