BA’s new trial of ‘£1 taxes’ on short-haul Avios redemptions is the gift that keeps on giving, in terms of finding intriguing new content for HfP.
First, to clarify …..
Yesterday we ran article showing how Avios flights which involve a UK regional connection had gone up sharply in price. I suggested that this was probably an IT issue, and BA confirmed to me during the day that it was. They are working on a fix. Whether you book now and try to reclaim the overpayment later, or wait but risk losing your long-haul seats, is your call.
Onto the next quirk with the £1 Avios tickets
There has been a LOT of discussion about how cancellation fees would work with these new tickets. Let’s take a typical pricing schedule for a return Club Europe flight, off peak:
I wasn’t sure why people were confused about cancellations. Most people think that the Avios cancellation rule is:
You get all of your Avios back, less a cancellation fee of £35 per person
That has NEVER been the case. In actual fact, the rule has been:
You get all of your Avios back, less a cancellation fee of £35 per person or the taxes paid, whichever is lower
Anyone who ever booked one-way European redemptions will know this, since the tax on a one-way redemption is £17.50 in Economy or £25 in Business. When you cancel such a ticket, you are not asked for an extra payment.
So, in the situation above, someone who books a ticket for 25,500 Avios + £1 in taxes and charges will only pay a £1 cancellation fee. This is in line with standard British Airways Executive Club policy.
There are clearly issues here, of course, because it could encourage ‘unhelpful’ behaviour. Let’s imagine that your parents live in Edinburgh and you go home 3-4 times per year, but only at short notice if you’re not busy at work and your diary is empty that weekend. As long as you have enough Avios, you can block book flights every weekend for the next 11 months. Every Wednesday, you can decide if you want to fly up to your folks that weekend or not. If you decide not to, you cancel – all you’ve lost is £1. Cancelling 48 out of 52 flights every year will only cost you £48 in fees, which is peanuts. Unfortunately for everyone else, you have blocked out huge chunks of Avios availability which someone else could have used.
And yet, and yet ….
Take a look at this screenshot:
This is from a reader who cancelled a ticket booked under the new £1 regime. For clarity, he was outside the 24 hour ‘free cancellation’ window at this point.
The reader had booked the ‘least Avios, most cash’ option. This was how the one-way flight looked:
The reader had gone for ‘2,150 Avios + £55.50’.
When he cancelled, he was expecting to get (£55.50 – £35) £20.50 back, plus his Avios.
In fact, he got £55 back.
For unknown reasons, it seems that BA is only imposing the cancellation fee which would be charged if you selected the ‘most Avios, least cash’ option, even if you go for a different option.
There is one interesting thing to learn from this. What we said earlier in the week is that, whilst the ’50p / £1′ option is NOT the best value, it would make sense if you were fairly sure that you might cancel your flight.
It turns out that it doesn’t matter. You can seemingly book using any of the new pricing options – the best value one above is 6,500 Avios + £17 for the one-way flight – and you will still only pay 50p for a one-way cancellation or £1 to cancel a return, per person.
Be clear that British Airways may fix this cancellation oddity at any point. The cancellation price you pay will be based on the policy in place on the day you cancel, not the day you book.
There are another two articles in this mini-series of ‘unintended quirks with the £1 Avios pricing trial’ to come, so keep reading over the weekend.
How to earn Avios from UK credit cards (May 2022)
As a reminder, there are various ways of earning Avios points from UK credit cards. Many cards also have generous sign-up bonuses!
In February 2022, Barclaycard launched two exciting new Barclaycard Avios Mastercard cards. You qualify for the bonus on these cards even if you have a British Airways American Express card:
There are two official British Airways American Express cards with attractive sign-up bonuses:
You can also get generous sign-up bonuses by applying for American Express cards which earn Membership Rewards points.
The Platinum Card has doubled its sign-up bonus to 60,000 Membership Rewards points, which convert to 60,000 Avios, if you apply by 1st June 2022.
Run your own business?
We recommend Capital On Tap for limited companies. You earn 1 Avios per £1 which is impressive for a Visa card, along with a sign-up bonus worth 10,000 Avios.
You should also consider the British Airways Accelerating Business credit card. This is open to sole traders as well as limited companies and has a 30,000 Avios sign-up bonus.
There are also generous bonuses on the two American Express Business cards, with the points converting at 1:1 into Avios. These cards are open to sole traders as well as limited companies.
Click here to read our detailed summary of all UK credit cards which earn Avios. This includes both personal and small business cards.
(Want to earn more Avios? Click here to visit our home page for our latest articles on earning and spending your Avios points and click here to see how to earn more Avios this month from offers and promotions.)