Avios changes 3: understanding the new spending rates

The changes to, and devaluation of, Avios / British Airways Executive Club announced yesterday are hugely complex and the three articles today are simply scratching the surface.  I will return to this topic tomorrow.

Key link: ‘Club Changes’ page on ba.com

Here are the other articles in this series you may have missed:

1. Understanding the new tier point rules

2. Understanding the new earning rates

4. What is an Avios point worth after April 28th?

5. Exploiting the ‘no repricing on date changes’ rule

6. Why are off-peak upgrades now more expensive than peak?

7. Save 43% of your Avios on long-haul redemptions if you fly Iberia

8. Partner redemptions may be cheaper if booked on iberia.com

9. What will happen to airline partner earning rates?

10. Are you a winner or a loser overall?

Remember that you can continue to book at the current rates until April 28th.  The FAQ in the link above implies that date changes (but only date changes) made after April 28th will not trigger a repricing either.

Availability

The one upside on the spend side is that BA now guarantees to make two Club World / Club Europe and four World Traveller / Eurotraveller seats available on every flight for redemption.

Ironically, this was not done to benefit you but to help reassure potential purchasers of Avios Group that British Airways would make a guaranteed supply of seats available.

It is not yet clear if ‘two means two’.  airberlin, Etihad and Air Canada – off the top of my head – are airlines which do not release more than two seats in Business Class and are thus out of bounds for families.

It would, surely, be suicidal for BA to re-focus the Executive Club on business travellers – who are more likely to have dependent children than the students and pensioners who are being jettisoned – and then not make enough seats available for a family?

The peak and off peak calendar

The key change is the introduction of a calendar of peak and off peak dates.  Roughly 1/3rd of the year has been classified as ‘peak’ (marked with a ‘x’).

When you think about it, there are some obvious flaws to this idea:

• Peak dates are based around UK school holidays.  Whilst flights are busy at such times, they are very low yielding (see BA’s £1,007 tickets over Christmas in Club World).  Surely a good time to encourage people to burn Avios points is a time when you can’t sell many high priced cash tickets?
• It takes no account of seasonality.   You will pay a premium to fly to Dubai in August even though you would have to be crazy to do so.
• It takes no account of peak holiday periods in other countries.  If you live abroad and want to visit the UK when your kids are off school, it may well be a cheaper off-peak time.  UK families will be pushed into peak redemptions.
• Whilst I don’t want to argue with BA’s modellers, Christmas Day is NOT a peak day.  Planes are generally empty and fare are rock bottom.  I have flown on Christmas Day in the past.

What no-one seems to have spotted yet is that the Iberia Plus calendar of peak dates is totally different to the BA calendar.  Iberia treats January 8th to March 17th as off-peak, for example, whilst BA has the two half-term weeks in February marked as peak.

On these peak days, it will be cheaper to transfer your Avios to Iberia Plus and book from there as you will be switching from a BA peak date to an Iberia Plus non-peak date.  The downside is that BA redemptions booked via Iberia Plus cannot be cancelled or changed.

Economy

The prices of economy redemptions are unchanged.  During off-peak periods they will actually reduce.

On long-haul, of course, economy redemptions are often terrible value for money.  This may change if fuel surcharges are reduced aggressively.  The only exceptions are when travelling at super-peak periods, when you are not staying over a Saturday night or when you only need a one-way ticket.

For comparison, here is the existing chart:

Premium cabins

The picture is not so rosy in other classes.

Currently BA runs a 1 / 1.5 / 2 / 3 system for pricing across World Traveller, World Traveller Plus, Club World and First.

This is moving to 1 / 2 / 3 / 4.  Club World pricing goes from 200% to 300% of World Traveller so a 50% increase at peak periods.  First goes from 300% to 400% so a 33% increase at peak periods.

The increase is smaller off peak – Club World tickets increase by 25% in Band 9 whilst First tickets increase by 13%.

In practice, this means a California Club World ticket going up from 100,000 Avios to 125,000 or 150,000 depending on travel date.  Dubai goes from 80,000 Avios in Club World to 100,000 off-peak or 120,000 peak.

Partner awards

All partner awards are now priced as Peak pricing.

This effectively means a 50% increase in Business Class and a 33% increase in First Class.

At off-peak periods, two planes flying identical routes (eg BA and Cathay to Hong Kong) will cost a different amount of Avios points.

The infamous Dublin to Boston run in Business Class on Aer Lingus will increase from 50,000 Avios to 75,000 Avios return, for example, plus £75 or so of tax.  It will remain 25,000 Avios return in Economy.

Partner chart for two or more oneworld carriers

The little-know partner chart for rewards involving two different oneworld airlines, neither of which is BA, will presumably also change.  It has not yet been released.

Upgrade pricing

There will be some minor improvements here.  However, some of the comments I saw yesterday got the wrong end of the stick.

From December 2015, you can upgrade World Traveller tickets in Y, B, H, K, M, V, L, S or N ticket buckets.  This is an improvement over the current Y, B, H.

However, you will still only be able to upgrade by one class.  World Traveller will upgrade into World Traveller Plus.  As this is a very small cabin it is unlikely that very many seats – one or two per flight at most – would be made available for upgrades, and these seats will also be available for full redemptions.

On short haul, this may be a more genuine improvement as Club Europe availability is often OK.

The cost of long-haul upgrades will increase because it will remain the difference in cost between the ticket you have and the ticket you want.  Upgrading to World Traveller Plus to San Francisco will be 50,000 Avios return compared to the current 25,000 Avios.   The increase is due to World Traveller Plus redemptions increasing in price by 25,000 Avios.

Free domestic feeders are abolished on European redemptions

When Avios launched, both BA and Iberia offered free connecting flights domestically.  Iberia abandoned the idea within a year.  BA is now abandoning it for short-haul but retaining it for long-haul.

European redemptions now make little sense if you live outside London.  Hamburg would be 18,000 Avios + £70 per person with the ‘joy’ of changing in Heathrow thrown in.  easyJet would probably sell you a cash ticket from your regional airport for £70.

I see the logic in what has been done, because APD alone meant that 9,000 Avios + £35 was a bad deal for the airline.  It didn’t help that BA allowed stopovers in London because this meant APD was payable on both flights.

This could have been handled better.  The Reward Flight Saver taxes could have been capped at £35 even though the number of Avios doubled.  Stopovers could have been banned to save BA paying out additional APD.

What has been done has effectively disenfranchised a large part of the Avios customer base outside London.

Click for the next article – What is an Avios point worth after April 28th?

How to earn Avios from UK credit cards (December 2021)

As a reminder, there are various ways of earning Avios points from UK credit cards.  Many cards also have generous sign-up bonuses!

There are two official British Airways American Express cards with attractive sign-up bonuses:

British Airways American Express

5,000 Avios for signing up, no annual fee and an Economy 2-4-1 voucher for spending ….. Read our full review

British Airways American Express Premium Plus

25,000 Avios and the UK’s most valuable credit card perk – the 2-4-1 companion voucher Read our full review

You can also get generous sign-up bonuses by applying for American Express cards which earn Membership Rewards points, such as:

American Express Preferred Rewards Gold

Your best beginner’s card – 20,000 points, FREE for a year & two airport lounge passes Read our full review

The Platinum Card from American Express

30,000 points and an unbeatable set of travel benefits – for a fee Read our full review

Run your own business?

We recommend Capital On Tap for limited companies. You earn 1 Avios per £1 which is impressive for a Visa card, along with a sign-up bonus worth 10,500 Avios:

Capital On Tap Business Rewards Visa

The most generous Avios Visa or Mastercard for a limited company Read our full review

You should also consider the British Airways Accelerating Business credit card. This is open to sole traders as well as limited companies and has a 30,000 Avios sign-up bonus:

British Airways Accelerating Business American Express

30,000 Avios sign-up bonus – plus annual bonuses of up to 30,000 Avios Read our full review

Click here to read our detailed summary of all UK credit cards which earn Avios. This includes both personal and small business cards.

(Want to earn more Avios?  Click here to visit our home page for our latest articles on earning and spending your Avios points and click here to see how to earn more Avios this month from offers and promotions.)