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Joe has recently been running a fun, if somewhat far-fetched, series on earning elite status from British Airways Executive Club by flying back and forth to Sofia, Bulgaria. To make the numbers more appealing, he has been applying a value of 1p to each Avios you would earn along the way. As one reader pointed out… is this still realistic, considering that you can simply buy Business Class return flights to North America for £1,000 or so?

Reasons Why Avios are Still Worth 1p

1. Because BA will let you Part Pay With Avios and receive 1p per Avios

Every time you book that Tier Point run to Sofia, you will be given the opportunity to reduce the cost by £30 in exchange for 3,000 Avios…

It doesn’t get much simpler than this. 3,000 Avios equals £30 of real, actual money saved.

I’m not sure whether 300,000 Avios = £3,000 using this method, but for calculating the value of Avios earned on a short-haul flight it works perfectly…  Note that a Silver member would earn just over 5,000 Avios for a return ticket in Club Europe between London and Sofia. Every single time I will click that button to reduce my cost by £30, and still end up Avios-positive when my trip is complete.

2. Because Iberia Plus is still brilliant!

Back in August, Iberia Plus ran another one of its 50%-off award sales. In my experience, Iberia Plus runs this promotion once or twice a year, in good times and bad.

34,000 Avios for an off-peak return ticket in Business Class between Madrid and New York, Chicago or Boston?  50,000 Avios for peak dates? It isn’t hard to justify a valuation of 1p per Avios when you use your Avios to fly with Iberia…

3. Because reward flights are cancellable and refundable

It is certainly legitimate to compare prices between two similar ways of obtaining a plane ticket. On the one hand, you can simply buy a normal ticket in a fare sale. On the other hand, you can mess around with award availability limitations and pay a substantial amount in surcharges and taxes for your “reward” ticket. It might not be much of a stretch to conclude that you should just buy a ticket with cash.

But you’d be missing out on one crucial element – that cheap fare sale deal is non-refundable. Even if you feel confident that a BA voucher will be worth its face value, you might still be looking for replacement flights that aren’t nearly so cheap.

Book an award flight using your Avios, however, and you are free to cancel at any time up to 24 hours before departure. You will pay a £35 cancellation fee, but the Avios will be back in your account immediately, with those taxes and surcharges to follow shortly thereafter.

The option of being able to cancel your flights is valuable! How valuable depends on each individual circumstance. But 2020 has surely shown that the flexibility to cancel at will is much preferable to parsing the terms & conditions of vouchers or crossing your fingers in hope of a flight cancellation.

Reasons Why Avios are NOT Worth 1p

1. Are you REALLY sure that British Airways cannot fail?

I know that it seems impossible. British Airways collapse? The national flag carrier? But how much longer can airlines continue hemorrhaging cash and still survive? Is travel EVER going to return to the way it was? I’m not so sure…  And even if travel starts to ramp up, a substantial number of passengers won’t be paying cash for their flights, they’ll be using their vouchers accumulated during 2020. A sort of Ponzi scheme if you will…

It should go without saying, but if British Airways no longer exists, then your Avios are definitely NOT worth 1p.

2. For many people, Avios were NEVER worth 1p

To reach a valuation of 1p – especially when using your Avios on British Airways award flights – some assumptions need to be made. Some of the more common ones are:

1. You fly long-haul in a premium cabin (and value this accordingly)
2. You have an American Express 2-for-1 voucher
3. You use Reward Flight Saver during half term
4. Heathrow or Gatwick are convenient departure airports for you

If you are a family of 4 wanting to fly on a long-haul holiday in World Traveller, you would almost never receive 1p in value for your Avios. And so it remains…

 

Conclusion

Perhaps the middle of a pandemic isn’t the right moment to be re-assessing the value of your Avios. Too much is uncertain… Perhaps it’s due to passivity, but Joe and I are still happy working off a value of 1p per Avios.

But what about you? Let us know in the comments section…