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I like to think of myself as a kind, gentle, mild-mannered type of fellow.
However, Craig posted this morning, and it made my blood boil. No, not at Craig, but at his target – British Airways, and more specifically, the excruciatingly bad value they offer for their own Avios loyalty currency.
So what’s my rant?
Funnily enough, the subject of my ire is actually one of the lesser rip-offs in the Avios portfolio: the cost of food on British Airways flights. Indeed, it’s sufficiently reasonable value (for me), that I even redeemed some on a flight recently. I got a Berry Burst Porridge for 175 Avios rather than £1.30 (it was dreadful), and some Pip Organic Cloudy Apple juice for 350 Avios rather than £2.70 (very nice).
All very well. However, the crucial point with the above, is BA are very clearly “valuing Avios”, as they are allowing you to pay with Avios, as a clear alternative to cash. They are therefore putting an express, unequivocal, cash valuation on Avios.
So, let’s have a look at the valuation on the in-flight “fresh food” menu:
The Avios can be valued as follows:
- Toastie = 0.792p each
- Bacon roll = 0.792p each
- Ham and cheese sandwich = 0.78p each
- Ploughmans = 0.792p each
- Ham and Egg (with, naturally, pineapple piccalilli) = 0.792p each
So, if I’m being charitable to BA, that’s basically 0.8p per Avios. We generally value an Avios point/mile/whatever at 1p, so that’s not that bad. Also, with my wife’s credit card spending, I have an Avios mountain, so I actually really don’t mind spending Avios if I’m getting 0.8p “value” in return.
So why are BA taking the p***?
Well, BA are clearly valuing Avios here, and that clear valuation is south of 0.8p per Avios. Thanks for the valuation BA, it’s helpful. But hang on [rant alert], don’t you value Avios elsewhere? Oh yes you do – when you sell them to your loyal BA Executive customers, desperate to loyally book your flights.
So what’s the valuation here? What do your loyal customers pay per Avios?
- At the lowest end of the scale, 1,000 Avios will cost you £31 – so that’s 3.1 pence per Avios. If you ever pay this, pretty much regardless of the circumstances, you need to commit yourself.
- At the mid-point, 50,000 Avios is £815, so 1.63 pence each. This is “good long hard look in the mirror” territory, but not totally unforgivable with mitigating circumstances.
- At the “best value” point, 100,000 Avios is £1,615, so 1.615 pence each.
So, as you can see, even a “very best value”, bulk-buy of Avios will cost you MORE THAN TWICE the BA valuation of Avios on a commercial transaction on one of its flights.
Ever get the feeling you’re being ripped off?
It’s like an exaggerated version of the FX rates you see at airports, where they’ll buy your Euros for £0.70, but sell you Euros at £0.98. We know that’s a rip-off, and frankly I think exactly the same description can be applied to BA’s very clear, and very biased, Avios valuations.
So, while I will actually continue to spend my Avios at 0.8p value, I certainly won’t ever buy them at BA’s prices. The sad truth is though, there’s lots of people that will. The really sad point is, it’s almost certain that none of them are reading this article.