Maximise your Avios, air miles and hotel points

How ‘taxes and charges’ on Avios redemptions from the US got out of control

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

The level of ‘taxes and charges’ added to long-haul Avios redemptions on British Airways is always a sore point.

In general, I use a ‘finger in the air’ sum of £550 for the taxes and charges on a Club World or First return redemption from London (£650 for North America) whenever anyone asks what they will be.

That obviously isn’t small change, but it still gives acceptable value for your points most of the time as long as you are redeeming for Club World or First.  The biggest threat to Avios – given BA’s dominant UK position – is not from other frequent flyer schemes but from aggressive sale fares from other airlines.

Avios wing 11

When you have Qatar Airways regularly offering Business Class tickets to Asia for £1,000 in a sale, admittedly starting elsewhere in Europe, for a superior product then it offers clear competition.  It also earns Avios and tier points.

Avios is, of course, under threat from other angles.  You can switch from a BA credit card to a different rewards credit card.  You can convert Nectar points, Heathrow Rewards points or Amex Membership Rewards into a different treat. 

You can only squeeze things so far, and £1 earned by Avios from Sainsburys is worth a lot more – because it is ‘real’ money – than £1 transferred across intra-group from British Airways.  If people stop seeing value in the scheme, IAG Loyalty will stop seeing the money coming in.

But be grateful you don’t live in the US ….

What you might not realise, if you live in the UK, is how reasonable BA’s ‘taxes and charges’ are compared to what a US resident must pay.

The ‘charges’ element of ‘taxes and charges’ is just a made up number, which BA pockets.  It doesn’t actually reflect anything in particular and it has no qualms about changing it on a market by market basis.

Here’s a little Sunday quiz.

The ‘taxes and charges’ on a Club World return ticket from London Heathrow to New York JFK are £675.

(It is worth noting that this number has increased by £140 since I last did this exercise in 2017.  Only North America has seen such increases – taxes elsewhere have remained roughly flat since 2017, adjusting for Air Passenger Duty.)

What do you reckon the ‘taxes and charges’ are on a Club World return ticket from New York JFK to London Heathrow and back?  Here’s a clue – it isn’t £675.

£500?

£600?

£700?

£800?

£900?

£1,000?

No, sorry, you’re still wrong.

The actual figure is an astonishing £1,279 return. 

You can prove this yourself by doing a dummy booking on ba.com.  You need to click through to the payment page for it to recalculate to the exact number.

You should see this:

Why is this?

It isn’t entirely clear why BA treats North America like this.

You don’t see it with other markets.  A return Club World redemption to Dubai is £542.  Book the trip in reverse and you pay £561.  That’s near enough the same, given currency fluctuations.

One view is that, because Avios are so easy to earn in the US (BA has, in the past, given out 100,000 Avios as a credit card sign-up bonus) it tries to create a level playing field with the UK by adding extra charges.  This ‘protects’ UK Avios collectors because it reduces the willingness of US members to redeem on transatlantic flights, with many choosing to use them on domestic American Airlines and Alaska Airways flights instead.  This is only a theory though.

Even if you live in the UK, there is a lesson here

If you are booking Avios tickets to North America, do NOT book them as 2 x one-way tickets.  This is because the ticket from London will attract the lower UK level of ‘taxes and charges’ whilst your flight home, when booked on a separate ticket, will attract the higher US level of ‘taxes and charges’.

For example, as we noted above, a return ticket from the UK to New York has Club World taxes of £675.

Booked as a one-way in each direction, the total taxes are £455 outbound and £523 inbound, for a total of £978.

You should bear this in mind if, for example, you see a special one-way cash offer from a low cost airline from the UK.  Don’t think that booking the outbound flight to the US for cash and then using Avios for the return is a good deal, because you will be paying an inflated level of ‘taxes and charges’ on the flight back.

PS.  Remember that using your Avios to fly on Iberia saves hugely on taxes and, for the US East Coast, Avios.

An off-peak Business Class return from Madrid to New York, booked via the Iberia Plus website to avoid BA surcharges, costs just 68,000 Avios + $180, a huge saving:

You can learn more about redeeming Avios on Iberia here.


how to earn avios from credit cards

How to earn Avios from UK credit cards (June 2021)

As a reminder, there are various ways of earning Avios from UK credit cards.  Many cards also have generous sign-up bonuses!

There are two official British Airways American Express cards:

British Airways American Express card

British Airways American Express

5,000 Avios for signing up, no annual fee and a companion voucher for spending £20,000 Read our full review

BA Premium Plus American Express card BAPP

British Airways American Express Premium Plus

25,000 Avios and the UK’s most valuable credit card perk – the 2-4-1 companion voucher Read our full review

You can also get generous sign-up bonuses by applying for American Express cards which earn Membership Rewards points, such as:

Nectar American Express

American Express Preferred Rewards Gold

Your best beginner’s card – 20,000 points, FREE for a year & two airport lounge passes Read our full review

American Express Platinum card Amex

The Platinum Card from American Express

30,000 points and an unbeatable set of travel benefits – for a fee Read our full review

We also recommend Capital On Tap for limited companies. You earn 1 Avios per £1 which is impressive for a Visa card:

Capital On Tap Business Rewards Visa

The most generous Avios Visa or Mastercard for a limited company Read our full review

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.)

Comments (47)

  • Definitas says:

    I don’t put a true value on my Avios. I value them nominally at 1p (the minimum Rob says to expect). The vast majority of my flights are Transatlantic in J (3-4 times per year) and I try to “earn” two 2-4-1 per year. 100000 Avios at 1p plus £1350 tax and charges gives me 2 semi-flexible tickets in J for £1125 each and I am only interested in what it costs me, not what I am actually Saving. Fortunately, being retired and able to plan ahead, I can almost always book immediately the seats are released. All that said, we have pretty much reached the limit of the amount I would actually pay for J, especially on some of the older BA aircraft, some of which have been pretty tired. That and the very mediocre lounge at Chicago O’Hare definitely devalues the “value” of paying for J. We have flown return in Y with AA and paid a seat selection fee for one of the pairs of seats at the back of the 787 where there is a galley but no toilets. flying both ways in the daytime for £500 cash fare per person instead of £1125 pp and overnight return for a reward flight and all that earning it entails has put it close to the tipping point for us. Whilst the £GB has been so weak against the $US, internal AA redemptions have been good value though

  • Chrisasaurus says:

    Maybe it’ll become an option again one day but sadly neither legs are right now: but BA1 outbound to jfk and Norwegian back in premium on the daytime flight was incredible value…

  • Sam G says:

    I think it’s the combination of large quantities of Avios being freely available in the US + business class airfare generally being more expensive US-EU-US, so wanting to keep a “value” balance of sorts to limit demand to a reasonable level

    It’s interesting as other posters have mentioned, this makes BA a relatively expensive $ option – Delta to the EU etc doesn’t attract any fuel surcharge. But BA availability is usually a lot easier to get, so it’s swings and roundabouts

  • Andrew says:

    > An off-peak Business Class return from Madrid to New York, booked via the Iberia Plus website to avoid BA surcharges, costs just 68,000 Avios + €180, a huge saving:

    Actually your screenshot shows US dollars, so it’s an even bigger saving (about €30/£25 less right now).

    • Rob says:

      Weird. So it does. My brain assumed it said Euro and didn’t spot it.

  • Liz says:

    We recently compared paying for business tickets (BA Sale) from the US to Athens on BA versus using Avios. Using Avios would have cost $4074.36 and 173000 Avios using the companion voucher or $4074.36 and 346000 Avios. Purchasing the sale tickets cost us $3714.36 (zero Avios) for both of us.

    • BS says:

      And you earn avios on that cheaper fare too.
      BA apologists will cry that you get a more flexible ticket with the avios. But with the FTV availability this difference is vastly reduced.
      One of the reasons most of my avios are now heading mainly to nectar, as I really cannot usually get 0.8p of value out of them from BA in the current environment.

  • Andy C says:

    What I don’t understand is why BA (and other airlines) are allowed to impose a “carrier surcharge”, which, as Rob says in his article, is just a made-up number. If this is pure profit for BA, it should surely be part of the headline ticket price. Otherwise, they are being misleading about the actual cost of the ticket. I am surprised that consumer law allows this misleading practice. Does anybody know the background to this practice, and whether it has ever been challenged by a regulator or in the courts?

    • Rob says:

      It is part of the headline ticket price if you buy a cash ticket.

      The only place it is separate is on certain corporate deals, where a company gets a price of £x per ticket but all surcharges, inc BA’s made-up ones, are added later. As a B2B transaction normal consumer protection rules don’t apply.

The UK's biggest frequent flyer website uses cookies, which you can block via your browser settings. Continuing implies your consent to this policy. Our privacy policy is here.