Why booking a British Airways flight for less than $2 is not a good way to use your Avios
British Airways Club recently introduced a tempting new offer to reduce the price of any British Airways-operated flight to just 1 British pound (about $1.25) by using Avios, but here's why it is not a good deal.
BA has offered short-haul flights for just 1 pound round-trip using Avios (Reward Flight Saver) but has now extended this to all flights operated worldwide in any cabin.
Unlike fixed-price "Book with Avios" redemptions, which are limited in availability, the new 1-pound flights are a reduction of any BA-operated flight by applying Avios to reduce the cash price; it's sometimes referred to as "Avios part payment."
Related: British Airways Executive Club: Guide to Avios, elite status and transfer partners
"We've listened to our Members' feedback and we're really excited to be introducing this latest update for them," Colm Lacy, British Airways' chief commercial officer, said in a statement. "We know that most of our customers choose the lowest cash amount when it comes to making Reward Flight bookings, so we anticipate this to be a popular option for those using Avios part payment too."
Executive Club members will still collect Avios and tier points on any flights booked using cash and Avios. So, while it may seem like a good way to use your Avios and fly for free, unfortunately, it's not. Let's crunch the numbers.
The value of Avios part payment
Say you want to fly from San Francisco International Airport (SFO) to Heathrow Airport (LHR) this summer.
You can book nonstop flights with British Airways for $1,393 round-trip in standard economy, which includes checked baggage.
You could either pay this cash fare in full or choose to reduce the price with Avios.
I have almost 150,000 Avios in my account, which would not be enough to reduce the price to 1 pound, but I could redeem my entire Avios balance to take $794 off the price.
Redeeming 145,750 Avios to save $794 would give my Avios a value of about 0.0054 cents each, and I would still need to pay the remaining balance of $599.
This is well below TPG's current valuation of Avios at 1.4 cents each.
However, rather than booking a cash fare (which I could reduce the price of with Avios), I could search for an Avios redemption ("Book with Avios") and book the same flights for 60,000 Avios, plus 150 British pounds (about $188).
While I would not earn Avios or tier points for an Avios redemption, as I would for the cash fare, I would save myself 85,750 Avios and $411 with this option. Therefore, I would not have to redeem my entire Avios balance and would pay less cash out of pocket.
Compared with the $1,393 cash ticket (minus the $185 in fees, taxes and carrier charges), redeeming 60,000 Avios to save $1,208 would give my Avios a value of 2 cents each, above our current valuation of 1.4 cents.
If you look at a business-class flight to London on the popular New York-to-London corridor, I see cash fares in September are around $3,000 round-trip.
Redeeming 145,750 Avios would save $898, giving my Avios a value of about 0.6 cents each, and I would still need to pay more than $2,000 for the fare.
Alternatively, if searching for an Avios redemption rather than reducing a cash fare with Avios, I could book the same flights for 170,000 Avios plus 350 British pounds (about $439).
Comparing this to the cash fare of $3,000 and deducting the $439 in fees, taxes and carrier charges, redeeming 170,000 Avios this way would save me $2,561, giving my Avios a value of 1.4 cents each, right around our current valuation.
Related: British Airways' Club Suites don't disappoint: On board a retrofitted 777 from London to New York
Does it ever make sense to redeem Avios this way?
Using Avios to reduce the cash fare price will consistently give your Avios a redemption value of 0.5 to 0.6 cents each, which is not a great way to maximize your travel.
However, It could make sense for some Avios collectors to redeem their Avios in this way if they are sitting on large balances they may not otherwise use. In this case, look for:
- Sale fares where the cash price is already reasonable
- Peak dates on the British Airways Club calendar when Avios redemptions would be more expensive than off-peak dates
- Dates when "Book with Avios" seats are not available
- Connecting itineraries (British Airways charges Avios redemptions per sector, so the more flights you need to take, the more Avios you will need to pay)
For example, you could book a sale fare on a connecting itinerary from Chicago's O'Hare International Airport (ORD) to Dublin Airport (DUB) for $675 round-trip or book with Avios for 68,500 Avios plus 101 British pounds ($126). Neither option would give you more than 1 cent per Avios in value, so while just paying for a regular cash fare would probably be the best option, if you did have a large Avios balance and were wanting to earn tier points to earn elite status with British Airways, you could consider the Avios part-payment option.
How to earn British Airways Avios
The easiest way to boost your Avios balance is by applying for the British Airways Visa Signature® Card (see rates and fees). This card offers new applicants to earn 75,000 Avios after spending $5,000 on purchases within the first three months from account opening.
Remember that Avios can easily be transferred 1:1 between the different programs that use this currency, so if you're not interested in the British Airways Visa Signature Card, you can instead sign up for a different credit card that earns Avios, such as the Aer Lingus Visa Signature® Card or the Iberia Visa Signature® Card. Both offer the same low $95 annual fee, a generous earning rate, and a welcome bonus of 75,000 Avios after spending $5,000 on purchases in the first three months from account opening. These cards also earn a bonus of 3 Avios per dollar spent on purchases with Iberia, British Airways, Aer Lingus and Level and 2 Avios per dollar spent on hotels when purchased directly through the hotel.
The information for the Aer Lingus Visa Signature and Iberia Visa Signature has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.
British Airways is also a transfer partner of Capital One, Chase Ultimate Rewards, American Express Membership Rewards, Bilt Rewards, Wells Fargo Rewards and Marriott Bonvoy, making Avios one of the easiest currencies to earn.
The following cards all currently offer strong welcome bonuses that you could convert to Avios:
- American Express® Gold Card: Find out your offer and see if you are eligible for as high as 100,000 Membership Rewards points after spending $8,000 on purchases within the first six months of card membership. Welcome offers vary and you may not be eligible for an offer.
- American Express Platinum Card®: Find out your offer and see if you are eligible for as high as 175,000 Membership Rewards points after you spend $12,000 on purchases within the first six months of card membership. Welcome offers vary and you may not be eligible for an offer.
- The Business Platinum Card® from American Express: Find out your offer and see if you're eligible for as high as 300,000 bonus points after spending $20,000 on purchases in the first three months of card membership. Welcome offers vary, and you may not be eligible for an offer.
- Capital One Venture Rewards Credit Card: Earn 75,000 bonus miles after spending $4,000 on purchases within the first three months from account opening.
- Capital One Venture X Rewards Credit Card: Earn 75,000 bonus miles after spending $4,000 on purchases in the first three months from account opening.
- Chase Sapphire Preferred® Card (see rates and fees): Earn 75,000 bonus points after spending $5,000 on purchases in the first three months from account opening.
- Ink Business Preferred® Credit Card (see rates and fees): Earn 100,000 bonus points after spending $8,000 on purchases in the first three months from account opening.
Bottom line
The new option to pay less than $2 for any British Airways cash fare by using Avios may seem tempting, but you won't get more than 0.6 cents per Avios in value.
You will continue to be able to obtain far more value from your Avios by searching for the limited "Book with Avios" seats, particularly those on off-peak dates that are direct flights to or from London.
If you do have a large Avios balance you are struggling to use and are considering obtaining less than 1 cent per Avios in value, look for sale fares, connecting itineraries, peak dates or dates with no Book with Avios availability to get the best deal.
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