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Hello all,
I have a query and want to check my understanding. It is often said on HFP or in these forums that generally speaking, redeeming Avios for long haul economy is not “good value” and that most articles assume that many people here are booking Business or better class bookings.
For context. I’m a long term avios collector and have had the BAPP card for 10 years and have always managed to use every voucher earned. I have a fairly healthy balance of ~400k, earn a 6-figure salary (so have the income to book frequent and expensive travel if I wanted to), and generally holiday abroad 3-4 times a year. I have travelled extensively for work, travelling business class so am very familiar with the benefits of that (I’m flying to London-Jakarta with Qatar in a few weeks via DOH so will easily re-earn my Silver status). However, I would never pay for business out of my own pocket. I like the lounge bit, but can get that with silver/gold card.
All that being said, I’ve always felt I’ve got good value on my avios economy redemptions. So my question is, am I an atypical avios traveller/HFP reader or am I missing something? For example:
1. Using a companion voucher, flying LON-JFK economy offpeak would cost 26,000 avios and £493.72 in taxes (18/03/23-04/04/23). Equivalent cash BA fare is £928 (including 1 checked bag each) which works out as 1.67pence/avios. Not a dreadful rate, but not amazing granted. That drops to 1.37 if you fly another airline. Of course, flying business on the same flight is 100,000 avios and £1,693. Cash equivalent is £4,225, so works out as 2.53pence/avios. Even flying the cheapest airline works out as 2.03pence/avios.
So I get the maths, that it’s better value on a pence/avios term to fly Business than economy. Thing is, I’m not that interested in the “popular routes” such as NYC, LAX, Dubai, etc. Typically I fly to more of BA’s unusual/less popular routes. Previous ones include Accra, Buenos Aires, Baku (when they still did that). So next example:
2. Using a companion voucher, flying LON-EZE (Buenos Aires) economy offpeak would cost 45,500 avios and £823.34 in taxes (05/05/23-19/05/23). Equivalent cash BA fare is £1907 (including 1 checked bag each) which works out as 2.38pence/avios. BA is the only airline that does a direct flight, so there is no direct alternative. Flying business on the same flight is 175,000 avios and £1,619. Cash equivalent is £8,759, so works out as 4.08pence/avios.
So once again, I get that 4.08p/av is very good “value”, but since I would never, ever pay £8,759 for flights, but would pay £1,907 for economy, 2.38p/av seems pretty good economy redemption to me. As far as I’m concerned, anything over 2p/av is pretty decent.
So, am I missing something or is my perception of value different because a) I won’t book business class despite being financially able to and b) I typically fly to routes with very little competition, so the prices tend to be higher (because they can), and therefore you get better redemption rates.
Thanks.
It’s personal and you have to bear in mind that this is something which has been historically ingrained in the community. 8+ years ago, maybe even before that, when surcharges were lower, redemptions cost less in Avios and so on. Times have changed.
For me there is still good value booking premium cabins by starting your trip outside UK, especially with the new style 241 voucher. I’m also fine with indirect routes via Madrid for South America and unusual routes, forgetting about 241.
I think you’ve answered your own question and have accurately identified that you’re getting VFM booking long haul economy (albeit each price you quote involves using a companion voucher, which not all of us benefit from). As ever, it’s only a real saving if you would be willing to book the same seat for cash, otherwise you’re paying in excess of your self-imposed budget, albeit some of it is in Avios. The fact of the matter is that a great many collectors aspire to the champagne lifestyle but get a kick out of doing this on a lemonade budget. They would never consider paying £4200 or £8700 for business fares simply because they couldn’t afford to; collecting FF miles is their only realistic opportunity to turn left on boarding. For them, it’s a rare treat, the culmination of having accumulated sufficient numbers of miles AND having managed to book an often elusive flight to a desirable destination.
In your case, by your own admission you could pay business fares if had to and you’ve experienced life on that side of the fence, but you’ve got it out of your system and find the value proposition in an economy flight perfectly adequate, even if it doesn’t return the pence per Avios that other people get. I would keep merrily ploughing your own furrow and ignoring the naysayers who point out that you could do much better if only you were willing to fly J (and put in great effort to book it). Bill Gates flew in Economy until one day he woke up and realised he was worth $36 billion, after which it no longer made sense to compromise his comfort and impede his productivity by sitting in the cheap seats.
Yes, this is why I was asking. I wondered if the “Long haul economy redemptions are poor value” had become dogma. I was re-reading Rob’s article from the beginning of the year:
https://www.headforpoints.com/2022/01/04/what-is-an-avios-point-worth-6/
with the following quote:
“What about long-haul economy redemptions?
You will notice that none of these people flies British Airways long-haul economy. This is generally a poor use of Avios points because of BA’s taxes and charges.However, the guaranteed availability of eight Avios seats per flight at peak periods may lead to times when economy redemptions do offer value.
As an example, an off-peak redemption to San Francisco in World Traveller / Economy is 32,500 Avios plus £350. Any cash price of over £600 would see you getting 0.75p+ per Avios of value, although this would be rare at off-peak periods. You also need to be getting over 0.8p per Avios before an Economy flight redemption was better value than turning your Avios into Nectar points.”
It’s just something I hadn’t experienced, yet everyone keeps saying it was poor value, and so just wondered if I was failing to understand something, or was I somehow not a typical HFP reader. Or if there is a small number of HFP readers who are getting good long haul economy redemptions quietly in the background.
Completely agree it’s personal and some people value flying in premium cabins, staying in expensive hotels, etc. I do a lot of that for work, but would never pay for that myself.
Also agree also about starting trips outside the UK. Prior to having a kid I did that a lot, but I now place “CONSIDERABLE” value on having a direct flight get me to a destination asap. I did my honeymoon in Patagonia routing via Madrid, and as you say, I managed to get a great value redemption on avios, something north of 2.5p/av in economy.
Thanks LondonSteve,
Yes, agree I don’t factor in the cost of the credit card. I think most years I’ve usually covered the cost of the card via cashback/discounts on Amex offers so generally treat it as “free”. This year I bought a second hand car on Cazoo and so got £200 discount which was most of the annual fee. Year before bought a laptop on dell and got £300 off.
Yes, fully understand the aspiration side, and certainly don’t begrudge anyone the desire to turn left. Just wondered if as a community we’re not being nuanced enough for new members when we make blanket statements like “long distance economy redemptions are not good value”.
Yes, perhaps I did get it out of my system, although not sure I could afford £8700 tickets even if I wanted to. I suspect the reason I don’t value business is that I am incapable of sleeping on planes, so I might as well sit upright.
And let’s face it – BA business class is hardly anything to get excited about or aspire to.
And let’s face it – BA business class is hardly anything to get excited about or aspire to.
While I completely take that point, the fact is that Business/First travel IS aspirational to many who haven’t experienced it but often without any real objective foundation backing that up. While I could probably occasionally stretch my finances to purchasing the odd cash premium flight I see no value in doing so and, to be honest, am becoming increasingly reluctant to pay the surcharges on award flights (even when they are available) just to spend a few hours in a more comfortable seat.
I have lifetime status with both BA and AA so have no need to amass miles or points and have permanent guaranteed baggage privileges, free seat selection and lounge access so purchasing/redeeming Economy fares to places I want to go to when I want to go there makes increasing sense for me.
While I completely take that point, the fact is that Business/First travel IS aspirational to many who haven’t experienced it
Imagine the disappointment on their faces when the crew serve up the Club World meal.
Yes, this is why I was asking. I wondered if the “Long haul economy redemptions are poor value” had become dogma. I was re-reading Rob’s article from the beginning of the year:
https://www.headforpoints.com/2022/01/04/what-is-an-avios-point-worth-6/
Also agree also about starting trips outside the UK. Prior to having a kid I did that a lot, but I now place “CONSIDERABLE” value on having a direct flight get me to a destination asap. I did my honeymoon in Patagonia routing via Madrid, and as you say, I managed to get a great value redemption on avios, something north of 2.5p/av in economy.
Direct routing is an important point and where LCCs win. I’ve got a choice of coming directly home from Zurich or Basel. Travel time is the same to each airport from my point of origin. I can go Swiss from Zurich at £280 or burn valuable United miles. Or I can choose EZY from Basel for £17. Yes 17 quid.
When I can fly out to Vienna and home from Basel for a grand total of £38, the business class seat/lounge/collecting points etc just falls by the wayside. I can pay for an additional ‘up front’ seat and priority boarding for a few quid more, pay my way into a lounge and still be a fraction of the price.
Ultimately I think we get too hung up on this game sometimes. However I’ve been happy to route via Madrid and Lisbon for cheap cash biz tickets to the USA and South America but never felt the need to do it for a redemption
Oddly being only Bronze with BA , I value more redeeming CE for £50 + Avios or less. I value not having to queue in regular lines, fast track, free middle seat, lounge options in T3 and some food on board when it’s good. I’ve also bought CE cash tickets as they have been going down considerably in the past few years, especially if you buy them in the sale.
I never found low-cost propositions in Economy suit my needs. I always check-in a bag unless going away for 1 night and that’s rare. By the time you add all extras it always comes to about the same as regular economy.
I think you’ve answered your own question. It works for you. The maths works because you’re flying a relatively unusual set of destinations. Thee aren’t a lot of routes, no matter how long, where economy tickets are £2k – they tend to be very niche situations (let’s face it, you can fly all the way to New Zealand for half of that!) so for general rules for 99% of travellers, the conventional dogma does hold true. The fact that even on your routes you could get even better “value” from Avios in Biz also suggests this – albeit you are wise enough not to pay extra for things you don’t care about.
Everyone should work out their own needs and not pay for things that don’t actually matter. I’m tall enough that economy is a crush, but premiumE vs Biz on a daytime flight to East Coast USA – I honestly don’t care as let’s face it; aeroplane food in every cabin is reheated rubbish (by any decent groundside standard) and I will be quite comfortable sitting and reading in either cabin, so I am not paying a significant price difference to upgrade. Coming back overnight: different ballgame. I too put a high value on direct routing. x100000 if travelling with children.
Re: reheated rubbish. Depends on which airline you fly with. JAL has their F food delivered by Roketsu specifically for the evening LHR- HND flight, so it’s incredibly fresh and beats any other airline, including all of ME airlines.
I think what’s missing from the value analysis is that you’ve made the calculation as flattering as possible. You’ve gone for off-peak pricing, used a companion voucher (which was not free to earn on BAPP) and you’ve ascribed no value to the Avios (or TP) that you would have earned from the cash fare. Assuming a floor value of 0.8p due to the Nectar partnership, the NYC example close to that if you don’t use a companion voucher, and below if you’d fly another airline or want to go peak. The EZE example would too if you went during peak time and didn’t have a voucher.
Of course sometimes off-peak dates will work out for you and sometimes you may have a voucher lying around that you need to burn, but you can see that you don’t have to change your assumptions too much for it to be better value to take the Nectar option (or partial PPWA) and pay cash for the flights.
You’re right I’ve made it off-peak. Certainly pre kids I was always did this, now less so. Yes I included the companion voucher, bit I was attempting to mirror Rob’s original article from January where he spelt out the value of avios and several of his calculations used the companion voucher. Again, You’re correct that I’ve not accounted for the annual fee. However, as stated above if I take my lifetime savings from Amex offers it covers all my years of having owned the card. Between shop small, various promotions, etc the card has been paid for.
Don’t get me wrong I’m not saying long haul economy is always good value. It obviously isn’t and you should always do the maths and without a Companion voucher it can often be more difficult. I’m just observing on certain routes, perhaps the less popular destination, you can get good value. Even peak Buenos Aires with a companion voucher would still be well north of any nectar redemption.
On the subject of “what it’s worth to you”, we’ve just had a family meeting on returning
BKK-LHR in economy or premium (daytime flight, so big difference personally). Decided the
GBP 1K++ saving would pay for a stay in a club room at the Sheraton Grande, so worth it in our case!I’ve mentioned before that long-haul economy Avios often make good sense. However, they are in circumstances which the leisure traveller may never find themselves in (short notice travel, flexible requirements, one way travel, etc). Most leisure travellers buy three to six months in advance, inflexible discounted tickets, return or open jaw — this is the often when Avios make least sense. The same is true of Business seats, however, the value proposition of Avios is better as the multiplier of cash from economy to business is typically higher than the multiplier for points.
BA could really do with something like the Iberia cut-price inflexible Avios economy ticket. Or more long-haul RFS.
I agree Michael, just booked our return next August from EWR in economy on the 8am departure having found the day flight from BOS in April infinitely less painful than flying overnight, even in a premium cabin! The £50pp RFS fee was nice as well.
*It’s the return of a 241 booking (out in F to BOS so we are getting value from the voucher), so it works out at 15k avios plus £50 each for NYC-LHR-MAN at peak time. On balance I’ve decided I’d rather go indirect on day flights than overnight direct with the lack of sleep it entails!
I think going forwards this will really depend on what happens to fares. You quote an economy fare to NYC of £900 – that is not a usual fare and can often be beaten.
Going back to Robs example – I have just priced up a trip to SFO in June next year. £452 cash fare in economy versus 32500 avios and £350 “fees”. That would be a bad use of avios.
Yup, I picked dates at random about 7 to 8 months out. I wanted the same dates (NYC vs EZE) but couldn’t find any quickly that had availability in all cabins, so had to pick the dates I did. But yes, you’re right, you can do better than £900 but that proves my point, that on “popular” routes Long haul redemption are probably not worth it. I’d argue the SFO is a “popular” route.
I just picked some random peak and offpeak dates to fly to Bermuda using and not using the companion voucher. Again, probably not a popular destination (which frankly surprises me as it’s a beautiful little place). Tickets are two people (with 1 x bag each on cash fare)
Best case Offpeak with Companion voucher 5.8 p/av
Best Case Offpeak just avios 2.9 p/avBest case Peak with Companion voucher 3.2 p/av
Best case Peak with just avios 1.6 p/avAll of those are pretty decent, Even on the peak with just avios at the most unflattering ratio of miles to £ I can still get 1.1 p/av, so still better than nectar.
So I’m content I’m not missing anything other than I’m obviously just not flying to popular destinations. That suits me fine.
Hardly any chain hotels in Bermuda so not many points options (I think there’s a new St Regis and that’s just about it atm!) And fiendishly expensive – my in laws were over visiting family last month and said fish and chips in a pub is now £25pp!
Grotto Bay Beach hotel is lovely. Fantastic cave spa. Went there when my wife was pregnant and Zika virus was ravaging the Caribbean. They have a very active anti-mosquito programme. Whole island was basically fully of pregnant women on babymoons.
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