Maximise your Avios, air miles and hotel points

Whoa …. British Airways to move to ‘Avios per £1 spent’ in 2023, Iberia to switch now

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Iberia Plus, the Avios-based loyalty scheme for British Airways’s sister airline Iberia, has announced a massive overhaul of its Avios earning structure.

The Avios you earn will no longer be based on the cabin you fly and the distance you travel

From November, the Avios you earn will be based exclusively on what you spend and your elite status.

Iberia has also announced that British Airways will move to the same model in 2023.

British Airways to change how you earn Avios

Full details can be found on this page of the Iberia website.

The British Airways announcement is in the official press release:

Ian Romanis, Head of Retail and Customer Relationship Management at British Airways, said: “We congratulate our colleagues at Iberia for introducing this change and we look forward to joining them in 2023. More announcements will follow about what this change will mean for our Executive Club programme, which will unlock even more opportunities for our Members to earn Avios when they fly.”

I challenge anyone to give an example of how these changes ‘will unlock even more opportunities for our Members to earn Avios when they fly’. When you have to resort to peddling claims like this, which literally don’t make any sense, you know you’ve lost the argument.

We’re getting ahead of ourselves, however.

What is changing with Iberia Plus?

It is, at least, simple. The number of Avios you earn per Euro is based on your status in the Iberia Plus programme.

A base level member earns 5 Avios per €1, whilst an elite member will earn up to 8 Avios per €1.

Take a look here:

Importantly, the fare calculation used to calculate Avios is based on “your net spending, not including taxes or carrier charges.”

Or is it?

When Iberia’s website went live earlier today, it did indeed feature the wording above.

This has now changed. It now says “your net spending, not including taxes or fees”.

If carrier charges are not included, you would only earn 10-16 Avios on a return Economy flight to New York if BA adopted the same earning rates. This is how a typical ticket looks:

Base fare £2.00
Additional Charges (Adult) £397.96, of which:
Air Passenger Duty – United Kingdom £84.00
Passenger Service Charge – United Kingdom £56.06
Passenger Civil Aviation Security Service Fee – USA £4.80
International Transportation Tax – USA £17.00
International Transportation Tax – USA £17.00
Animal & Plant Health User Fee (Aphis) – USA £3.40
Immigration User Fee – USA £6.00
Customs User Fee – USA £5.60
Passenger Facility Charge – £3.90
Carrier imposed charge – £200.00 booking fee – £0.00
Total £399.76

Based on the original Iberia rules published online (Avios on base fare only, nothing awarded on carrier charges or taxes), and assuming that British Airways goes with a similar 5-8 Avios per £1 spent, you would earn between 10 and 16 Avios for flying on this ticket.

If carrier charges ARE included, you have a base fare of £202. This means you would earn between 1,010 and 1,616 Avios for a return flight.

Elite bonuses have been quietly cut

Whilst it isn’t immediately obvious from the numbers in the image above, Iberia has cut its elite tier bonuses.

At present, you get a bonus of 25%, 50% or 100% of Avios earned based on your elite status.

If you do the maths on the numbers above, working from a base level of 5 Avios per €1, elite status bonuses have been cut to 20%, 40% and 60%.

British Airways to change how you earn Avios

Is this model of awarding miles a good one?

This model of earning Avios has been used by other airlines and is generally agreed to be a dud. The only exceptions are Finance Directors, who can easily understand how the cost of miles is linked to the money coming in and so like the idea.

Those who think more carefully about these things usually don’t agree. This is because you are rewarding the wrong people most highly.

The people who are flying on £10,000 fully flexible business class fares to New York are the ones who are laughing all the way to the mileage bank. However, with few exceptions, these are corporate travellers whose choice of airline is made by their employer. You could give these people zero miles and it wouldn’t impact the money that their employer spends with the airline.

Similarly, it is (duh) the fullest flights which charge the highest prices. Because these flights are ALREADY full, it makes no sense to spend most of your loyalty budget rewarding the people who fly on them. Those seats would sell anyway, multiple times over.

On similar logic, fares are higher on routes where there is no competition – but on routes where there IS competition, and where fares are lower, the lure of Avios is more important. Weirdly, you will now be rewarded more for flying expensive routes where only British Airways could have got you there. You will earn fewer Avios on competitive routes where you can choose between carriers.

It should all be about the marginal Euro (or Pound)

The secret for an airline is to attract marginal spending. This means:

  • attracting the leisure Euro, from self funding passengers who often won’t have status (and so, in this structure, earn just 5 Avios per £1)
  • attracting small business travellers and the self-employed, who do an important job of filling your aircraft at off-peak times, but who are now given less incentive to do so

The bottom line is that you don’t make money by getting more people to travel on full flights, because this isn’t possible. You make more money by filling seats on cheaper, off-peak flights which would otherwise be empty, and this is where your loyalty budget should be focussed.

This model quietly ignores huge corporate rebates

There is one other factor which is generally ignored when thinking about the link between Avios and money spent.

I would be surprised if Iberia has any big corporate contracts where there is not a massive rebate paid at the end of the year. These are generally along the lines of ‘if you spend £2,500,000 with us during this calendar year, we will pay you £500,000 back at the year end’.

What this means is that the traveller on a notional £10,000 ticket, and being ‘over rewarded’ with 8 Avios per £1, isn’t even spending £10,000. A large chunk of that money is coming back to their employer at the end of the year.

An SME traveller choosing to spend £8,000 – with no corporate contract to rebate 20% of the fare – is spending the same net amount but earning fewer Avios. This is also the traveller who is likely to have a choice about which airline to fly with.

So …. the bottom line tends to be that this model of mileage earning:

  • over-rewards corporate travellers who have no choice over which airline to fly and whose published ticket cost is highly inflated due to rebates, whilst
  • under-rewarding small business travellers and leisure travellers, who have 100% control over which airline they use and who pay the full sticker price
Avios earning changes

Other key points about the Avios changes

The way you earn status is not changing

For clarity, there is no change to how you earn status with Iberia. There will be no linkage, at all, with spending.

The existing system of Elite Points remains.

We can guess that British Airways will also retain the existing tier point system.

It is likely that Avios earning with partners will not change

Due to IT complexity, it is highly likely that flights from airline partners will continue to earn Avios based on a combination of cabin class and distance flown (eg 125% of miles flown for discounted business class). This is because partner airlines do not receive fare data from the operating carrier.

However, British Airways will be moving to ‘Avios per £1 spent’ earning on transatlantic flights on American Airlines, Finnair, Iberia and Aer Lingus. This is possible because it does see the underlying fare data on these flights due to the joint venture in place. Other flights operated by these carriers will continue to earn Avios based on the standard charts.

Of course, if you don’t like the British Airways changes in 2023, you could credit your flight to Qatar Privilege Club (assuming you don’t need the tier points) or even a non-Avios programme.

And, of course, ‘earning from flying’ is not that important these days

The writing was on the wall for earning Avios from flying when British Airways reduced its minimum earning rate from 500 Avios to 125 Avios per flight.

For a number of years now it was likely that, if flying discounted economy, you would earn more miles from your credit card spend when you buy the ticket than you earn from actually flying it. Nothing announced today will change that.

You can find out more about the Iberia changes on its website here. We will no doubt be returning to this topic in the future.

How to earn Avios from UK credit cards

How to earn Avios from UK credit cards (June 2024)

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 with a bonus of up to 25,000 Avios. You can apply here.

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

Get 25,000 Avios for signing up and an upgrade voucher at £10,000 Read our full review

Barclaycard Avios card

Barclaycard Avios Mastercard

5,000 Avios for signing up and an upgrade voucher at £20,000 Read our full review

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

British Airways American Express Premium Plus

25,000 Avios and the famous annual 2-4-1 voucher Read our full review

British Airways American Express

5,000 Avios for signing up and an Economy 2-4-1 voucher for spending £15,000 Read our full review

You can also get generous sign-up bonuses by applying for American Express cards which earn Membership Rewards points. These points convert at 1:1 into Avios.

American Express Preferred Rewards Gold

Your best beginner’s card – 30,000 points (TO 16TH JULY), FREE for a year & four airport ….. Read our full review

The Platinum Card from American Express

40,000 bonus points and a huge range of valuable 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 10,500 Avios.

Capital on Tap Business Rewards Visa

10,000 points bonus – plus an extra 500 points for our readers 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.

American Express Business Platinum

40,000 points sign-up bonus and an annual £200 Amex Travel credit 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.

Comments (288)

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

  • Tony says:

    Makes lower fares on EasyJet and Ryanair look very attractive now!

    • babyg says:

      were you really flying BA because of the airmiles you got? Ive always seen them as a bonus, and not something that i factor in (i do factor in TierPoints)

  • AJA says:

    The biggest issue for me as a purely self funded silver member (haven’t done work related travel for the last 10 years so dont get my Avios or status for free) is that I hope to be able to maintain that status level which is only achievable from actually flying. As long as the tier points remain the same then I will end up accepting a lower return of Avios from the flights I take but this feels like a kick in the teeth.

    The downside is that I find it increasingly unpalatable to pay the £1k in taxes fees and other charges to spend my Avios on longhaul flights when I can spend not a lot more in cash on a WTP fare and upgrade using Avios. Which has the side benefit of earning me more TP to maintain status and a slug of Avios back which will now not be nearly as lucrative.

    The trouble is that earning the Avios is increasingly relying on credit card spend which now explains the crazy 100k SUB on the Barclaycard Avios. This of course increases the appeal of churning cards, something I am not keen on doing (my problem I know) but is increasingly difficult to do anyway since the Amex 2 year rule but also increasingly difficult to get approved with a decent credit limit due to the tightening of credit available from a worsening economy.

    But it at the same time destroys the case for holding the Amex BAPP since (a) finding a worthwhile use of the voucher is becoming far more difficult and (b) the increased annual fee is making it even more difficult and (c) I will now earn far less Avios which means I have fewer Avios to spend in the first place.

    I now am beginning to see the value in the Avios subscription model announced recently as that earns you something like 200k Avios for £1800. But I still fund it odd to subsidise BA in order to get Avios to spend on “reward” flights, that’s no reward for my loyalty to my mind.

    • AJA says:

      It’s also loyalty in name only too. I think this just kills the whole loyalty programme since there is very little reward in being loyal.

  • Steve says:

    These changes if fully adopted by BA are massive and will really devalue the programme – BA should really think twice.

    Rob, you comment : “This model of earning Avios has been used by other airlines and is generally agreed to be a dud. The only exceptions are Finance Directors, who can easily understand how the cost of miles is linked to the money coming in and so like the idea.”

    I’m an FD and believe me, I don’t like it either – because of this quote: “The people who are flying on £10,000 fully flexible business class fares to New York are the ones who are laughing all the way to the mileage bank.” Now FD’s will have to police how much they’re spending and watch out for employees and managers who will become motivated not by what class they fly but how much the fare is – go figure (literally!)

    • KevinS says:

      FDs should already have automatic checks in place to stop people taking the Michael. I have in previous jobs. Not really in my current one though as they’re a bit of a shambles when it comes to managing costs.

      • Steve says:

        FD’s generally will have checks in place, but large corporates typically have travel policies and many outsource to travel specialists – issue is that if the travellers’ motivation is to earn AVIOS (to spend on the annual family summer holiday!) then travel & meeting schedules can be manipulated/changed to meet the AVIOS requirement!

  • Mikeact says:

    “We think this is a more fair and transparent way to reward our more loyal members, with a model that they have been requesting for some time”

    It wasn’t me.

  • NigelthePensionerr says:

    “which will unlock even more opportunities for our Members to earn Avios when they fly.”
    Explain how??? It will neither increase opportunity nor quantity earned, unless BA intend a J seat to be £10k fixed. How do IAG do it….again and again and again……. 🤣🤣🤣🤣

  • BJ says:

    Knew I’d miss something big on my 22h journey yesterday 🙂

    “I challenge anyone to give an example of how these changes ‘will unlock even more opportunities for our Members to earn Avios when they fly’”

    Nit picking, but pssibly agency and industry discount fares which don’t currently earn avios?

    I wonder how long before the mamoth in the room is set free!

  • Paul McC says:

    Am I the only one who sees this as a much needed motivation to move away from BA. I fly Club Europe a lot and (like a lot of people I imagine), I justify the extra cost to fly Business Class on BA over say Ryanair economy by convincing myself the Avios are valuable and the tier points help me retain status that is worth it for the lounge access at LHR. Honestly, I genuinely thank BA for this. The reality is that a good loyalty scheme will allow the customer to willingly fool themselves so they can make bad choices. So, if I look at 2024 (allowing 2023 for status to expire, so BA Y all the way booked well in advance and any crazy pricing won’t be tolerated) I definitely will fly Ryanair or other carriers depending on location and I’ll fly cheapest seat possible, random seat allocation with zero bags. In addition, BA through their utter incompetent handling of the LHR fiasco have shown they are no more reliable than the budget carriers and when things go wrong there is jo compensation, even when there clearly should be. BA forget that some of their higher tier members fly other carriers for various reasons and we have all been through compensation situations before with other carriers. I found BA to be a total nightmare when dealing with a clear cut compensation claim (not just a simple LHR staffing issue but more BA specific fiasco). This news has made me happy and will help my wallet no end.

    • Paul McC says:

      That is so true. I was looking at travel in Asia and if you get yourself to any major city the business and first class deals from there are unreal value and without wanting to bash BA, the product is vastly superior. No reason why my Asia trips shouldn’t originate in Asia. I just need one positioning flight to get me into place – a fitting use for my remaining Avios! While flights out of some Asian airports are wildly elevated at present such as BKK, they have traditionally offered some amazing deals. Not for everyone but unless I have misread the news for last decade, people in their mid forties onwards are the ones with the time, money and experience to dump BA.

    • Bagoly says:

      “The reality is that a good loyalty scheme will allow the customer to willingly fool themselves so they can make bad choices.”
      That is brilliantly perceptive.
      Rob gives us all the rational elements, but you are right that there is some irrational aspect as well.
      The problem (from the point of view of shareholders) is that too many executives believe in managing only costs rather than profit, which includes income.

  • babyg says:

    This article has had quite the reaction.. I’m surprised that HfP people are really that concerned (yes it could be the tip of devaluation iceberg etc) . The majority of my BA flights are by SPENDING Avios, i hardly earn any Avios flying BA (and Im currently Gold).. and when i do its a bonus and something i rarely factor in. I struggle to see why this change moves the needle so much on peoples AVIOS balance sheets…

    • Rob says:

      Tempted to agree – it will make minimal difference to me, although my family has racked up around 100,000 Avios this year from premium cabin redemptions accidentally posting as cash tickets 🙂

      Disappointed to get nothing for my BA flight on Saturday!

      I am not normal though in the context of BA’s customer base. I do have a £10k New York flight tomorrow but I asked to be booked on Virgin for some variety.

      • Karen says:

        Please report back on your Virgin flight. Looking at Business LHR-LAX. Driven to increase my miles (United but most expensive) but contemplating cheaper business tickets on Delta/Virgin or even BA. Have not been on a plane for 3 years.

    • AJA says:

      @babyg I note that you tend not to pay BA (except taxes, fees and other charges on redemptions), preferring to use your Avios to spend on their flights. That suggests that you earn a lot more Avios elsewhere. I guess you also manage to maintain Gold status by earning TP flying on other OW carriers and do the 4 minimum BA flights the cheapest way possible? That suggests you do a fair bit of long haul flying in premium cabins.

      I am glad that works for you but the proposed changes by BA doesn’t help many others for whom flying a lot of long-haul flights a year is a rarity. I tend to do one long-haul flight a year which helped rack up the Avios and had until now done a second using my 2-4-1. I used to choose BA as I was being rewarded for flying with them.

      But now with the change to revenue earning for flying and the cost of the surcharges for using the 2-4-1 long haul I will change my focus to spending Avios and 2-4-1s on European flights as I can spread my stash of Avios over more flights since it will be more difficult for me to earn Avios to spend. And if I lose status then I guess I can always concentrate on giving my cash to any other airline rather than BA.

      Not sure how BA thinks that means I am showing them loyalty? And it’s only fair since they aren’t rewarding me for mine. That really isn’t how a loyalty scheme is supposed to work is it?

    • TGLoyalty says:

      Death by 1000 cuts as they say

      First it’ll be earning deval then it’ll be a spending deval followed by a benefits deval etc etc

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