Why even peak-time Economy Avios redemptions have become poor value

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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 SaverBA 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.

British Airways BA 787

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?

No.

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

More importantly:

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’)

versus

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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Comments

  1. Do BA still permit open jaw using a companion voucher, thinking of out to HKG and back from BKK with a few days in Vietnam between?

    If yes, can I book the outbound using the companion, book the return using Avios and then phone and combine?

  2. Lady London says:

    I’m not sure that losing your card more than x times ever, or losing your card more than x times in a certain period, wouldn’t get your credit file marked as more risky? Or is that just for insurance.

    • Lady London says:

      @Jason I would suggest checking money+Avios and being sure that wouldn’t work out a value for you. Base miles are over 22k on that route.

      Other than the options mentioned by @Triprep you could look at AA to Oz then connect cheaply in cash , or using Avios keeping it on same ticket if you want EU261 protection as this would protect an AA . outward journey (not the return half if also AA). For the Transtasman flight I’d suggest you try LatAm in J which is great.

      The next time I go I will surely check routing via US. There has been a great increase in number of flights between US and Oz in the past yes or so between UA and AA. Doesn’t mean the Americans haven’t still grabbed all the new seats too with their massive credit card bonuses but I plan to check. As cash fares to the US are relatively cheap right now I plan to look first and cash to the USA then award booking down to one of several Oz destinations that have expanded from the US then a further hop Transtasman to final destination. Avios is much cheaper for relatively long journeys in this region compared to cash fares a lot of the time especially close in.

      As @Triprep has mentioned if you’re looking for Avios seats to Oz/NZ going anytime after a date in early December (depending on the year, from sometime 8-15th) then I want some of what you’re smoking 🙂

  3. Benylin says:

    OT: Is the £50/200/400 back after £200/600 spend still available or all taken up? Realised I had a few supplementary golds I haven’t added to an online account.

    • You won’t get any offers until a week or so after adding them to your online account

    • You can only try seeing if they pop up after you register the cards online. Valid for another month or so..

  4. jonathan lethbridge says:

    You are shocked that BA is devaluing everything it can?!

  5. Sometimes offers value on a long haul one -way. Friend had to get home quick for a funeral and the cost was 10k virgin miles plus tax against a huge full single fare…..

  6. Is LH 35,000 one way or return? There used to be an option to pay taxes in miles too which removed a hefty tax element from the total miles ‘price’ to pay

  7. Quick question ‘re the amex plat 18,000 referal bonus, when does this reset? Calender year or anniversary year?

  8. One size doesn’t fit all. Got asked to Thailand over Xmas this year with 3 weeks notice. Cash fares were £1000 plus and even they were with dubious airlines with horrible connections. Found a BA flight on Xmas Eve direct to BKK for 30k avios and £230 , and a return back with Air Italy for 15k avios and £225 on the peak weekend back to the UK (5/6 Jan) Very happy with that and no mucking around with a ex-eu on Xmas Eve. I’m having a nice weekend in Milan on the way back or I may see if a HKG flight opens up on Saturday as it’s only £60 or so surcharge to fly back from there, the joy of avios flexibility.

  9. Barbara Barnes says:

    I had a family account with avios. I now have a single account in my name in British air ways (their doing). But only half the amount. How do I find out where they have put my husbands miles? He’s never had an account in his name. Emailing them has proven pointless.

    • Genghis says:

      Have you tried “forgot password” on BAEC and entered your husband’s email address?

  10. Interesting reading Rob. In my experience I can sometimes find value in my route (YYC-LHR) given there is little competition. Just in September, during the “half price long haul economy” promo I got an off-peak one way for 8,250 avios plus £150 in charges. A return typically goes for roughly £750 GBP so I’m happy with the value I got – nothing amazing by any means but for my family of 4, it added up. At full price of 25,000 avios, I probably wouldn’t be interested.

  11. I’m probably more of an average avios customer than an average headforpoints reader in that I don’t travel for work or have a 6 figure salary.
    I had a Amex Gold that I was hoping to churn but I don’t think I would meet the spending requirements again. Last year I only made it because I paid for a group holiday and got the cash back from my friends.

    I have about 42,000 avios and just can’t find decent way to use them. Even European short haul seems poor value when I frequently buy Ryanair flights for £10-30 return. Living in East London, Stansted is also my most convenient airport.

    I’m definitely too poor for this hobby! Haha

    • Try European business class on BA and enjoy the civility of priority check in, an airport lounge, priority security, priority boarding, empty middle seat, free food, unlimited free champagne etc ….

      • FirstClassLad says:

        … I concur with ROB, for a special occasion. Otherwise use the Avios to reduce a cash booking. (Part Avios Part Cash)

      • Thanks, I’ll give that a look!

  12. Nigel Williams says:

    OT – Wife wants to redeem Avios for a trip to Florida.Cost is 1600 cash total or 65000 Avios (130K, but using 2-4-1) + 873 Taxes in Premium Economy / WTP,

    For me as a first time Redmption, that seems OK – as my maths would be:
    1600 – 837 = 763
    65000 / 76300 = 0.85p per Avios

    Am I getting my sums right?

  13. Nigel Williams says:

    Actually, wrong sums!
    1600 – 873 = 727
    65000 / 72700 = 0.89p per Avios

    • Genghis says:

      It’s pence per avios so 72700 / 65000, assuming no value on 241 of course

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