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Forums Frequent flyer programs British Airways Executive Club Nectar conversion rate changing

  • WillPS 194 posts

    Just received this:

    We wanted to let you know that from 11 March 2024, the conversion rate for Avios to Nectar points will be changing.

    When converting Avios to Nectar points, the current conversion rate is 300 Avios = 400 Nectar points. From 11 March 2024 that will be changing to 400 Avios = 400 Nectar points. The Nectar to Avios conversion rate will remain the same.

    This change will take place automatically and your British Airways Executive Club and Nectar accounts will continue to be linked so you don’t need to do anything.

    Means the free Barclaycard now only has an effective rate of 0.5% when redeeming that way.

    Londonsteve 194 posts

    It was only a matter of time, bringing Nectar into line with other bottom of the barrel redemption options, like using Avios to pay for hotels or car hire. They clearly want us to redeem Nectar for Avios and not the other way round.

    I wonder what the outflow of Avios to Nectar was back when it could be exchanged in either direction at the same rate? Must have been huge. I swapped 50,000 Avios that way and used them to buy petrol at Sainsbury’s.

    WillPS 194 posts

    To be honest I thought the whole thing was more likely to be scrapped than anything else. Ironically, they’ve still not nerfed it to the point of being completely useless – 0.5% pseudo-cashback on a fee free Mastercard credit card is still market leading.

    It’s all the encouragement I need to put the Barclaycard in to reserve and apply for the Santander Edge card tho.

    Harrier25 846 posts

    Rob will need to amend his Amex MR article now from the weekend.

    WillPS 194 posts

    Rob will need to amend his Amex MR article now from the weekend.

    True. No benefit to doing MR -> Avios -> Nectar over just MR -> Nectar now.

    Also makes the Nectar credit card (strangely absent from that piece!) seem even more of a great deal.

    kitten 5 posts

    I’ve lost track.

    How much has the original Avios to Nectar conversion rate been reduced by now in total?

    WillPS 194 posts

    I’ve lost track.

    How much has the original Avios to Nectar conversion rate been reduced by now in total?

    The launch deal was 250 Avios == 400 Nectar points (either way), or 1 Avios = 0.8p worth of Nectar

    Then in Nov 22 they devalued to 300 Avios = 400 Nectar, or 1 Avios = 0.66p worth of Nectar

    Now it’s going to be 400 Avios = 400 Nectar, 1 Avios = 0.5p worth of Nectar.

    jj 526 posts

    Given current flight pricing and the helpful way reward flight saver redemptions interact with the Amex voucher, surely you’d be mad to swap out to Nectar anyway? Most ofy recent redemptions have been for way more than 1p per Avios.

    WillPS 194 posts

    Given current flight pricing and the helpful way reward flight saver redemptions interact with the Amex voucher, surely you’d be mad to swap out to Nectar anyway? Most ofy recent redemptions have been for way more than 1p per Avios.

    I don’t fly.

    Curious tho – is that 1p+ value compared to the cash price for the same flight/class of seat, or 1p+ compared to the ticket you would actually have purchased in cash if you had to (in any class and with any airline)?

    jj 526 posts

    Given current flight pricing and the helpful way reward flight saver redemptions interact with the Amex voucher, surely you’d be mad to swap out to Nectar anyway? Most ofy recent redemptions have been for way more than 1p per Avios.

    I don’t fly.

    Curious tho – is that 1p+ value compared to the cash price for the same flight/class of seat, or 1p+ compared to the ticket you would actually have purchased in cash if you had to (in any class and with any airline)?

    It’s based on what I would have paid. On Friday I booked a redemption that offered 2.7p per Avios based on the revenue fare – and that was at the cheapest time of the year.

    WillPS 194 posts

    Given current flight pricing and the helpful way reward flight saver redemptions interact with the Amex voucher, surely you’d be mad to swap out to Nectar anyway? Most ofy recent redemptions have been for way more than 1p per Avios.

    I don’t fly.

    Curious tho – is that 1p+ value compared to the cash price for the same flight/class of seat, or 1p+ compared to the ticket you would actually have purchased in cash if you had to (in any class and with any airline)?

    It’s based on what I would have paid. On Friday I booked a redemption that offered 2.7p per Avios based on the revenue fare – and that was at the cheapest time of the year.

    And you would pay for cash fares with BA even if you had 0 Avios?

    Rob
    HfP Staff
    2,229 posts

    You’re implying that people would take a Wizz Air at 5am from Luton with no reserved seat and squeeze into HBO if they couldn’t get an Avios BA flight at 10am with seat and baggage included plus a sensible terminal experience. That’s not true for most.

    WillPS 194 posts

    You’re implying that people would take a Wizz Air at 5am from Luton with no reserved seat and squeeze into HBO if they couldn’t get an Avios BA flight at 10am with seat and baggage included plus a sensible terminal experience. That’s not true for most.

    I’m not implying anything at all, I’m asking 🙂 if you wouldn’t fly at 5am on a Wizz Air from Luton then it’s not a valid base for comparison.

    However, unless BA is the only choice you would consider, then the cash price for the fare you take shouldn’t be the base either, as you’re not ‘starting from 0’ when counting.

    I’m not a flyer, so I don’t know, but I think ‘for most’ there is a pretty large market between 5am Wizz Airs and BA at the top end. Some would only consider that top end, and in that case fair enough, but ‘for most’ I suspect they are not using the cash fare they would actually pay as the basis for their calculation.

    By contrast when I redeem those Avios at 0.66p or 0.5p value, I know I am getting *exactly* that value because there is no cheaper diesel which is available to me than the stuff I buy at Sainsburys.

    I appreciate that for many miles collectors that’s not what it’s about, and it’s instead about specifically getting something they definitely wouldn’t enjoy if they had to pay cash for – and again, fair enough – but it’s important to acknowledge that there’s a difference in those valuations; one is genuine money saving and the other isn’t.

    Indeed, once you factor in taxes etc AIUI paradoxically it’s possible for a 2 or 3p Avios redemption to actually cost money compared to the open market cash fare you’d choose if you were paying…

    jj 526 posts

    @WillPS, as I said, I wouldn’t have paid cash at the current BA price; I’d have stayed home. But I have previously paid enough for a similar journey to value the Avios at about 1.8p, and at that price I would again pay cash if I had no Avios. That’s why I said that I get much more than 1p per Avios on a typical redemption.

    WillPS 194 posts

    @WillPS, as I said, I wouldn’t have paid cash at the current BA price; I’d have stayed home. But I have previously paid enough for a similar journey to value the Avios at about 1.8p, and at that price I would again pay cash if I had no Avios. That’s why I said that I get much more than 1p per Avios on a typical redemption.

    Fair enough, appreciate the deets 🙂

    Promise I’m not casting aspersions; if flying was an option for us I know I would be all over it.

    Bill_B 87 posts

    You’re implying that people would take a Wizz Air at 5am from Luton with no reserved seat and squeeze into HBO if they couldn’t get an Avios BA flight at 10am with seat and baggage included plus a sensible terminal experience. That’s not true for most.

    I’m not implying anything at all, I’m asking 🙂 if you wouldn’t fly at 5am on a Wizz Air from Luton then it’s not a valid base for comparison.

    However, unless BA is the only choice you would consider, then the cash price for the fare you take shouldn’t be the base either, as you’re not ‘starting from 0’ when counting.

    I’m not a flyer, so I don’t know, but I think ‘for most’ there is a pretty large market between 5am Wizz Airs and BA at the top end. Some would only consider that top end, and in that case fair enough, but ‘for most’ I suspect they are not using the cash fare they would actually pay as the basis for their calculation.

    By contrast when I redeem those Avios at 0.66p or 0.5p value, I know I am getting *exactly* that value because there is no cheaper diesel which is available to me than the stuff I buy at Sainsburys.

    I appreciate that for many miles collectors that’s not what it’s about, and it’s instead about specifically getting something they definitely wouldn’t enjoy if they had to pay cash for – and again, fair enough – but it’s important to acknowledge that there’s a difference in those valuations; one is genuine money saving and the other isn’t.

    Indeed, once you factor in taxes etc AIUI paradoxically it’s possible for a 2 or 3p Avios redemption to actually cost money compared to the open market cash fare you’d choose if you were paying…

    Once you take into account hand and checked luggage, I don’t think BA is really that far off LCCs. They are “cheap” if you can get by stuffing everything into a backpack.

    The Savage Squirrel 565 posts

    Given current flight pricing and the helpful way reward flight saver redemptions interact with the Amex voucher, surely you’d be mad to swap out to Nectar anyway? Most ofy recent redemptions have been for way more than 1p per Avios.

    Well the original 0.8p pricing was at a time when there were still some pretty severe Covid hurdles and uncertainties, so it wasn’t so much the Avios vs cash rate equation as it was overseas hurdles making it not worth the hassle (“red” list countries changing weekly, testing requirements, risk of not being able to return, etc etc). A hassle-free 0.8p looked far more attractive vs that and probably nudged me and a lot of others to take advantage when we might not have ordinarily. Probably sped up the devaluation of the conversion rate considerably and here’s the next step.

    Ihar 111 posts

    Never made sense to me, if the point (?!) of Avios was to drive flight redemption/customer loyalty. Essential spend (via Nectar) vs discretionary spend (flights) are completely different. As are the business models / margins for the businesses.

    As for the “value” of an Avios point, a return LHR-LAX for 2 in First for £3k “cash/Avios” (with an AMEX 241)….. You can keep your “free” corn flakes and I’ll keep my “free” LPGS. (while it lasts!!)

    memesweeper 1,242 posts

    Every other Nectar partner has been the same rate in and out. What clout BA must have with Nectar to break that model, and shame on both parties that they have let it slide into further asymmetry.

    I don’t know what BA charge Amex and Barclays per Avios, but come renegotiating time if IAG loyalty are holding out more than 0.5p each they may find it’s not the sellers market it used to be.

    I’m now concerned for a significant upcoming devaluation in Avios on actual flights 🙁 this change sends the wrong message to collectors and gives us no confidence for the future.

    SamG 1,636 posts

    Article today in the Telegraph re: soaring Euro flight prices this summer. Plenty of “real” value to be had flying on Avios vs the lo co players. That’s before I factor in Heathrow being one of my nearest airports and having status so get fast track / lounge / seats on economy redemptions (that come with bags) – all things I would actually pay for

    Alex G 450 posts

    Article today in the Telegraph re: soaring Euro flight prices this summer. Plenty of “real” value to be had flying on Avios vs the lo co players. That’s before I factor in Heathrow being one of my nearest airports and having status so get fast track / lounge / seats on economy redemptions (that come with bags) – all things I would actually pay for

    Plenty of real value to be had on BA short haul? Well I’m not finding it. My OH is going to Faro at Easter. Paying £75 return with LCCs. Best value redemption would be 5800 Avios plus £90. He doesn’t need checked baggage. The LCC flight times are more convenient. And their IT works properly.

    zapato1060 625 posts

    Its all about price for me. If I dont need baggage and WizzAir 5am is peanuts then I would take it. Im not Avios rich so only long haul J/F (possibly Y in Peak?) is in my eyes, an Avios’s worth.

    SamG 1,636 posts

    Article today in the Telegraph re: soaring Euro flight prices this summer. Plenty of “real” value to be had flying on Avios vs the lo co players. That’s before I factor in Heathrow being one of my nearest airports and having status so get fast track / lounge / seats on economy redemptions (that come with bags) – all things I would actually pay for

    Plenty of real value to be had on BA short haul? Well I’m not finding it. My OH is going to Faro at Easter. Paying £75 return with LCCs. Best value redemption would be 5800 Avios plus £90. He doesn’t need checked baggage. The LCC flight times are more convenient. And their IT works properly.

    £75 rtn is a bargain! Though small bag only I’m assuming? Whereas I got back from Rome last night – booked a couple of months out but Fri night to Mon evening was around £225 rtn with a seat and a cabin case on a loco (which realistically most people need to travel with, I certainly do). So 5800 + £90 was good value considering I also got to fly to/from LHR, use fast track & the lounges + it was flexible.

    Looking at similar upcoming plans – summer trip to Spain, Canaries for New Year I see similar, but it will be personal to your travel plans & style of course

    jj 526 posts

    Its all about price for me. If I dont need baggage and WizzAir 5am is peanuts then I would take it. Im not Avios rich so only long haul J/F (possibly Y in Peak?) is in my eyes, an Avios’s worth.

    And many people share you view.

    It’s also cheaper to drive a VW Polo than a Range Rover. Both will get you to your destination at the same time, and VW’s IT is more reliable. But many people are willing to pay mare for additional space and comfort.

    We’re all different.

    Bill_B 87 posts

    Article today in the Telegraph re: soaring Euro flight prices this summer. Plenty of “real” value to be had flying on Avios vs the lo co players. That’s before I factor in Heathrow being one of my nearest airports and having status so get fast track / lounge / seats on economy redemptions (that come with bags) – all things I would actually pay for

    Plenty of real value to be had on BA short haul? Well I’m not finding it. My OH is going to Faro at Easter. Paying £75 return with LCCs. Best value redemption would be 5800 Avios plus £90. He doesn’t need checked baggage. The LCC flight times are more convenient. And their IT works properly.

    Current prices are £335 with RyanAir for the Easter Weekend and more for other LCCs. If you mix SAS/EasyJet, you can get to £244. Of course no Avios availability then either. With a cabin bag ~£130 seems to be typical for the cheapest summer fares on LCCs. Paying an extra £20 for flexibility to cancel doesn’t seem too crazy to me, not accounting for any extra status benefits.

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