Is the ‘use more Avios but just pay £1 of taxes’ pricing policy a mistake?

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• Andrew J says:

  8 Feb8 February 06:53

  Pre-Nectar, for people with lots of Avios it was a nice feeling to get an actually free flight with the £1 deal. The other advantage pre-BWC was that it meant your flight was fully cancellable for £1, rather than £35 – which was certainly worth something too (when I wanted to try the A350 to Madrid and it wasn’t overly certain which days it was flying I booked 4 flights and then cancelled 3 of them nearer the time). Things have changed now that you can get a FTV and burn your Avios at 0.8 at Sainsbury’s – so I wouldn’t do £1 flights now, but I did in 2019.

• John says:

  8 Feb8 February 06:57

  In the UK, many people (including some highly-educated professionals) do have the maths ability of a gnat, and even seem to be proud of it.

  • Rob says:

    8 Feb8 February 09:12

    To be fair, my wife can’t do my 10-year olds maths homework and she is the second most senior person for her bank in the UK 🙂

    • RussellH says:

      8 Feb8 February 09:40

      That is probably because your 10 year old is doing maths, while banking mainly requires arithmetic.
      Back in the days of O-grades, Scotland had separate exams for arithmetic and maths, acknowleging this.
      And for myself, I was never “top of the class” in primary, because I am not good at arithmetic, but I did do OK in maths in secondary, while one contempary who had been brilliant at arithmetic struggled with O-level maths.

    • TimM says:

      8 Feb8 February 10:56

      Agreed. Mathematics is such things as algebra, topology, geometry, differential calculus, number theory – all things once in O-level maths. Arithmetic was taught at junior school in spare time, like woodwork or handwriting.

• ChrisC says:

  8 Feb8 February 07:03

  Given the number of times people apparently can’t see the “more pricing options” link and click it there is obviously a vision issue as well as a can’t do maths issue with some readers!

  • Andrew J says:

    8 Feb8 February 07:23

    Yes it’s very bizarre that people do not take the time to look closely enough at the website and see that there is a link

    • Polly says:

      8 Feb8 February 15:59

      And that link is pretty clear to see….

• Scott says:

  8 Feb8 February 07:06

  At the end of the day, some people may well be Avios rich and cash poor, or just don’t want to spend the cash. If I’ve 1m Avios in my account, dropping 5000 extra isn’t going to be at all noticeable and a few £ less being spent could be a good thing.

  The value of Avios points are what you choose them to be. A £50m Picasso is worth nothing to me, but to others, they’ll pay obscene amounts for it.

  You’ve got people happily paying £3.5k for CW to JFK when it was less than half that a year or so ago. That’s really bad maths in my opinion as it’s just not worth it.

  • NigelthePensioner says:

    8 Feb8 February 07:13

    Absolutely agree with you, Scott. J class fares on BA are double what they were and the service is half what it was (more mathematics I’m afraid!) on pretty much every route that I have looked at. More fool the people who support this pricing. Perhaps if the population boycotted this price hijacking, things would change………but then “pigs may fly”! The planes are now full of “first time opportunists” in J who clearly have no idea what the price should be, let alone know what a tier point is or how the seat goes flat.

    • dougzz99 says:

      8 Feb8 February 07:22

      The planes are full is the part where BA stopped reading or caring. It costs what it costs, fly economy, use another airline or stay home. What’s the issue with first time in business flyers, there was a time when you didn’t know how the seat worked or what a tier point was. We all start somewhere.

  • dougzz99 says:

    8 Feb8 February 07:25

    But if you can get 0.8p in Sainsbury’s for an Avios, and Sainsbury’s sell lots of branded products so no reason not to use, anytime you get less you’re wasting the Avios, and contributing to your being cash poor.

    • Scott says:

      8 Feb8 February 07:40

      Suppose for most people, things such as Nectar points, Clubcard points etc. are just something you get when shopping and are taken little notice of.
      Yes there are those who scrutinise their spends, churn cards etc. to maximise earnings and find those sweet spots, but most people use them on whatever with no thought of potential value. Value is always subjective.

      • Jeff77 says:

        8 Feb8 February 11:16

        Yes. Most people would probably do other things than work out how much an avios point is worth etc and points are just a bonus rather than that important to them

  • Andrew J says:

    8 Feb8 February 07:28

    Well a £50m Picasso is also worth £50m to you as that’s its value – it’s an investment which you could leave in a vault and never look at if you aren’t a fan of the artist’s work. But I get your point and this website is the home of group-think where there’s a tunnel vision of what the correct use of Avios is and the beloved 2for1 voucher. Personally I like getting something for £1 and was happy to spend more Avios on flights and now I’m happy spending the Avios via nectar.

    • John says:

      8 Feb8 February 07:50

      It would be £50m minus the auction house fees, the cost of the vault, the cost of insurance and any taxes on selling, which means it might only be worth £25m to me.

      • Chrisasaurus says:

        8 Feb8 February 07:59

        Well then they saw you coming didn’t they

        • Andrew J says:

          8 Feb8 February 08:04

          Hahaha yes, £25m of taxes and fees seems excessive even on an article about BA taxes and fees.

    • yorkieflyer says:

      8 Feb8 February 16:13

      Perhaps an idea for an online Pound shop, where everything is £1 plus X Avios?

  • Londonsteve says:

    9 Feb9 February 10:32

    Why, out of interest, are the J cabins suddenly full of ‘first timers’ seeking to drop a fortune on a long haul flight? I thought all airlines are struggling for passengers at the moment and it’s a price led market. Why the completely different economics on long haul metal compared to tempting people onto LCCs to go for long weekends in Europe? Both involve leisure travellers undertaking discretionary travel in their free time. Granted, the Club World brigade have rather more disposable income but it was always like this. You would have thought it’s rather easier to tempt a few hundred people down to the Costa del Sol for a long weekend of sunny weather and fresh fish compared to 50 people a day to sit in J and pay £5k for a week in Caribbean.

    • Rob says:

      9 Feb9 February 11:02

      Multiple press stories in the last couple of weeks about sales of luxury long-haul holidays going off the scale. It seems a week in Alicante isn’t enough for people who have spent two years going nowhere and are sitting on thousands of pounds of unspent lockdown cash.

      There is also a supply issue – loads of flights are filled with people who moved bookings from 2020 and 2021 so there are not many fresh seats for sale, and BA is going to be short of long-haul aircraft for at least two years until the new 77X fleet arrives.

• Ted says:

  8 Feb8 February 07:11

  Here’s another problem: the gold reward flights have to be the £1 proving.
  I literally got off the phone last night to them, trying to book flights during ski season.

  18,000 Avios one way plus £1? No. I went indirect with Lufthansa for £80

• AndyS says:

  8 Feb8 February 07:12

  I think it’s all been said above but my view is why should you have to pay cash for taxes at all? Sticking with the nectar theme, if I choose to do my shopping and pay with my points, I don’t then have to get my wallet out for the VAT. The points cover that as well.

  • Andrew J says:

    8 Feb8 February 07:32

    Or at least just pay the actual taxes not a huge fuel surcharge too. The domestic US flights are great examples of paying the Avios and just a few quid taxes.

    • John says:

      8 Feb8 February 07:58

      The carrier surcharges (no longer “fuel” surcharges) are a way to stealthily devalue. BA should be happy to cover the taxes, which are known values, now since they must be actually paying or receiving close to 0.8p per avios to/from nectar

    • Cdog says:

      8 Feb8 February 10:47

      went to price a US domestic up the other day and it’s now changed from the £5.60 to £1 and the number of avios has dramatically increased, so seems they’ve applied the same con to US domestic now

• tony says:

  8 Feb8 February 07:41

  Just to agree with what seems to be the general sentiment that HfP is a bit detached from where the wider population is. I’ve tried a couple of times to explain to someone why they’d be better off cashing in their Avios for £ via nectar and not redeeming those miles to go long haul in economy, but they don’t get it.

  Psychologically they can convince themselves the flight is free if it’s come from another “route”. Without these low £-cost redemptions, BA lose a very soft target market.

  BA is simply catering to a very big market that it knows wants this outcome.

  • Ian McDowall says:

    8 Feb8 February 07:51

    I agree with you, but using avios with companion vouchers in business class is definitely a significantly better deal than simply spending on shopping.

    • Freddy says:

      8 Feb8 February 08:09

      True, if you can get availability to get somewhere you actually wanna go to

    • tony says:

      8 Feb8 February 08:20

      These same folk were using 2-4-1s to redeem for Y, and conveniently ignoring the £295 annual fee on the Amex card as well. But their logic was – as Andrew J says below – that it’s all about getting a holiday cheaper. Something i’ve seen of late is that people attempt to rationalise discretionary spending in the most abstract way to give an outcome that they feel comfortable with, rather than looking at cash comparatives. Over longer term horizons, their confidence in forecasting inflation (admittedly to offer a confirmation bias in return) is always impressive, too.

  • Andrew J says:

    8 Feb8 February 07:51

    I think there’s the idea that spending on groceries is necessary and therefore no licence is needed to do so. Whereas a long-haul flight is seen as an extravagance that needs to be justified – so if it can be significantly reduced by Avios then less justification is needed. Of course the maths don’t stack up and it makes no sense to do this, but I do think that’s how people approach this – getting your holiday cheaper seems to be something to aspire to.

    • SH says:

      8 Feb8 February 15:56

      Going to Spain this weekend and booked the flights outbound IB and inbound BA with Avios, plus (gasp!) a hotel with Avios. I know that theoretically better value can be had on some other redemption, but weighed this against the difficulty in going places we actually want to use them (Asia).

      Not everyone using Avios this way is a total mug, they may not always have the complete free choice over which currency to use. Given booking our February trip in January while paying for the extravagances of Christmas it was preferable to use Avios to cash. You may say ‘well if you had extracted maximum value from Avios by redeeming for Nectar over the year you’d have had more cash to use for your hotel stay’ but I think in the real world most families don’t operate off a spreadsheet

  • John says:

    8 Feb8 February 08:30

    I suppose nobody here uses cash much any more, but it reminds me of people who put all their coins in a jar every day and then get really surprised they have £500 when they take it to the bank every 2 years, and treat it as free money.

    Also this weekend saw an ad on TV encouraging people to send actual money to some Christmas saving thing where they get it back in December in the form of vouchers – at full price

    • ChrisC says:

      8 Feb8 February 08:42

      Well some banks are doing the modern equivalent of the coin jar and doing schemes where they round up a purchase and put that into a savings account.

• BJ says:

  8 Feb8 February 08:07

  Title needs correcting to…

  ‘No Deal is Better than a Bad Deal’

  • Polly says:

    8 Feb8 February 16:18

    Ha!

  • yorkieflyer says:

    8 Feb8 February 16:18

    Or “Stupid is as Stupid does” ?

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