EXCLUSIVE: BA trialling new Avios pricing – NO taxes but more Avios

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Here is something very interesting.  British Airways is trialling Avios redemptions with virtually ZERO taxes.

Take a look at the screenshot below.  It shows a one-way Avios redemption on British Airways from London Heathrow to Chania in Greece.

If you look at our full list of Avios redemption pricing by route (click here), you will see that Chania costs 20,000 Avios per person in Club Europe each way.

I would expect to see a price of 20,000 Avios + £25 for a Reward Flight Saver one-way redemption.

Instead, I see this (click to enlarge):

The ‘headline’ price is shown as 25,000 Avios + 50p in taxes and charges.

When you click through to the payment page, you are given this list of options:

The ‘proper’ price of 20,000 Avios + £25 is still there.  However, two additional options are shown:

25,000 Avios + 50p

22,500 Avios + £12.50

These two new options are very poor value.

In the first one, you are using 5,000 additional Avios to save £24.50.  This means you are getting 0.49p per Avios.  This is very poor.

In the second example, you are using 2,500 additional Avios to save £12.50.  This means you are getting 0.5p per Avios.  Again, very weak.

There is one upside.  If your plans were tentative, you would basically have no cancellations fees if you did this, as the fee is the lower of £35 or the cash supplement paid.

British Airways trialling Avios pricing with no taxes

It happens in Economy too

If you try to book an Economy return flight to Chania (picture above), you get these options on a peak day:

27,000 Avios + £1

23,500 Avios + £17.50

20,000 Avios + £35 (the ‘usual’ price)

and then the standard mix of ‘Avios and cash’ combinations.

The maths is the same here.  You are using either 3,500 Avios to save £17.50 or 7,000 Avios to save £34.  Both get you 0.5p per Avios or thereabouts.

Is this a good thing or not?

On the face of it, it is fine.  It gives people more options and that is generally a good thing.

Whilst you’d need to be a little crazy to accept 0.5p per Avios if you earned your points from credit card spending, Tesco Clubcard conversions, Heathrow Rewards conversions etc, you may be happy with this if all your points came from flying.

It could be a sign that BA is planning to add 7,000 Avios return to the cost of Economy redemptions and 10,000 to Club Europe and make this the new baseline, as reflected in the reward charts.  This would make BA better off – because the extra Avios are being redeemed at a poor rate – and, bizarrely, may also make the Avios scheme look better to the casual traveller.

I have only seen this happening on the Chania route which implies that it is a small scale test.  I imagine that if most people choose the 50p or £1 option, even though it is bad value for your points compared to the standard Reward Flight Saver option, it will be extended elsewhere.

PS.  If you are wondering why British Airways has not reduced the taxes to zero, there is a technical reason.  ba.com cannot handle a transaction with no charge attached to it.  Until a few years ago, domestic Japan Airlines redemptions has £0 of taxes but ba.com could not book them – it only worked if you added a £1 donation to Flying Start during the check-out process!

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Comments

  1. Mr Entitled says:

    I struggle to use my Avios. I have lots of uses for my cash. This is a positive for me.

  2. Basically this suggests that BAEC is considering paying taxes+fees with Avios at the “discount with Avios” rate. Struggle to see any “benefit” real benefit. and where is the dynamic pricing?

  3. This is the start of dynamic pricing like some
    Of the US airlines are now doing.

    The end of good redemptions is probably near and instead you can get excited about 100k Avios for one way economy LHR -JFK.

    • Mikeact says:

      Dynamic pricing ? Sadly I guess it will eventually be the way if BA go down the US route, or even closer to home, ie KLM.
      Let me give you a ridiculous example, and this may or may not be extreme.
      Monday October 21st. (Hardly Peak Period.) I looked at the price of a One Way Business from Boston to Amsterdam.
      Result ?
      Two direct flights shown on that day.
      1 KLM . Miles required 179000 Charges €188.95. ( Yes, you read that correctly)
      2 Partner flight using Delta. Miles required 56500 Charges €8.95
      Need I say more.

      • What one did you book?

        • Mikeact says:

          Neither ! It was to get my son home, but he found a very cheap TAP back to London via Lisbon.
          I just find it surprising that a partner redemption can save an incredible amount of miles and cash.

      • Michael says:

        What is the best way to burn flying blue miles on a long haul redemption? I’ve got an Alitalia long haul J coming up and I’ve already got some flying Blue miles in my account. I know it’s not the best FFP in the world but I want to have enough to do something useful with them.

        • Promo awards. You will get some interesting value.

        • I’d definitely look at one of their sales – 25-30% off long-haul redemption costs, get UK connection too

  4. Mr. AC says:

    I’ve seen this pricing Tuesday evening on a LHR – DME economy roundtrip (24k + 1£ instead of the usual 17k + 35£ off-peak). However, I assumed it’s a Gold think – the same routing didn’t show this pricing on my wife’s account (Blue).
    Would be also interested to learn if Avios are in fact fully refundable if you cancel.

  5. Andrew says:

    How will this affect passengers who currently enjoy tax-free flights from Inverness?

    • INV flights still have fees and charges, (plus the tax from your destination on the inbound flight if it’s a return).

    • RFS still exists from Inverness. This is only a short haul trial anyway.

  6. Lufty has had this for a LOOOONG time – you can pay taxes with miles. My partner and I used it several times. Not a great value overall but better than pay their crazy cash taxes

    • Genghis says:

      Surely it makes a bad deal an even worse deal?

      • czechoslovakia says:

        If you earned the miles for nothing, a totally free flight (extra 15k miles in place of fees/taxes I think) is something for totally nothing, and arguably better than wasting them on an intra-EU short haul and still paying 80% of the cash fare in “fees”. Paying charges with Miles is especially useful if you have miles due to expire anyway. Something I`d not do myself, but plenty of people waste them. As eg. a neighbour blew 400K on a bean to cup coffee machine from WorldShop! 🙁

        • Lady London says:

          Worldshop has 10% off this weekend btw. But the prices still make me blanch.

      • Lady London says:

        +1

        But there’s more coming from British Airways. A formerly very reliable source has upped their cash prices for avios by 100% in past few days. Converting the price being quoted now to an effective price for a ticket takes it waaaaay over the price of cash for the routes i use.

        So as well as the double whammy on Amex earning, it looks like British Airways, as well as their sneaky whack-up of their so-called taxes transatlantic, that was never announced, is trying to reduce by 50% what your avios will buy as well.

        Now is not the time to hold or plan to collect avios if you can put your business somewhere else that will give you earning and burning ratios you like.

        • Hoping to burn 300,000 shortly, just waiting for the last fortnight in April 2020 to be released, fingers crossed they don’t implement long haul changes before then.

        • Then if things go further downhill for avios collection probably revert to RFS for avios use and other airlines for cash bookings, as I have no actual need to fly from London. At which point we would most likely ditch our BAPPS as the 2 4 1s aren’t that valuable for short haul.

        • Lady London says:

          Dont count on RFS remaining. It’s about the only thing that keeps a lot of avios collectors bothering. If British Airways could attack it, I’m sure they would. Watch out for something sneaky that will affect this.

  7. So maybe this explains why it took me 50 minutes on the phone yesterday to book a redemption EDI-LHR-CHQ-LHR-EDI! The staff member was very apologetic about the time taken, having difficulty with computer and payment system that was playing up.

  8. Norwegian already allows you to use cashpoints to pay for taxes. Probably a response by BA to match them (and reduce BAs cost of avios at the same time).

  9. Michael says:

    Surely if this goes long haul it makes a 241 voucher way way more valuable…..

    • christopher horsfall says:

      Cash and points is not available for 241 vouchers, so no it will not.

      • Michael says:

        I read this as eventually the option to pay taxes with avios will become available as standard…

        So instead of 50k avios + £500 in junk fees for a one way Club redemption – it will be 150k avios + £5 in taxes. etc etc…

        • Interesting thought, but I doubt they would be that generous.

        • Lady London says:

          No, British Airways will get you going both ways.

          They’ll whack up the avios needed but they will never, ever, for any useful length of time unstick themselves from grabbing loads of your cash as well.

          Based on previous form the strategy might take 1-3 years before it is fully revealed – they will up avios then temporarily reduce or give a way out of cash payments or at least a way of significantly lowering them . But rest assured, after the period they planned British Airways will still have the now heightened avios requirement, they;ll just be back to grabbing huge so-called “taxes” cash as well.

          I think the thing that might be useful to understand is when do their deals with other airlines in Oneworld for reward seats the British Airways passenger will pay for with avios, come up for renewal. If British Airways acts as all these goings on are indicating then understanding how long the window is to still get a decent return on existing avios elsewhere would be really useful. But close it will, for sure, that window, as and when those agreeements are renewed by British Airways if they’re determined to give us less for our hard earned avios now.

  10. christopher horsfall says:

    If you value 1 point at 1p, and the cost of that one way flight was more than £225 (20000 equivalent to £200, plus £25 taxes), then the option of reducing the Avios by 9000 for an extra £70 is good value I think, ie paying more cash, not less.
    But then a some of these AVIOS flights are cheaper booking just cash if flying midweek, or even some weekend dates, and you receive more AVIOS and tier points too .
    Maybe if you have no need to keep your AVIOS for a better value 2 for 1 long haul route, or you are earning them from work related flights, then it just matters that the cash element is as cheap as possible. Then this system will be ideal.
    Until BA starts to price reward flights and taxes in a bracket which gives value to the points that is at least close to the purchase price of points (which it is WAAAAYYYY off, the only real value I get is the 2 for 1 redemptions or if I have no choice of dates, and that date happens to be a very expensive one. Tinkering with it this way is pointless (no pun intended) for me, but as Rob says, more choice can only be a good thing, as we are not all in the same position. Way to go BA! But really, 0.5p per mile value????. When purchasing points costs between 1.62 and 3.1p per point, depending on amount purchased.

    OT. I have not noticed this before.
    Johannesburg – Companion fare in premium economy buy one get one free at £1350 return for two people

  11. Interesting . . . Unfortunately my Avios have taken a hit since the Amex restrictions on reapplying for a new card every 6 months. We’d enjoyed this perk in our household account for quite a few years…

    Making the most of my Avios with my flights from Quito to Galapagos this week.

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