Virgin Money

How to book low tax Avios redemptions on Iberia – Avios Redemption University – Lesson 11

Links on Head for Points pay us an affiliate commission. A list of our partners is here.

The “Avios Redemption University” series is a good starting point for beginners, although I hope everyone will learn something from it.  Click here to see the other “Avios Redemption University” articles.

This article explains how to book Avios redemptions via Iberia Plus, and how you can save hundreds of pounds in taxes by doing so.

When an Avios collector in the UK looks for a long-haul redemption, British Airways is the obvious choice of airline. However, the taxes and charges can often be very high – around £550 per Club World seat flying east, and around £650 flying west.

One way around the taxes problem is to redeem on Aer Lingus, the subject of a future article.  Often overlooked in the hunt for low taxes, though, is BA’s sister company Iberia.  Taxes on Iberia flights are often a fraction of those charged by British Airways.

Iberia has extended its UK connections network.  You can fly from Manchester, Birmingham and Edinburgh to Madrid with Iberia Express, which makes it a lot easier to use Avios to connect to an Iberia long haul flight. There are also plenty of budget airline options.

How to redeem Avios on Iberia

Iberia has an obscure route network

Iberia has been through a substantial restructuring since being bought by IAG, the parent company of British Airways.

To IAG’s credit, Iberia has been turned around. 16 new long-haul aircraft – 8 x A330’s and 8 x A350’s – have been delivered or are on order for delivery by 2020. There is a decent new business class seat, with an even better version on the A350 (see my Iberia A350 review) and the long-haul network is expanding again.

The great news is that the new destinations being added are places you would actually wants to visit such as Tokyo, Havana and San Francisco.  Avios demand for Iberia’s historical routes to places like Medellin, San Salvador and Managua was probably lower.

These are the non-European Iberia destinations:

  • Africa – Algiers, Casablanca, Dakar, Marrakech, Oran, Tangier, Johannesburg
  • USA – Boston, Chicago, Los Angeles, Miami, New York, San Francisco
  • South America – Bogota, Buenos Aires, Caracas, Lima, Medellin, Mexico City, Montevideo, Quito, Rio do Janeiro, Santiago, Sao Paulo
  • Central America and Caribbean – Guatemala, Havana, Panama City, San Salvador, Santo Domingo (Dominican Republic), San Jose (Costa Rica), San Juan
  • Asia – Tokyo, Shanghai
  • Middle East – Tel Aviv

All of these are flown from Madrid.  Note that some of the African routes are served with short-haul aircraft.

Iberia has vastly improved its business class seating

Iberia has no First Class.

The great news is that, over the last five years, Iberia has installed new fully flat seating across its long-haul fleet.  This is the A330 version:

Iberia business class seat

I flew this on a Madrid to London flight as you can read (and see) here.  Iberia runs a few London to Madrid services a week with long-haul aircraft and flat beds in business class because it needs the cargo capacity offered by the bigger aircraft.  The new A350 version has a few tweaks which make it even better.

How to price Iberia Avios rewards

This isn’t as simple as it could be.  Iberia has its own Avios reward pricing chart with its own peak and off-peak dates (click to enlarge):

Iberia redemption chart

and

Iberia redemption Avios chart

This chart is NOT the same as the British Airways chart:

The charts are nearly the same, but not quite.

Let’s take New York as an example. Both British Airways and Iberia price New York as a Zone 5 redemption. However:

British Airways charges 100,000 Avios off-peak and 120,000 Avios peak for a Club World flight to New York

Iberia, as you can see above, charges 68,000 Avios off-peak and 100,000 Avios peak for a Business Class flight to New York

There are not many destinations which are served by both BA and Iberia, of course, so the opportunities for arbitrage are limited. You also need to factor in the cost and time of getting to Madrid, although if you live outside London it is not massively more complex than changing planes at Heathrow.

A word about peak and off peak Avios dates

Just to make life even more complex, Iberia has its own list of peak and off-peak dates. This is different from the British Airways list. Here is the Iberia peak dates chart for 2019 (click to enlarge):

Iberia Avios off peak calendar 2019

Iberia Avios off peak calendar 2019

Iberia Avios off peak calendar 2019

You can compare it with the British Airways peak and off-peak chart in this HFP article.

For clarity, the Iberia peak and off-peak chart is used even if you book an Iberia redemption via ba.com.  It isn’t exclusively for redemptions booked via Iberia Plus.

October half-term, for example, is a peak week for British Airways redemptions and peak pricing is in force. Iberia does not treat this week as a peak week.  During such periods the price differences can be stark:

  • London to New York, BA Club World, is 120,000 Avios during October half term
  • Madrid to New York, Iberia Business Class, is 68,000 Avios during October half term

And that’s before you factor in the massive difference in taxes ….

Iberia is the home of low taxes (but only on the Iberia website!)

Iberia Plus does not charge the full range of airport taxes and fuel surcharges imposed by ba.com.  This is a BIG thing and the main reason – as well as the better seat and potentially lower number of Avios needed – to consider Iberia seriously.

Let’s look at Madrid to New York in Business Class, return.  Iberia, when you book on iberia.com, will charge 68,000 Avios plus £155 return on an off-peak date.

A BA redemption from London to New York (via ba.com on a BA plane) on the same route in Club World costs 100,000 Avios plus £667 on an off-peak date!  That is, by any stretch, a big difference. It makes it well worth heading to Madrid to start your trip if you are price concious.

More interestingly, if you try to book the identical Iberia Madrid to New York flight on ba.com using BA Avios, it will charge you £382 of taxes!  This is for the SAME Iberia flight which costs only £155 of tax on iberia.com using Iberia Avios.

Now, of course all is not plain sailing:

  • From the UK, you need to fly to Madrid. However, if you are not based in London you will be taking a connecting flight anyway. And the saving probably justifies not flying direct from London.
  • The London to Madrid flight cannot be booked on the same itinerary as the Madrid to New York flight or you will be obliged to pay UK Air Passenger Duty at the long-haul rate. Since you will have separate tickets, IB is not obliged to look after you if you miss your long-haul flight – although if you fly IB from London, it is very unlikely they would abandon you if the delay was down to them.
  • A flight from London to Madrid, return, costs 15,000 Avios and £35 in Economy – but that is hardly making a great dent in your £512 taxes and charges saving (£667 – £155)
  • Iberia reward availability is not great as they fly far fewer seats to New York than British Airways

You need to open an Iberia Plus account to get the best deal

Note that, to get the £155 of taxes for Madrid to New York in our example, you must book on the Iberia website and use Iberia Avios. If you try to book this itinerary on the BA website, BA will add fuel surcharges and other ‘random stuff’ which adds up to £382.  This means that you need to open an Iberia Plus Avios account.

Most importantly, you need to open it 90 days before you want to book. You cannot transfer British Airways Executive Club Avios or avios.com points into Iberia Plus Avios if the Iberia account is under 90 days old. (And this little wheeze is probably why.)

Your IB account also needs to have had an Avios earning transaction put through it.  You cannot move your BA Avios into an Iberia account, even if it is 90 days old, if the Iberia account has never had any activity on it.  You need to credit a flight segment or a car hire or a hotel stay to class it as ‘active’ and thus qualifying to receive incoming Avios transfers.  If you cannot put a flight or hotel stay through it, you could transfer some existing hotel points or American Express Membership Rewards points.

A word about Iberia Avios availability

Even if you aren’t convinced to book via Iberia Plus to save money on taxes, you should also note that economy class Avios availability is better on iberia.com compared to ba.com.  There no longer appears to be much difference in business class availability.

Conclusion

There is no doubt that redeeming Avios points on Iberia is confusing if you are used to the British Airways system. You need to get your head around the different peak and off-peak dates as well as remembering that using Iberia Plus will give you a lower taxes charge. You also need to ensure that any new Iberia Plus account you open is ‘activated’ via an earning transaction and that you have opened it 90 days before you need it.

The bottom line, though, is that you can make substantial savings in tax – and sometimes in Avios too – if you are willing to fly the much improved Iberia business class instead of British Airways Club World.

(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.)

LAST FEW DAYS: Earn at least 1,500 Avios with your next Avis car rental
Bits: good Qatar Airways deal to Bangkok (560 tier points!), buy cheap Avios via Groupon (ends 11pm Sat), new Hertz redemption
Click here to join the 13,000 people on our email list and receive the latest Avios, miles and points news by 6am.

Amazon ad
About Head for Points

We help business and leisure travellers maximise their Avios, frequent flyer miles and hotel loyalty points. Visit every day for three new articles or sign up for our FREE emails via this page or the box to your right.

Comments

  1. Feel pretty stupid – I too had a figure of c.£550 for BA longhaul club return. Thought it was increasing to c.£620 for first to US. Planning LHR – JFK then MIA – LHR. Going to be about £1000!
    Hopefully I can just go back up to JFK and get them to turn it into a Return to new york

Please click here to read our data protection policy before submitting your comment.