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Today TPG Contributor Nick Ewen explains the differences and similarities between British Airways and Iberia Avios, and how the two programs can be used together to maximize award travel.
Many points & miles enthusiasts have a love/hate relationship with British Airways, specifically due to their loyalty program “reboot” back in 2011 (which annihilated the value of the old Executive Club program in favor of the new Avios currency), and the airline’s fondness of taxes and fees on award tickets.
Avios are here to stay, but there are some strategies for getting around the taxes and fees. One of my personal favorites is by leveraging Iberia’s loyalty program, which also uses Avios as its form of mileage. Both British Airways and Iberia are transfer partners with American Express Membership Rewards. In addition, you can transfer Avios from British Airways to Iberia (and vice versa). This allows you to convert Ultimate Rewards points (from cards like the Chase Sapphire Preferred, Ink Plus or Ink Bold) to British Airways Avios and then to Iberia Avios. In this post, I’ll take a look at this option to help you figure out when it makes sense and learn how to get the most out of your hard-earned points.
For starters, both British Airways and Iberia price out Avios award tickets using a distance-based formula. This (unfortunately) penalizes you for having connections, as the distance traveled is based on the actual distance flown. For example, taking a one-way business class flight from New York to Madrid would set you back 55,000 Avios if you connect through London, but only 40,000 if you fly direct.
Both airlines have an “Avios Calculator” that you can use to price out sample awards (here for British Airways, here for Iberia). Unfortunately, they both have little quirks that prevent either one from being perfect. British Airways’ calculator is definitely superior, as it shows options on BA metal plus direct flight options on partner airlines. It also highlights taxes & fees. Iberia, on the other hand, will only show the Avios required for travel on their own metal, though they do show you both economy and business class rates on the same page.
In addition to following a distance-based reward formula, both British Airways and Iberia have the same transfer ratio from Membership Rewards: 1000 points = 1000 Avios. Unfortunately, American Express claims that transfers to British Airways can take up to 48 hours, while transfers to Iberia can take a whopping four to seven days! More details are available online at the Membership Rewards transfer site. Existing members can log in and then initiate transfers in 1000-point increments.
British Airways is also a transfer partner of Chase Ultimate Rewards, with the same transfer ratio of 1000 points = 1000 Avios. To transfer points, cardholders should log in to their Chase account, click on “Ultimate Rewards” on the right-hand side, and then “Point Transfer” at the top. These transfers also need to be made in 1000-point increments, though they will process instantly. I experienced this first-hand back in December when I transferred 20,000 Ultimate Rewards points to British Airways to book two round-trip economy tickets on American Airlines from Miami to Curacao for a friend’s wedding. Since the flights were pricing at over $700 per person, this was a great example of maximizing Avios’ distance-based redemptions.
Before we get into cases where it makes sense to use Iberia Avios over British Airways Avios, let’s go through the details of transferring between the two programs. For starters, both your Executive Club and Iberia Plus accounts must be at least three months old in order to move Avios back and forth. My Iberia Plus account is still relatively new, so when I followed TPG’s instructions, I got the above error message. If you ever think that you would want to utilize the reciprocity granted by these programs, go ahead and open an Iberia Plus account now by visiting this link.
It’s also important to realize that in order to enable this transferability between accounts, you must “initialize” your Iberia Plus account by creating some activity on it. This can be done by flying on Iberia or a partner airline, transferring in Membership Rewards points, purchasing Avios through Iberia, or double-dipping with Iberia on a Hilton stay. Through August 31, you can also get 50 free miles through their Great Avios Conquest trivia game, which will satisfy the activity requirement.
However, even if my accounts were of the appropriate age, that still might not be enough. TPG Contributor Jason Steele wrote about a frustrating glitch in making these transfers back in April, and some recent threads on FlyerTalk (most recently from last week) indicate that this may still be going on. Fortunately, Jason was able to figure out a workaround to make the transfer using Avios.com; just make sure that your e-mail address and date of birth on all accounts match exactly!
So when does it make sense to utilize this transferability? The first (and most obvious) example is to avoid fuel surcharges on Iberia flights. Even though British Airways and Iberia are owned by the same parent company and have the same mileage currency, the taxes and fees on award tickets can differ drastically. Consider a simple round-trip flight from JFK to Madrid next May. Booking through British Airways would set you back 80,000 Avios plus $955.36.
Redeeming through Iberia for the exact same flights on the exact same dates would set you back 80,000 Avios and only $233.76, a savings of $721.60!
This strategy can also be used when looking at connecting itineraries to other destinations in Europe. For example, if you wanted to fly to Paris next May, British Airways would route you through London and charge you 98,000 Avios plus $1117.27.
Routing through Madrid on Iberia would set you back 110,000 Avios but only $368.77.
By spending 12,000 additional Avios, you’re keeping $748.50 in your pocket, a value of over 6 cents/point! Alternatively, since intra-Europe business class isn’t much to write home about, the Iberia booking engine makes it easy to mix and match business class flights with economy flights.
If you chose to downgrade the short Madrid-Paris and Paris-Madrid flights down to coach, your total cost drops to just 95,000 Avios and $355.33.
If you’re planning on booking flights on Iberia, you can search for business class award space on ExpertFlyer.com (U class). However, during my research, I found that Iberia’s website often didn’t match the inventory displayed by ExpertFlyer, while British Airways’ site did. For example, at the time of writing, ExpertFlyer indicates that there are two business class award seats on the later Miami-Madrid on Monday December 15, 2014.
Strangely, Iberia’s website doesn’t show this, highlighting only Economy class availability.
British Airways, on the other hand, shows both seats when you search for this option.
If you encounter this issue on a flight you’re trying to book, I recommend calling Iberia and trying to book over the phone.
Despite these scenarios that allow significant savings booking through Iberia, there are also times where British Airways Avios are the better option. For example, I’ve found that flights from North America to South America not only cost less in taxes & fees, but also (for some reason) require fewer Avios when booked through British Airways as opposed to Iberia. Take a look at this sample itinerary on American Airlines from Miami to Buenos Aires for next March:
When I pull up those same flights on British Airways’ website, they price out at 50,000 Avios and $87.03 in taxes & fees.
Strangely enough, Iberia wants 60,000 Avios plus $91.53.
Of course, the third option would be booking with AAdvantage miles, and since this is an off-peak MileSAAver award, it would only be 40,000 miles plus $87.03.
Keep in mind, however, that American is not a transfer partner of either Membership Rewards or Ultimate Rewards, so if you plan on transferring those points, British Airways is your best bet in this situation. I value AAdvantage miles more than Avios (though TPG values them equally), so I would rather spend them on another redemption.
I also noticed a similar discrepancy in the amount of Avios required when using Iberia to book on certain carriers. In these cases, avoiding British Airways flights saved some taxes & fees, but would set you back more Avios. I found this on three different routes:
- DFW-LHR: Iberia wanted 120,000 Avios for round-trip business class travel on American Airlines, but only 100,000 Avios for travel on British Airways.
- ORD-LHR: Iberia wanted 94,500 Avios for round-trip business class travel on American Airlines, but only 80,000 Avios for travel on British Airways.
- PHL-LHR: Iberia wanted 48,000 Avios for round-trip economy class travel on US Airways, but only 40,000 Avios for travel on British Airways.
In all of these cases, the non-British Airways option was cheaper in taxes & fees, but more expensive in Avios. However, when using Avios through British Airways, the miles and cash required were identical regardless of the carrier. If you’re miles-rich and cash-poor, this could be an option worth investigating!
One final wrinkle in this game is the current promotion that Iberia is offering. Details are scant, but if you’re booking a flight on Iberia.com, you can use your Avios to get up to a 25% discount on your purchase (up to 140€). Eligible flights will have a “descuento Avios” icon next to them. However, in order to actually see the discount, you not only need to be logged into your Iberia Plus account; you also must have enough Avios to apply the discount. This begs the question, how can people make sure to have enough in their accounts if they have no idea what “enough” is? This also appears to apply to Iberia-only itineraries; adding a segment from another carrier removes the possibility of a discount.
Navigating the ins-and-outs of the world of Avios is not an easy thing to do, but hopefully this post has provided some clarity on when it makes sense to use British Airways Avios versus Iberia Avios. Please share your questions and personal experiences regarding both Avios programs in the comments section below
British Airways Visa Signature® Card
|Intro APR||Regular APR||Annual Fee||Foreign Transaction Fee||Credit Rating|
|N/A||16.24%-23.24% Variable||$95||0%||Excellent Credit|