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. lufthansa have been doing the same thing for about 10 years. It’s certainly very good if you earn you points from flying and have plenty of points – although I know many commenting here are earning the points via amex credit cards and attach a notional “value” on each point. For me the points cost me nothing to earn and i’m happy to redeem them for flights at zero cost (well, 50p in this case).

    • Earning points from flying is not free either if you are paying yourself.

      • yes but for those of us who earn points from work travel (which was primarily why frequent flyer programs were created in the first place, not for amex to hand out with their credit card), the points ARE FREE.

        • Michael says:

          I view the points as being free anyway – I don’t spend more on my credit card for the sake of it just to get points. The only thing i see it as is getting the best value out of my free points.

        • If I waste points (however earned) on something stupid (let’s say, on a coffee machine from the example above) so that I can’t use them on the flight I need later on, then I have to buy that flight for money, and that is not free.
          400 000 avios from the same example equates to 20-23 return economy flights LHR-MOW, each usually costing 250-350 £ (£300 on average). Subtract £35 RFS and you get the value of those avios, for me, at least: 265*20=£5300.
          I like coffee, but I like flying for free more.

  2. It’s an interesting development. Can see it working for those who just want to go to the Med once a year for their annual holiday on points they’ve picked up whilst shopping, petrol etc. Would this be reflected in BA holiday’s I wonder? Easy advertising for BA at the tills: ‘Fly to Europe for 50p or go large and upgrade to Business class for £1″. If that’s their target audience then surely they’d need to release more award availability, which is good news. Also redeeming for hotels now looks a better proposition than before.

    All go this week isn’t it 🙂

    • It is. Bit unfortunate as I have quite a lot of backlog from not being in the office for two weeks and a four day week to contend with on top!

  3. Penders says:

    Tried to use my Avios upgrade voucher yesterday from Moscow to LHR for two people and they quoted me 17k Avios and £50 taxes. When I priced it via BA website it showed 24k and £1 taxes. Their systems haven’t linked up yet (apparently after Easter). I was hoping they would match the taxes and keep the Avios the same!

  4. Navara says:

    Back to the old Airmiles days…. No taxes

    • Exactly and it has just take nearly 20 years to return to that model, now they are doing US a favour by letting us use miles for the charges that were once free.

      So if this is rolled out over long haul, the net result, we have the same thing we once had but now redemption’s are twice as high in real terms.

  5. Optimus Prime says:

    Looks like ANA is looking at introducing dynamic pricing… https://viewfromthewing.boardingarea.com/2019/04/17/will-ana-mileage-club-introduce-revenue-based-award-pricing/

    So far they aim to implement the IATA NDC standard but the same company provides a dynamic pricing redemption platform…

  6. Norman Gunther says:

    Well done BA please make this happen on ALL flights

  7. It has only value if your plans are not 100% sure as you may cancel your tickets and waste 50p… not bad…

  8. Christian Curran says:

    Good for 2 for 1 avoid redemption, as you then get 1p/avios?

    • memesweeper says:

      Unlikely, as ability to pay and add/remove Avios is not available on 2-4-1 bookings now.

      • And, I doubt it ever will be available for 241 bookings as it would then be really valuable and worth the effort to get the voucher, points, and find availability. And I don’t think BA would like that.

  9. Still worth sending MR points to Avios?? (Concidering the mega changes recently)

    • Not until the day before you plan to spend them.

      • Considering it says Up to 3 days to transfer, maybe need to transfer a little earlier.

    • Jimmy Mac says:

      Recently I’ve found converting to HHonors is a much more fruitful way of converting MR, that is of course if you want to stay in a Hilton property. More often than not if you check the Avios points compared to the HH points its a much better deal to convert to HH.

  10. Lev441 says:

    I think in principle this is a good idea, but the question is will it translate into long haul travel and if so, will the value of avios be any better? This could make economy redemptions much more interesting in the future…

  11. Annabelle says:

    OT – how long do MR points and Hsbc premier points take to transfer over to BA avios? Nervously waiting on them to credit for a 2-4-1 booking. Thank you!

    • About 3 days but you’ve also got this Easter weekend.

      First transfer a week most.

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