There are often situations where it makes sense for consumers to buy points, and it’s also quite a lucrative business for airline loyalty programs. British Airways Executive Club and Iberia Plus often have promotions on buying Avios (the points currency of IAG airlines), though the pricing will soon be changing. This change is good news for some and bad news for others.
In this post:
The cost to buy Avios is changing as of May 2023
As of May 1, 2023, British Airways Executive Club and Iberia Plus are adjusting the cost to purchase Avios. Before I share the exact details, there are a couple of important points to understand:
- The cost to purchase Avios isn’t linear, and the more Avios you buy, the lower the cost per point
- The cost to purchase Avios depends on where your account is registered, and pricing is vastly different depending on whether it’s registered in the United Kingdom, United States, or European Union
With that in mind, British Airways and Iberia have unveiled Avios pricing changes, and it’s good news for those in the United States, and bad news for those in the United Kingdom and European Union.
Below you can see the before and after pricing for purchasing Avios.
As you can see, the cost to purchase Avios is increasing significantly for those in the United Kingdom and European Union, while it’s decreasing significantly for those in the United States. To compare the before and after cost of purchasing 200,000 Avios:
- Accounts registered in the United Kingdom would currently pay £3,215, and will soon pay £3,539, representing a 10% increase
- Accounts registered in the European Union would currently pay €3,601, and will soon pay €4,245, representing an 18% increase
- Accounts registered in the United States would currently pay $5,523, and will soon pay $4,599, representing a 17% decrease
Just to further clarify, generally it’s not worth buying Avios without a bonus. However, we frequently see British Airways Executive Club and Iberia Plus sell Avios with a 50% bonus, and in those cases buying Avios could make a lot of sense, with the right use in mind.
My take on Avios pricing changes
British Airways Executive Club and Iberia Plus are essentially eliminating the massive pricing disparity that currently exists depending on where your account is registered.
Those in the United States have always been at a disadvantage when it comes to buying Avios. Let me be clear — that’s hardly worth complaining about, since we’re privileged with the best points earning opportunities in the world, and there are so many ways to earn Avios here.
At the same time, I think this change is probably pretty smart. I know that buying Avios has been incredibly popular among many in the United Kingdom, while I can’t imagine many people in the United States buy Avios.
I think this pricing changes will help the programs maximize profitability. I’m sure many in the United Kingdom will still see value with buying Avios, while I think with the new pricing, British Airways and Iberia might see an uptick in people buying Avios in the United States.
Bottom line
As of May 2023, British Airways Executive Club and Iberia Plus will be changing the cost to buy Avios. The cost to buy Avios will be increasing for those in the United Kingdom and European Union, while the cost will be decreasing for those in the United States.
It has always been unusual how British Airways and Iberia have had different pricing for buying Avios depending on where your account is registered, so these changes help address that. With these changes, I imagine British Airways and Iberia may see more people in the United States buying Avios.
What do you make of these adjustments to Avios pricing?
Totally agree on credit card bonuses being better in the US. Have to buy points for travel on basically anything but AC.
AMEX Gold in Canada top reward is 3 points per dollar while in US is upwards of 5
AMEX Gold in Canada only transfers to AC, AVIOS, Asia Miles at 1:1 and only has 5 Airline partners.
Only AMEX card that gives other airline points is Bonvoy.
There as an AS Mastercard that...
Totally agree on credit card bonuses being better in the US. Have to buy points for travel on basically anything but AC.
AMEX Gold in Canada top reward is 3 points per dollar while in US is upwards of 5
AMEX Gold in Canada only transfers to AC, AVIOS, Asia Miles at 1:1 and only has 5 Airline partners.
Only AMEX card that gives other airline points is Bonvoy.
There as an AS Mastercard that was MBNA that will probably go away as it was sold to Royal Bank.
Signup bonuses are very low.
I like the change in the right direction but the UK cost is still 85 quid cheaper and the Euro cost is almost 25 Euro cheaper for the 100,000 Avios at today's exchange rate
GBP USD EuRO
1,858 $2315 2,107
These changes go some way towards levelling up prices between the 3 currencies the Avios program uses. It takes into some account the longer term exchange rate trends between those currencies. Of course this may all change in reality if one currency (say the US dollar) reverses course if the US slips into a recession, or the GB pound or Euro tank, which is quite possible in the foreseeable future.
Not adressed is the...
These changes go some way towards levelling up prices between the 3 currencies the Avios program uses. It takes into some account the longer term exchange rate trends between those currencies. Of course this may all change in reality if one currency (say the US dollar) reverses course if the US slips into a recession, or the GB pound or Euro tank, which is quite possible in the foreseeable future.
Not adressed is the fact that the rest of the world outside of their 3 currency zones are by default forced to use $US; still the most expensive way to buy, on top of the conversion rate from one's local currency to the $US.
So, for 'The Rest of the World' still not worth buying even with a 50% bonus bone thrown out occassionally.
Pricing is closer, but still favors the UK. At current mid market rate, $4,599 is £3,687.25, so you get a little more than 4% discount in pounds.
Euro buyers are getting the shaft as $4,599 is currently €4,165.36, so they are now paying more than Americans.
Even with their best 50% bonus, this puts the cost per point slightly over 1.5 cents each, and I don't see much value in the program beyond that (maybe...
Pricing is closer, but still favors the UK. At current mid market rate, $4,599 is £3,687.25, so you get a little more than 4% discount in pounds.
Euro buyers are getting the shaft as $4,599 is currently €4,165.36, so they are now paying more than Americans.
Even with their best 50% bonus, this puts the cost per point slightly over 1.5 cents each, and I don't see much value in the program beyond that (maybe a couple sweet spots, but hard to get much benefit compared to other programs).
Ben - I would slightly disagree with your assessment of the best points earning opportunities being in the USA.
Here in India, we have cards which are giving away close to 25k miles on achieving spends of approx usd 1200, with a base earning ratio of 4.8% combined with milestone benefits.
exactly, 25k miles is pretty bad..
This is on regular spends. Not with sign up bonuses.
Americans routinely earn 100k+ with every airline and hotel program you can imagine. Often also comes with other benefits like top tier status, statement credits, free night certificates etc. and no shortage of different cards to rotate through.
25k sounds worse than offers we get in Canada.
Vistara gives 4 business class (first in the US) tickets on valid on all flights within india on roughly $9k in spends plus gold status on one of their Co-brand cards. This is without counting the miles you accrue on those spends.
Also conversion of points to miles ratios in India are not 1:1, especially Amex is 4:1 for Avios.
Sorry 2:1 for Amex. Some Axis Edge rewards are the ones with bad ratios like 20:1 or 10:1
Axis rewards transfer ratios are 5:4 on their premium cards. In fact - if you check the earnings for Axis Magnus - the base earnings on that card for $1250 in spends is 6000 points plus 25000 for hitting the milestone of $1250 in spends.
At 5:4 ratio - that’s 24800 miles. Not counting any bonus points that one can earn through axis’s accelerated rewards portals - which include 5x on travel bookings and up to 10x on shopping vouchers.
Just as an example - they have 10x on vouchers for Yatra (a travel portal in india).
15000 rupees ($190 USD) in vouchers purchased get me 11250 axis edge points (equal to 9k miles at 5:4) on the axis reserve credit card. These points are transferable to over 15 partners including Aeroplan and United plus approx 1500 in miles if I use them to travel on vistara.
I still have to hear about a...
Just as an example - they have 10x on vouchers for Yatra (a travel portal in india).
15000 rupees ($190 USD) in vouchers purchased get me 11250 axis edge points (equal to 9k miles at 5:4) on the axis reserve credit card. These points are transferable to over 15 partners including Aeroplan and United plus approx 1500 in miles if I use them to travel on vistara.
I still have to hear about a card or a way to do this in the USA where I’ll earn over 10000 redeemable miles for less than $200 in spends outside of special offers like the simplyMiles deal approx a year ago.
Wow that actually sounds pretty op can you tell me more
"we have cards which are giving away close to 25k miles"...lol...this is a horrible sign up bonus. If you think such a low sign up bonus makes India competitive with the US then you need to learn more about the opportunities in the US. I can't believe that you would use 25K as a good example when the average sign up bonus in the US is 60-75K, with many more than that. I got 150K...
"we have cards which are giving away close to 25k miles"...lol...this is a horrible sign up bonus. If you think such a low sign up bonus makes India competitive with the US then you need to learn more about the opportunities in the US. I can't believe that you would use 25K as a good example when the average sign up bonus in the US is 60-75K, with many more than that. I got 150K last year with my AMEX Platinum. By the way, what is the name of this card that you are so proud of?
@Trvlr2001 - I’m not talking about sign up bonuses. I’m talking about earnings on regular spends post sign up bonuses.
I’ve mentioned the names of the cards - Axis Magnus and Axis Reserve in my other replies above.
"...disagree with your assessment of the best points earning opportunities being in the USA." So you are saying that India has the best points earning opportunities on regular spend because of the Axis Magnus and Reserve cards? I went to the Axis website to review their points earning, annual fee, and application terms and conditions. They are good cards but definitely do not make India better than the US in points earning opportunities for its...
"...disagree with your assessment of the best points earning opportunities being in the USA." So you are saying that India has the best points earning opportunities on regular spend because of the Axis Magnus and Reserve cards? I went to the Axis website to review their points earning, annual fee, and application terms and conditions. They are good cards but definitely do not make India better than the US in points earning opportunities for its citizens. It's way better and easier in the US to make points. You did not want to include sign up bonuses, which makes a huge difference and is important to include in the comparison.
Most Indian citizens are not able to get those cards. According to Khatabook the average salary in India is $422/month. There is no way they can take advantage of the Axis cards, let alone getting approved for them. Whereas in the US almost everyone who has a job can get credit cards with great points earning possibilities. Americans can churn cards and MS, something the average Indian citizen can't possibly do.
Just read that all Axis cards are going through a major devaluation on May 5 2023, making the points earning abilities even less than today. Not to mention that they charge fees on International transactions, which most US cards don't charge.
"lol...this is a horrible sign up bonus."
LOL...Good job reading the comments you're responding to.
It can't be "a horrible sign up bonus" when it's not a sign up bonus.
India hahahaha