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BA cuts Avios taxes to £1 in the UK and Europe – but it isn’t as good as it sounds

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It’s back.  Following a short trial in April, British Airways is rolling out ‘£1 taxes’ Avios redemptions on ALL UK and European routes for a trial period.

Instead of paying £35 (Euro Traveller) or £50 (Club Europe) in taxes and charges on return short haul flights, you can now choose to use more Avios and reduce your taxes and charges to just £1.

Be wary, however.  This is not necessarily a great deal.

Take a look at the screenshot below as an example.  It shows a return Avios redemption on British Airways in Euro Traveller (economy) from London Heathrow to Nice.

If you look at our full list of Avios redemption pricing by route (click here), this would normally price at 8,000 Avios + £35 for a Reward Flight Saver reward redemption on an off-peak date.

Instead, you get (click to enlarge):

New British Airways Avios pricing

The ‘headline’ price is shown as 15,000 Avios + £1 in taxes and charges.

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

£1 British Airways Avios pricing

The ‘old’ option of 8,000 Avios + £35 is not there.  It has actually got cheaper – you are now offered 8,000 Avios + £31.

It isn’t easy, at first glance, to see which option is the ‘best’ value, assuming you have a lot of Avios and a lot of cash.  However, doing the maths:

15,000 Avios + £1 = base offer

11,500 Avios + £21 = £20 spent to save 3,500 Avios = ‘buying’ Avios at 0.57p

8,000 Avios + £31 = £30 spent to save 7,000 Avios = ‘buying’ Avios at 0.43p

5,900 Avios + £61 = £60 spent to save 9,100 Avios = ‘buying’ Avios at 0.66p

5,000 Avios + £71 = £70 spent to save 10,000 Avios = ‘buying’ Avios at 0.7p

4,400 Avios + £81 = £80 spent to save 10,600 Avios = ‘buying’ Avios at 0.75p

As long as you value an Avios point at 0.43p or higher – and all HFP readers should value them far higher than this – you should NOT take the £1 offer.

The only question in your mind should be which of the other scenarios is best for you – all of them are basically letting you ‘buy’ Avios VERY cheaply by using more cash. The only issue is whether you buy a few for a very low price (8,000 Avios + £31 is the best ‘price per point’ spot) or buy a lot for a higher price (4,400 Avios + £81).  Taking the £1 offer is a bad deal.

British Airways reduces Avios taxes to £1

It happens in Club Europe too

If you try to book a Club Europe return flight to Venice, you get these options on a peak day.

This flight SHOULD cost 30,000 Avios + £50 return.  The new headline offer is:

British Airways £1 Avios pricing

…. with the following alternatives:

British Airways £1 Avios pricing

If we do the maths again:

40,000 Avios + £1 = base offer

35,600 Avios + £25 = £24 spent to save 4,400 Avios = ‘buying’ Avios at 0.55p

30,000 Avios + £50 = £49 spent to save 10,000 Avios = ‘buying’ Avios at 0.49p

22,000 Avios + £121 = £120 spent to save 18,000 Avios = ‘buying’ Avios at 0.67p

20,000 Avios + £141 = £140 spent to save 20,000 Avios = ‘buying’ Avios at 0.7p

16,000 Avios + £161 = £160 spent to save 24,000 Avios = ‘buying’ Avios at 0.67p

You get the same result as in the Economy example.  The £1 deal is the worst deal.  As long as you believe you can get more than 0.49p per point on another redemption, it makes sense to pay more cash and use fewer Avios.

Another factor …. cancellation costs

I have just said, twice actually, that the £1 deal is the worst deal.

Except ….

If you believe that there is high chance of cancelling a ticket, the £1 route is possibly the best one.  When you cancel an Avios redemption, the cancellation fee is the lower of £35 per ticket OR the taxes paid.  If you only paid £1 in taxes, your cancellation fee is only £1.

For a family of four, you are getting your potential cancellation cost down from £140 to £4 by taking the least cash route.

British Airways £1 taxes on avios redemptions

Is offering ‘£1 taxes’ 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.

I don’t recommend taking the £1 deal if you earned your points from credit card spending, Tesco Clubcard conversions, Heathrow Rewards conversions etc.  You are getting a poor return compared to taking one of the other deals.

Of course, you may be happy with this new offer if all of your points came from flying or you are ‘Avios rich, cash poor’.

I’m sure that more quirks in the pricing will come clear in the next few days.  And, of course, this is officially still a trial.

PS.  You need to qualify for Reward Flight Saver to get the £1 deal.  We explain Reward Flight Saver here.  This means that your British Airways Executive Account needs to have earned 1 Avios over the past 12 months.  If you have not done this – unlikely for a HFP reader! – you will be shown the full taxes when you try to book.

(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.)

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Comments

  1. One advantage to paying £121 and only using 22000 Avios (in Club) is that you get s75 protection if you pay using a credit card as you’ve paid more than £100.

    • Shoestring says:

      You only have to pay £1 on a credit card if the total purchase cost is over £100, so all the purchase options above (in Club at least but probanly also Economy) would be covered by S75. Interesting legal point as to how you work out the value of Avios points to derive the full purchase cost. You could use 1.6p or BA’s normal selling cost, I suppose.

      • Callum says:

        I wouldn’t imagine Avios would be valued as being worth anything when it comes to working out how much you’ve paid for S75.

        • Charlieface says:

          People have already won cases of S75 with the FOS where they used vouchers to bring the cost below £100, I know someone personally who did this. Avios should be no different

          • Shoestring says:

            You would just compare it to the cash equivalent fare. Club is easy as it’s pretty much always over £100.

          • Jonathan says:

            Does the £100 bit have to be the overall transaction value or individual line items. Say i bought 3 CE tickets at £50 each on one transaction – is that covered? I thought it was line items thats why Ryan Air and the like charged single fares only even for return trips?

          • Jonathan says:

            Actually, i just looked at my BAPP card statement and despite it being one single booking BA charged the credit card 6 times – 3 timed for each persons airfare and 3 times for each persons seat selection so 6 transactions for one booking. Neither transaction alone is over £100 so is this covered by S75?

          • Shoestring says:

            S75 looks at the single aggregate transaction/ payment, not individual fares/ tickets – this has been ruled on by the FOS

          • Charlieface says:

            Thought that FOS ruling was only regards parts of return tickets, not different passengers. Could be wrong, haven’t checked that one up.

          • Callum says:

            Surely a voucher is completely different though? It’s a payment method denominated in a real currency, avios are not.

            Comparing it to the equivalent cash price and using that figure seems even more ridiculous. What makes you say that’s how it works?

  2. Martin Pelant says:

    Some observations:
    * You can no longer save when booking 2x one way tickets (before the change the taxes were capped at £17.50 meaning flights FROM countries with low taxes like Luxembourg could cost as low as 4,000 Avios + £3.30 LUX-LHR. Now they now all seem to cost the same 4000 Avios + £15.50 regardless of direction)
    * Choosing £1 + Avios option might be useful if you have tentative plans as cancellation fee is capped at what you paid meaning you should get all Avios back if you cancel and only pay £1

    • You can still transfer the required Avios to Iberia Plus and make a booking at the old BA rates, such as 4,000 Avios + £3.40 in taxes for an off-peak economy reward flight from LUX to LHR.

  3. My upcoming LON-AMS flights are actually marginally cheaper now if I use the minimum amount of avios and maximum cash!

    Yesterday it was 15k + £210 for 3xCE tickets, today it’s 15k + £196…

  4. What I like about this is that if I am prepared to pay BA or another airline £X for a nonrefundable nonchangeable flight, how many extra avios (Y) would I need to pay BA at the same £X cash point to buy flexibility? And, how does this £X + Y avios compare with purchasing a WTP revenue flight and subsequently UUA to CW where the cost to change on a longhaul booking is typically a fee of around £280 + £35 reward change fee + any difference in fare. It could all get very interesting, especially given the increasing difficulty in collecting avios.

    • I’d agree. I’d Imagine those who collected most of their points by churning cards would be more hesitant to use points to reduce the costs.

      • But you have this flexibility anyway via a redemption. Nothing in this experiment changes the number of seats available.

        • Indeed. The question of value only comes into play when there are flights available for redemption. A very obvious point I know but frequently forgotten in these discussions.

  5. If you value 1 Avios as 1p then the least number of Avios option works out best value.

    40,000 Avios + £1 = £401 equivalent price
    35,600 Avios + £25 = £381
    30,000 Avios + £50 = £350
    22,000 Avios + £121 = £341
    20,000 Avios + £141 = £341
    16,000 Avios + £161 = £321

  6. Sorry if I am being a bit dim but how does this interact with 241. 241 only valid on flights ‘fully’ paid with avios previously. Would this now mean the £1 option, or the old £35 option, or are any of the options now open for 241 (as you say just buying avios)

    • the old version

      • I booked outbound (one way) using a 24-1 last week.

        Yesterday I booked the 4 inbound using the £1 taxes offer.

        I will shortly call BA to merge the bookings and utilise the 2-4-1.

        so (40,000 for the 4 outbounds + 54,000 for the 4 inbounds)

        Would they give back 13,500 avios?

        • In theory 241 bookings can only be done with the ‘old’ £35 / £50 pricing so let us know how you get on.

    • Only the versions with £35 (now £31) tax in Eco and £50 in CE can be 2-4-1’d, I believe.

  7. Mikeact says:

    I thought this was a mistake when I booked yesterday. So I booked three tentative dates at a £ each as not sure of our dates yet….hopefully it should be dead easy to cancel out the two we don’t need later.

    • Lady London says:

      This is where I think there will actually be an effect of this, on seats available.
      – much easier for those who are avios-rich, to make multiple bookings and cancel all the £1 ones they don’t want (possibly replacing with a booking that is less avios more £)
      – as BA wants (I think) this will get more lay punters opening their cupboards and using up their avios. — because it looks simple and cheap (even if punters may intuitively know they might not be choosing the most optimum option)
      — because the punters with only a small stash of avios, perhaps even collected “accidentally”, will not see a way of adding lots of cash to those avios and getting something so they will use them.
      ———those punters using their avios has the following effects
      ——————-punters think they’ve had something from British Airways, and so good feelings for BA amongst punters
      ——————-higher demand for restricted number of seats (couple with the multiple booking-holding possibilities above, this could be a massive effect on some routes/times)
      ——————-BA gets lots of small amounts held by punters that won’t be used. off their books now and used. plus possible other positive accounting/business meaurement effects.

      So all in all quite a good thing… for quite a lot of people. Just not necessarily for “specialists” (us) who look closely.

      I’d rather have RFS as it is now.

      • Lady London says:

        *will not see a way” –> will NOW see a way d** text editor!

  8. Elliot says:

    Would you still get all of your avios back in the event of a cancellation if only paying £1?

    • Mikeact says:

      I meant to add that the flight we eventually want …… I will call BA to see if I can ‘upgrade it’ to the ‘sweet spot ‘ price of £31to get refund of Avios.

    • Lady London says:

      for now.
      As soon as BA detects the £1 cancellation posisbilities referred to by some posters here, you can expect that to change .

    • Yes, of course.

  9. OT: sorry but I posted this late yesterday, so hoping someone has some experience with similar case as Volotea is refusing to rerouting.
    Volotea just cancelled a flight my parents had booked with them for 4 September from Malta to Genoa. They just got an email saying “Flight has been cancelled a refund will be sent to you shortly”.
    This is v frustrating as it is for a wedding & now all the other options cost much more.

    Are they entitled to any compensation?
    They did not even offer them rerouting.

    • pauldb says:

      They are not entitled to compensation with more than 14 days notice, but they are entitled to rerouting. Googling Volotea EU261 suggesting they are difficult.

      You’ll have to complain, being specific that you want rerouting. And you may have to threaten to book your own flight and claim the money back from them … and then actually go through with that threat. Spending the extra on the flights is a risk but what else wll you do if they need to travel?!

      • Lady London says:

        If I could possibly sum up the readies to pay cash flights, as pauldb above advisesthat is exactly what I would do. Make sure you keep records of all conversations (date, time, who with) with Volotea on this. Personally I’d ask them 3 times, or get their “final answer” before I went and booked my other tickets.

        If they don’t provide a rerouting( this does not necessarily mean travelling via a different route it means them providing you a ticket with themselves or another airline) then I think everyone here will agree with me that if you can prove you tried to get Volotea to fultul their obligation under EU261 to reroute you, I would expect you to be reimbursed plus the very minor fees required, if you do a moneyclaim dot gov dot uk for the cost of the tickets and any other costs you incurred due to Volotea’s failure to provide what EU261 legally entitles you to – a rerouting.

        Btw quite a few places like Bologna, Brescia, Bergamo (the new BA route) are quite close to Venice if they would rather look at a cheaper solution to save paying too much cash if they are forced to reroute themselves.

    • 1. Paid on UK credit card? S75 protection means that they could get a new ticket by the credit card provider.

      2. Have they got travel insurance?

      3. Since they were informed more than 2 weeks before the flight, no compo. But they are entitled to rerouting. If the airline is refusing, just ask for a letter/email confirming their final position and then you can go to option 1 and 2 or maybe even court.

    • RIccatti says:

      Ant, download and read EU 261/2004 document — it is readable.

      Italian aviation authority is competent authority here, it might be worth to call them or send an email or even formal complaint.

      Practically, it would be difficult to take Volotea to court (though not unrealistic, they are based in Spain), so you can seek recourse from travel insurance.

      • Lady London says:

        Legal eagles here will know if the fact that Volotea is flying out of the UK, means they can be sued in the UK. I would have thought so.

        I do think that the mention of credit card company providing tickets under S75 (provided they cost at least 100 in the first place being required?) is also excellent and definitely to be pursued as the merchant not having provided what was purchased so credit card co may be asked to.

        You can see why the interchange fee cap is causing problems to the card companies if they are on the hook for this sort of liability!

        • They don’t seem to have a UK address where papers could be served, or any UK offices where bailiffs could be sent if you successfully sued them and they failed to pay. Can bailiffs seize a plane? Do they even own their planes?

          • Lady London says:

            Yes bailiffs can seize a plane.
            I think that happened to Ryanair for non-payment of charges recently.

  10. Sussex Bantam says:

    I’ve been struggling to get my head around what this does for the value of Avios.

    If the majority of redemption is/was on RFS then it seems the new value should be around 0.6p. If I don’t have many Avios I can get the flight for 4,400 Avios plus £81. If I have lots then I can get the flight for 15,000 Avios and £1. My Avios are therefore saving me 0.7p each which is the maximum I should be prepared to pay for them (ignoring arguments about flexibility)

    This seems like a devaluation from the 1p value I would normally put on them BUT the existing option of spending 8,000 and £35 is still (basically) there. So why does this feel like my Avios are worth less than they were before ?

    Head spinning – maybe tea will help ?

    • Shoestring says:

      I don’t think it changes my valuation at all. I guess most people fly rarely enough that they couldn’t ‘acquire’ (or ‘buy’) unlimited Avios @0.7p with Avios + Money options. You’re not actually acquiring any, even if it feels like it. You’re spending Avios – but just have the option to spend fewer than normal if you feel like it.

      So I see it as a mildly generous opportunity while this trial goes on. I’ve been ‘buying’ my Avios @0.8p with Avios + Money for a couple of years now. This looks slightly better.

      • Shoestring says:

        and my valuation is a simple one. I never use Avios when the value is under 1.2p/ point – I’d use cash instead. Hey presto – my Avios are worth minimum 1.2p.

        • Sussex Bantam says:

          I guess it comes down to the point – which Rob does make in the article – about whether you have other opportunities that enable you to get a higher valuation. If you do then nothing has changed.

          I’m in the camp where I acquire more Avios then I can really spend and I tend to spend a lot of them on RFS. The same option I had before is still available – and yet it somehow feels like I’m worse off. And I can’t work out why ?!?

          (And tea didn’t help)

          • Lady London says:

            Well, if you look at the fares that are higher in cash lower in avios, they look just like BA’s long haul award seats.

            More cash required than you would actually need quite a good part of the time , if you just bought a cash ticket instead. But BA is asking you to add avios to that as well.

            To me this also feels like getting around 0.6-0.7p value per avios at best, in other words very similar to Money+avios fares, whereas my valuation of my avios is around 1p. Like Shoestring, if I’ve got any cash at all available then I generally wouldn’t use my avios unless I’m getting a minimum value of 1.25p for them as compared to cash fare.

            Tea’s not helping here either.

          • Sussex Bantam says:

            Third cup of tea – think I understand why this is confusing me. it is because the pricing differentials are not uniform.

            Rather than comparing with the base case what we should actually do is compare each option versus the previous one.

            So for example – moving from 11500/£21 to 8000/£31 is a good move. It costs £10 to save 3500 Avios meaning you are buying Avios at 0.29p

            However – moving from 8000/£31 to 5900/£61 is a disaster. it costs £30 to save 2100 Avios meaning you are buying them at 1.43p

            Other pairs are

            15000/£1 to 11500/£21 – cost £20 to save 3500 Avios. Buying Avios for 0.57p
            5900/£61 to 5000/£71 – cost £10 to save 900 Avios. Buying Avios for 1.1p
            5000/£71 to 4400/£81 – cost £10 to save 600 Avios. Buying Avios for 1.7p

            So – it seems the current deal 8000/£31 remains the best deal. I think…

            Happy to be corrected – off to do some actual work now !

          • Lady London says:

            your calculations @Sussex Bantam, add harder proof to the overall impression this is worse value than the current RFS.

            Whilst offering opportunities for those who are avios-rich or whose view is that avios cost them nothing. So they are prepared to pay out more of them for an air ticket than those of us for whom avios have a value.

  11. Mikeact says:

    Slightly OT but still related to Avios and the, so called , Lloyds Upgrade voucher.
    Some time back, I used one of my vouchers before the expiry date of use, to book two one way CE flights to Santorini next May, right at the end of the 12 month ticket validation. We had no intention of using it, as I am certain the Avios agent said that you can change the date and destination, for the normal fee, as long as changes are made within the ‘same zone’.
    Having just called them, now that our plans are firm. I can certainly change the date and destination, but I now need to pay the additional Avios for CE, as the agent is saying that the voucher bit cannot be moved across as part of the new booking, which basically cuts across my original understanding of moving the complete booking.
    Has anybody tried to do this ? I think I will call back and try a different agent. I know that generally the voucher is normally lost, but understood that this was one way to keep it. Thanks.

    • Definitely try another agent. What from I’ve seen over the past 3 years the Avios adjustments with upgrade voucher bookings are all done manually so of course they can move it over for you. Starting to wonder now if BA staff have been given instructions to aggressively reduce the number of Avios in the public domain!

      • Mikeact says:

        Second agent sorted it……first agent was wrong. Well worth thinking about if you have a Lloyds voucher about to expire, or even if not wanted at present.

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