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As Head For Points reported a couple of days ago, British Airways Executive Club has extended it’s ‘£1 fee’ redemptions trial to include all of its UK and European routes (Zones 1-3).
Where Reward Flight Saver taxes/fees used to be capped at £17.50 each way in Economy and £25 in Business Class, you are now presented with the option of paying as little as 50p each way:
On the face of it, that might sound great – but there are a couple of issues with the way BA has gone about this.
Craig has already flagged that there’s a minor devaluation baked into the changes on many routes from Europe to the UK.
Perhaps more significant though, is the way BA has decided to lay out the new pricing options.
As you can see in the image above, when you select a Reward Flight Saver flight now, the only option that you are immediately presented with is the X Avios + 50p one.
50p might be good, but 8,000 Avios for a one way Economy flight to Paris seems very high! – it used to be 4,500 (Peak) + £17.50. I don’t know about you, but 3,500 more Avios to save £17 sounds like a very bad deal to me.
Fortunately, the old redemption options (or very similar ones at least), are in fact still available – but you need to click on the small “More pricing options” line written in blue to see them:
4,500 Avios + £15.50, is actually £2 cheaper than the old pricing!
I don’t want to be completely negative here – BA is providing more options for members, and that’s usually a good thing. My issue is the way the booking system initially only presents the worst value option (assuming you value Avios at ~1p each) – it seems like a cynical move.
Most casual Avios collectors are only going to pay attention to the 50p option and will end up getting very bad value from a proportion of the Avios they redeem. Maybe that is unintentional by BA? I doubt it.
New sweet spot Avios redemption
One of the enduring truths of points/miles is that where there is change, there is opportunity. No matter how bleak a devaluation may look at first glance, there are almost always some new gold nuggets just waiting to be dug out. The latest Avios changes are no exception.
As I mentioned above, you can actually now save £2 flying to Paris (and presumably elsewhere) compared to the old Reward Flight Saver fees, but that’s not going to get anyone very excited…
More interesting is something that I first saw being picked up by Tim over at PointsToBeMade. Business Class redemptions to Zone 3 destinations like Athens, Istanbul, Malta, St. Petersburg, etc, are now considerably better value than they used to be on Peak dates.
Take, for example, a Club Europe return from London to Istanbul, which would previously have cost 40,000 Avios + £50.
You can now book exactly the same itinerary for 35,200 Avios + £50 (but remember you have to click on “More pricing options” to see it!):
For a family of 4, that would work out as a saving of nearly 20,000 Avios!
Bottom line
For savvy Avios collectors, I’d argue the latest changes are positive on balance.
For more casual collectors though, the way the new pricing is presented means that they will end up getting less value from their Avios than they used to.
What do you think about the changes?
From a casual collector perspective, I would respectfully disagree. With no particular redemption plan in mind and no real obsession with maximising value, the option to pay less cash is a real win. My parents are sitting on +200k Avios from Tesco shopping mostly over the years, but would struggle to pay the £600+ taxes & charges on a business redemption, while long-haul economy makes no sense since the charges are almost the same as a cash ticket. Being able to pay 50k Avios + £1 for long-haul would open up new opportunities for the casual collector.
I definitely take the point that not everybody is that interested in maximising the value of every single Avios (I’m actually kind of in that category myself to an extent), but I think people do still need to be realistic about the opportunity cost of a low value redemption.
For example, your parents collected their Avios via Tesco. Each of those tesco points is worth 2.4 Avios, but they could also have been worth 2-3p each in real money depending on whether your parents (or other family members) ever take taxis (Uber) or trains (formerly redspottedhanky), eat out, etc.
If we conservatively say 2p per tesco point then, you really need to be getting more than 0.8p of value per Avios (o.8 x 2.4 = 1.92p) for it to make sense to transfer to Avios rather than take advantage of the other options. With the 50p fares, the value per Avios is sometimes only about half that.
The situation is admittedly different for business travellers who genuinely rack up Avios for free (on company dime anyway), but for anyone who transfers other types of points to Avios (Tesco, Amex, Heathrow Rewards, etc), it’s reasonable to consider what else you could have done with the points.
There is certainly room for different perspectives, and your point is a valid one.
However, I don’t think that BA have even the slightest inclination of doing 50k Avios long-haul returns for free, especially with long-haul APD what it is.
But assuming that option ever becomes available, many people in your parents’ situation would be better off simply using their Tesco vouchers for actual cash off the shopping bill, and then just pay the cheap long-haul fares with Norwegian or a BA fare sale.
After being in the points and miles game for more than two decades, my advice is simply to be able to put your own value on what 1,000 Avios or 1,000 whatever miles or hotel points are worth to you. Then, when you are paying in cash, let’s say, comparing a Lufty £300 economy ticket with a BA economy ticket for £350 one for the same trip – if the BA one nets you £100 of Avios then it’s less expensive than the £300 Lufty one which will more than likely give you nil. Getting the number right is easier on a short term basis rather than than on a long term basis. For example, my value of Avios points eight or so years ago was £2 per 1,000. This is because I could book fully cancellable and modifiable 2x segment journeys from Brussels to anywhere in the UK and the Crown dependencies for 2,250 Avios plus 9 EUR per segment. Thus, when comparing long haul flights, I always booked BA. Simply because for my £1000+ business tickets I was getting Avios that I put a high value on. It is the other way round now. I wouldn’t value Avios at more than £0.50 per 1,000 now for my current circumstances [based in the regions of U.K]. As a consequence I no longer fly BA or OneWorld long haul. Which has its benefits and downsides.
I meant previously £20 per 1,000 and currently £5 per 1,000 above. Decimal points…
Very fair point – it’s all well and good people like me and Craig coming up with rough averages for value, but fundamentally it always comes down to what each individual actually wants to do with their points/miles. I love Alaska Miles, for example, but they’re not much use if you want to travel intra-EU in Economy.