How To Work Out Avios Point Value?

When comparing different loyalty schemes and credit cards it’s important to know the value of their loyalty ‘currency’ to see if collecting them makes sense for you. Whilst that sounds easy enough…the problem is your valuation could vary depending on numerous different factors. I’m going to cover some of the factors that might influence your Avios point value below to help you decide…

Why is it important to know your own Avios Point Value?

Because you want to get the best possible return on your spend and loyalty! Although. Rather than collecting Avios, you could collect points in another loyalty program or with credit card spend you may get a cashback card. So there is an opportunity cost for all your point collecting. To view some of the top cashback credit cards check out Money Saving Expert’s guide here – https://www.moneysavingexpert.com/credit-cards/best-credit-card-rewards/

Working out your Avios point value will allow you to compare to other cards on the market. For example, if you end up valuing an Avios point at 1p, this is what your ‘cashback’ maybe on some popular cards…

Please note…

This is my experience using the points system and is not a recommendation of any financial product. There are other credit cards which can earn you travel points including IHG credit card, Tesco Credit Cards (by exchanging Clubcard points for avios, hotel stays and more) & Virgin Atlantic credit card. If you use my link for a referral to an American Express card upon you being accepted I will receive points, this varies between 9,000 – 18,000 depending on the card I refer you from

Get a referral for bonus points here – https://pointsuncovered.com/amex-referral-link-uk/

BA Free Card (no annual fee)

On the BA Free Card, you are getting 1% ‘back’ (1 Avios per £1) on general spend.

BA Premium Card (£195 annual fee)

On the BA Premium Card, you are getting 1.5% ‘back’ (1.5 Avios per £1) on general spend.

Gold Amex Gold (FREE first year, £140 annual fee afterwards)

On the Gold Amex Card, you are getting 1% ‘back’ (1 Membership reward point per £1) on general spend. Membership reward points transfer 1:1 into Avios.

Other things to note

Sign-up bonuses

If you are new to Amex you may be eligible for a sign-up bonus. (check here to read about the eligibility rules.) This can massively boost your earnings in your first year with the card. I’ve included a few examples below so you can see how lucrative they can be!

The BA Free Card comes with a 5,000 Avios welcome bonus if you spend £1000 in 3 months. To earn that normally on the card you’d need to spend £5000.

Where can I fly to for 5,000 Avios

The Premium BA Amex comes with a 25,000 Avios welcome bonus if you spend £3000 in 3 months. To put that into context you’d need to spend over £16,500 on that card to get that many Avios points!

Where can I fly to for 25,000 Avios

The Gold Amex Card comes with a 10,000 membership reward points (equal to 10,000 Avios) welcome bonus. You would need to spend £10,000 to earn those points on general spend!

Where can I fly to for 10,000 Amex points

Annual fees

Some American Express cards have annual fees. Whether or not these represent good value to you is down to your personal preference/spending. The ones that have annual fees tend to have higher sign-up bonuses, increased earn-rates and other benefits. It’s worth noting that Amex annual fees are pro-rata refunded on cancellation. That means if you kept the BA Premium Card (annual fee £195) for 3 months you’d receive a refund of £146.25 which means your total outlay would be £48.75.

2-4-1 Vouchers on the BA Amex cards

The BA Companion voucher (earnt at 20K spend on the FREE BA Amex & 10K spend on the Premium BA Amex) in effect ‘doubles the value of your Avios.’ Why? They are basically 2-4-1 vouchers to use on Avios redemptions. This allows you to get 2 tickets for the price of one in Avios, the cash element of ‘taxes and charges’ would still be due for both tickets.

Different earn rates

Different cards earn different rates on different things! For example, the Premium BA Amex earns 3 points per £1 on British Airways or BA Holidays spend rather than 1.5 points. The Gold Card earns 2 points per £1 on airline purchases rather than 1 point. Make sure you know how much you are likely to spend and on what to get an accurate idea of your earnings!

Avios Point Value Examples

Below I’ve included some examples to help you work out what your Avios may be worth to you.

It’s worth noting that Avios tickets have cancellation flexibility which cash tickets do not generally have. They do, however, lose out on the Avios and tier points you would earn from a cash fare.

Remember…you shouldn’t value Avios by the BA fare but rather the airline/travel class/price you would take if you didn’t have them.

You are likely to get a better return on your Avios booking in peak periods (e.g. summer holidays) as Avios fares are fixed off-peak/peak and don’t fluctuate like cash.

All the examples use London Heathrow as the starting airport unless otherwise stated.

Normally fly short-haul with budget airlines.

If you would typically fly with a budget airline (without all the extras) the return you get from Avios is likely to be a lot lower. A return flight to Ibiza in August with Ryanair is £108. (similar flights with BA would cost £160.) Avios cost is 15,000 + £35. If we take £35 from the £108 = 73 then divide that by the Avios cost of 15,000 = 0.0049 (roughly.) That means here you will only be getting just under 0.5p (half a penny!) value per point.

Normally fly short-haul with BA.

If you would normally fly in Europe with BA you can get a decent return on your Avios thanks to Reward Flight Saver. With BA’s reward flight saver scheme, the taxes and fees on short-haul are capped at £35 return in economy class and £50 return in business class per person. You’re eligible as long as you’ve collected at least one Avios in the past 12 months. Let’s look at 3 examples…

a) A return economy flight to Paphos in August with British Airways is £524.09. Avios cost is 20,000 + £35. If we take the £35 from £524.09 = £489.09 then divide that by the Avios cost of 20,000 = 0.0245 (roughly.) That’s almost 2.5p a point!

a) A return business class flight to Venice in July with British Airways is £466.57. Avios cost is 30,000 + £50. If we take the £50 from £466.57 = £416.57 then divide that by the Avios cost of 30,000 = 0.0134 (roughly). That means a return of about 1.3p a point!

c) I like flying from London City Airport as the location is very convenient to where I live + you don’t need to get there hours early! The only problem is cash fares can be expensive, luckily Avios pricing is the same here as from any other London airport! I wouldn’t bother with Business Class here as there is no free lounge nor a separate empty seat in the middle as the aircraft are 2 x 2.

A return economy flight to Prague in May from London City with British Airways is £171.73. Avios cost is 8,000 + £35. If we take the £25 from £171.73 = £136.73 then divide that by the Avios cost of 8,000 = 0.017 (roughly.) This gives a return of 1.7p a point.

Normally fly long-haul in economy.

This rarely makes sense to use Avios, whether you typically travel with a budget airline or BA. The ‘taxes & charges’ on long-haul economy Avios tickets wipe out the majority of any potential saving. A return to New York in June with British Airways is £322 and £283 with Norwegian. Avios cost is 55,000 + £100. If we take £100 from £322 (BA) = £222 then divide that by the Avios cost of 55,000 = 0.004 (roughly). That means here you will only be getting 0.4p value per point… very poor! If we repeat this by taking £100 from £283 (Norwegian) = 183 then divide that by the Avios cost of 55,000 = 0.0033 (roughly.) Here you’d be getting an even worse 0.33p (a third of penny!) value per point.

Normally fly long-haul in business.

This is typically where a lot of people will find themselves redeeming their Avios (and the 2-4-1 voucher section below.) This is because long-haul business class is seen as the sweet spot for redemptions. Nobody wants to be cramped for 8 hours + right? A return business class flight to Cancun in August with British Airways is £2071. Avios cost is 150,000 + £549.97. If we take the £549.97 from £2071 = £1,521.03 then divide that by the Avios cost of 150,000 = 0.0101 (roughly.) This gives a return of a touch over 1p per point.

You earn a 2-4-1 voucher.

Remember when booking with a BA companion voucher (2-4-1) you are basically doubling the value of your Avios. It can make a bad deal less ‘bad’ but the best value from these comes on long-haul business class or first-class tickets. For example, a return ticket for 2 people in business from London – Dubai in June with British Airways is £3,846.10. Avios cost is 110,000 + £552.04 per ticket. As we have a 2-4-1 voucher we only need one lot of 110,000 Avios but still need to pay x2 of the ‘taxes and fees.’ If we take £552.02 X 2 from 3,846.10 = 2,742.06 then divide that by the Avios cost of 110,000 (with 2-4-1 voucher) = 0.025 (roughly.) This means you’d be getting a very respectable 2.5p per point.

Last-minute travel.

If you need/want to travel last-minute for a holiday, work or personal reasons Avios can be very valuable. For example, a return ticket for 1 person in economy from London – Malaga in a few days time costs £340.34, Avios cost is 13000 + £ 35.00. If we take £35 from the £340.34 = 305.34 then divide that by the Avios cost of 13000 = 0.0235 (roughly.) That means in this situation we will get 2.35p worth of value per point. Remember it’s possible to do better (or worse) than this depending on when and where you are travelling to.

Remember if you are making an aspirational booking (one you would never normally pay for) don’t worry about the pence per point so much! Just enjoy your business/first-class flights knowing you paid very little compared to the cash fare!

Prices can change fluctuate from day to day so make sure you do up to date calculations on any route you are thinking of taking.

Conclusion

As you can see Avios point value is purely a personal one! Whilst they have a minimum-floor value of around 0.5p when used for non-flight redemptions via ba.com such as wine, travel ‘experiences’ or hotels. It is quite easy to get over 1p of value per point depending on how you use them.

If you are looking to kick-start your Avios with a huge 200,000 haul don’t forget to take a look at our guide to fast track yourself to a rather cool 200,000 Avios points – https://pointsuncovered.com/american-express/fast-track-yourself-to-2000000-avios-points/