British Airways reduces the cost of purchasing Avios for some Executive Club members, but is it a good deal?
British Airways and Iberia have overhauled the pricing structure to purchase their loyalty currency outright, and it's good news for those based in the U.S.
Like many loyalty programs, you can purchase Avios outright from British Airway's Executive Club or the Iberia Plus program without needing to set foot on an aircraft or reach the minimum spend on a credit card. British Airways and Iberia have announced that from May 1, 2023, the cost of buying Avios will be increasing for members based in the United Kingdom and Europe (paying in British pounds and euros, respectively), but those based in the U.S. will see lower costs.
The more Avios you purchase, the cheaper the price will be per Avios. Previously, Executive Club and Iberia Plus members in the U.S. would be charged 4 cents per Avios when purchasing the minimum amount (2,000 Avios). However, this price dropped as you purchased more Avios, falling to as low as 2.7 cents per Avios when purchasing the maximum amount (200,000 Avios).
Under the new pricing, which kicks in on May 1, the cost will reduce to 3.2 cents apiece when purchasing 2,000 Avios and 2.3 cents apiece when purchasing 200,000 Avios, making this a positive change for Avios collectors in the U.S.
At the same time, Avios collectors based in the U.K. and Europe will see small increases in their pricing. It's worth noting, though, that the per-Avios pricing is still more favorable than the dollar amounts, based on current exchange rates:
- 2,000 Avios cost 49 British pounds, which is approximately $61 (U.S. travelers will pay $65 for 2,000 Avios).
- 200,000 Avios cost 3,539 British pounds, which is approximately $4,391 (U.S. travelers will pay $4,599 for 200,000 Avios).
Of course, even at the new pricing, it's rarely a good deal to buy Avios, as you will pay far more to purchase the points and miles than you'll get in value when you redeem them. TPG values Avios at 1.5 cents each (as they are one of the easiest currencies to earn and redeem), so paying 2.3 to 3.2 cents per Avios under the new pricing structure doesn't add up.
The offer is much more attractive when the programs offer discounts or bonus sales, which can reduce the price by 50% or more. However, it's still rarely a great idea to purchase points and miles without a specific use in mind, even during a sale. Loyalty programs can (and do) devalue their loyalty currencies without notice.
Still, if you have a redemption in mind but don't have quite enough points to book that dream trip and can't earn another credit card welcome bonus to make up the difference (perhaps because you have reached Chase's 5/24 rule), it can be a savvy way to top off your account and maximize your travel.
Know, though, that you'd likely be better off transferring points from credit card programs like Chase Ultimate Rewards, American Express Membership Rewards and Capital One — even once the lower prices take effect on May 1.
U.S. members of British Airways Executive Club and Iberia Plus were previously at a disadvantage when purchasing Avios due to the huge price discrepancy compared with those based in the U.K. and Europe. The new pricing will be more even across geographies — though without a promotion, you'll be hard-pressed to get enough value out of buying Avios when it's time to redeem them.
Look out for regular discounts and bonus offers from these programs to help reduce the cost. That way, if you find yourself needing a few more Avios for a redemption you're eyeing, you can add them to your account without taking a loss.