Maximise your Avios, air miles and hotel points

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

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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 points from UK credit cards

How to earn Avios from UK credit cards (June 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.

Until 18th July 2022 there is an astonishing special offer on these cards. You get 50,000 Avios on the Avios Plus Mastercard and 10,000 Avios on the free Avios Mastercard. You can apply here. We strongly recommend getting the Avios Plus card whilst this offer is running.

You qualify for the bonus on these cards even if you have a British Airways American Express card:

Barclaycard Avios Plus card

Barclaycard Avios Plus Mastercard

50,000 Avios for signing up (A CRAZY SPECIAL OFFER!) and an upgrade voucher for spending ….. Read our full review

Barclaycard Avios card

Barclaycard Avios Mastercard

10,000 Avios for signing up (SPECIAL OFFER) and an upgrade voucher for spending £20,000 Read our full review

There are two official British Airways American Express cards with attractive sign-up bonuses:

British Airways BA Premium Plus American Express Amex credit card

British Airways American Express Premium Plus

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

British Airways BA Amex American Express card

British Airways American Express

5,000 Avios for signing up and an Economy 2-4-1 voucher for spending £12,000 Read our full review

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

SPECIAL OFFER: The sign-up bonus on Amex Gold is increased from 20,000 Membership Rewards points to 30,000 Membership Rewards points until 19th July 2022. This card is free for the first year.

American Express Amex Gold

American Express Preferred Rewards Gold

Your best beginner’s card – 30,000 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

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.

Capital On Tap Business Rewards Visa

10,500 points bonus – the most generous Avios Visa for a limited company Read our full review

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.

British Airways Accelerating Business American Express card

British Airways Accelerating Business American Express

30,000 Avios sign-up bonus – plus annual bonuses of up to 30,000 Avios Read our full review

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.

Amex Platinum Business American Express

American Express Business Platinum

40,000 points sign-up bonus and a long list of travel benefits Read our full review

American Express Business Gold

20,000 points sign-up bonus and free for a year 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)

This article is closed to new comments. Feel free to ask your question in the HfP forums.

  • Wally1976 says:

    I’m not sure if anyone can confirm but I don’t believe the same situation exists with economy tickets. A free months back I priced up economy Avios seats to MCO and the taxes and charges were the same whether I booked it as a return or add two one-ways.

    Of course it’s generally not worth using Avios for economy long haul anyway but there are occasions where it works.

  • chabuddy geezy says:

    One option if you need to book a one way from the US to the UK is a day flight in premium economy. Charges are low, around $50-£75 I think when my friend booked this.

    • chabuddy geezy says:

      Actually after checking a one way in premium economy is £200 in charges.

  • IanM says:

    Starkly in contrast to VA/Delta as I paid $25 for taxes and charges on a Delta one one-way from ATL to EDI via CDG this month

    • Harry T says:

      How many miles did it cost? Was that for business?

      • Phil H says:

        Delta One is Delta Air Lines’ business class. 50,000 miles plus virtually zero tax for the transatlantic leg US to Europe. We were booked to fly LAX-CDG next month, unfortunately now cancelled. Great use of Virgin miles if you can find availability.

      • IanM says:

        It was 59000 VA miles plus $25 in Delta One, ie First Class.

        That was before they doubled the points needed!

  • Matt says:

    Is it cheaper to book both legs of a return to the US together if using a Lloyds voucher (or Barclays)? I mean, if I have booked outbound at t-355 and later add the return when it becomes available, are the total charges higher than if I am able to hold off and book both together?

  • D.C. says:

    What about if you are using a 241 voucher and you are looking for flights in club world or first, flying in and out of the U.S.? You would normally not want to wait for the return dates to be launched before booking your outbound, in case you cannot get the Avios seats you want for both legs

    • geoff says:

      You can still book each flight separately as they become available – if you phone to add the return leg, it is added to the first leg as a return ticket, and you pay return charges. If you book the return yourself online, and then phone later to have the avios adjusted, the trips will remain as separate tickets and you will pay 2 lots of one-way charges. This can be better for taxes to the far east but as above worse for USA trips.

      • Matt says:

        @geoff Thank you for the clear reply. Phoning Avios for Lloyds bookings always meant waiting until 8am so ability to phone to book at midnight may turn out to be an advantage of a Barclays voucher.

  • Alan says:

    I know you’ve said it’s only a theory, but given how readily US credit cards give out massive bonuses, have high earning rates as well as frequent chunky Amex MR transfer bonuses it certainly seems pretty likely to me that leveling the playing field is quite a big bit of the reason. Otherwise with the equivalent cash charges to ex-UK tickets the Avios required would effectively be 50% or less of what a UK customer required, which would just make it far too appealing!

  • ChrisC says:

    Good article but what is missing is the figure for the actual breakdown of proper fees and taxes to show how awful the surcharges truly are.

    On a CASH ticket LHR-JFK return the non BA charges are £ £275.72 (UK and US government taxes and airport fees of which the biggest element is £180 UK APD).

    BA charge £400 for their YQ giving a total (as you say above) of £675.72. This is 60% of the taxes, fees and surcharges total.

    So of your total of £ 1,279.72 total taxes, fees and surcharges on an AVIOS ticket the BA surcharge element is £1,004 (because the proper taxes and airport fees are the same). This £ 1,004 is just under 80% of the cash element and 5 1/2 times the APD.

    And that matches the surcharge on a CASH JFK-LHR return where the proper taxes and fees are $ 372.76 and the YQ surcharge is $1,400 (£1,009!) (give or take allowing for which currency rate converter you use)

    And this is why some of us get annoyed when you lump all these charges in to a single “taxes” figure. Not because it affects the total cash to be paid but because it hides the sheer scale of the surcharge that BA pockets.

    • Heathrow Flyer says:

      In your example does the total overall cash fare work out roughly the same if you priced LHR – JFK vs JFK – LHR? (i.e. in spite of the massive differences in YQ does BA just price down the ‘fare’ element and hike the YQ)

    • Mr(s) Entitled says:

      Great post.

    • The real John says:

      Good on Rob for adding the “and charges” to this article, but does “taxes and charges” really need to be enclosed in quotes every instance?

      Also, a minor point of pedantry, but technically the article is still inaccurate – only the “carrier-imposed charges” are out of control!

      I suppose one can argue that the taxes (i.e. UK APD) are out of control too and possibly the LHR £8.90 charge is also out of control – but these are the same regardless of ticket point of sale / origin, and the article only talks about YQ.

  • Heathrow Flyer says:

    Do AAdvantage members get hit with these large YQ amounts when booking redemptions onto BA transatlantic flights? Is it a level playing field?

    If they do, and bearing in mind there are no such YQ levies on AA transatlantic flights, why on earth would an AAdvantage member ever redeem onto a BA flight when there was a comparable AA one?

    • ChrisC says:

      I shall have a look into both of these issues later today so I can give you a proper answer rather than one based on an assumption.

    • Matt says:

      They wouldn’t unless there was no availability on AA – I believe their transatlantic flights are harder to find

This article is closed to new comments. Feel free to ask your question in the HfP forums.

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