I really got my hopes up reading headlines yesterday that British Airways had massively dropped redemption surcharges on award tickets. In once sense, it is true, but it will cost your more Avios in what can better be described as an extended cash + points redemption option. Nevertheless, that’s still good news.
British Airways Reduces Redemption Surcharges In Expansion Of Cash + Miles Scheme
British Airways will now allow you to use more Avios points in order to reduce your out-of-pocket cash expenses on award tickets. Points do not have a fixed value, but thus far appear to be worth 1.5 to 2.0 cents each when compared to the fees that they offset.
For example, let’s take Los Angeles – London, which carries a notoriously high surcharge (as do all British Airways premium cabin tickets originating in the USA).
- Los Angeles (LAX) – London (LHR)
- Old Price – 62,500 Avios + $879
- New Price – 90,000 Avios + $350
As you can see, you can use 27,500 Avios to offset $529 in fees, giving you 1.92 cents per Avios point in value.
Should you want to use fewer miles, the old rates are still available. This new option complements the existing option and marks an expansion of a cash + miles scheme British Airways introduced a couple of years ago on shorthaul flights.
For those who are able to generate credit card points rapidly, this is a great option, as British Airways traditionally has offered more award space (it guarantees a number of award seats on each flight and the high fees often turn people away, leading to greater availability). For those who generate miles more slowly, I am not sure this is the best option.
CONCLUSION
As I find increasing value in miles and points since my ability to rapidly generate them has been depleted, I will not be one of the takers for this new scheme. But I do appreciate this option and know many will appreciate the opportunity to utilize more miles in exchange for less dollars. However, if you are not getting at least two cents per value with your points, consider a cash back card.
Any time you are given more options it’s a plus. I see this as a big positive if they give close to 2 cents per avios on fee exchange.
“However, if you are not getting at least two cents per value with your points, consider a cash back card.”
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A good recommendation if you’re mainly acquiring Avios from spending ONLY in the 1x category of whichever card you use, but as soon as you earn above 1x, e.g. starting at 1.5x or 2x, when you multiply that by the cents per point value you get from a given redemption, it would need to add up to more than, say, a 2% cashback card (or your best cashback card) earns. For instance: 1.5 Avios X 1.4 cpp = 2.1% “cashback” – 2 Avios X 1.4 cpp = 2.8% “cashback.”
I know most here know that already, but I point it out for any newbies who might be reading.
Of course, cashback is ultimately the easiest, no-frustration route, as opposed to airline miles/points. But then, one is likely accumulating miles from flying as well, so one has to find a way to redeem those at good value, too.
Oops… I wrote: For instance: 1.5 Avios X 1.4 cpp = 2.1% “cashback” – 2 Avios X 1.4 cpp = 2.8% “cashback.”
That “-” is not a minus sign… Should have been a comma.
A more apt description is to change the headline to Massive BA Avios depreciation.