Challenge. Australia with Avios.

One of my friends got in touch with me to ask how he could use his Avios to get to Australia from the UK.  Unless you’re a Gold Guest List (GGL) card holder, that’s very, very tough.

There are certain scenarios when it makes sense to redeem Avios for travel to Australia, but for most of the time, it’s not great value.

The odd occasions when it can make sense are:

  • You’re able to get redemption availability in First
  • You have a Gold Upgrade Voucher
  • You have an American Express 2 for 1 voucher

For two people, you’d be paying the single person cost for business class return.  However that’s still going to be 250,000 Avios and slightly under £1,500 in taxes, fees and charges.

Award availability in first (and business) on that route is like rocking horse manure, so realistically this type of award is only open to Gold Guest List members who are able to use their ‘joker’.  Even then at busy times another member may get there first, or alternatively there could be no ‘A’ class availability showing which is required to use the ‘joker’.

Given how poor the British Airways first and business class products are, I think it’s interesting that there’s such high demand.  My theory is that it’s more about the perception of value, than the actual reality once you crunch the numbers.

A few days ago I highlighted the latest sale fare from Qatar Airways from Europe to Australia, that was £1,650 return in business class starting in Copenhagen or Stockholm to Brisbane.

So lets dive into some maths and compare the most optimistic scenario for redeeming Avios I highlighted above, with the paid Qatar Airways business class fare.

In the red corner, we have Qatar Airways.  A return fare for two people will set you back around £3,300, plus lets allow £250 to get you to and from Stockholm (either easyJet or Avios).  That gives us a total of around £3,550 for two.  In addition, each person will earn over 26,000 Avios and 600 tier points each.  But I’m not going to include that in the calculation.

In the blue corner, we’re looking to spend 250,000 Avios, a GGL joker, an Amex 2 for 1, and a Gold Upgrade for two, plus £1,500 in taxes.  In my recent review, I believe that BA First and Qatar Business Class are equivalent.

Lets take the £3,550 spend with Qatar Airways and subtract off the £1,500 worth of taxes that we’d have to pay British Airways to use our Avios.  That leaves us with £2,050 of ‘value’ that we’re getting for our Avios.  Dividing that £2,050 by 250,000 Avios leaves us with 0.82p per Avios, so not great value.

So how should my friend spend their Avios?

Firstly, his parameters are slightly different as he’s only got around 140,000 Avios and it’s only him looking to travel so can be reasonably flexible with dates.

With that number of Avios, there’s two ways we can look at it – either book a one-way ticket, or get him somewhere in Asia, and then a separate ticket onwards to Australia with a different carrier.  Given one-way long-haul tickets are generally pretty expensive, I’m going to focus on a separate ticket from Asia to Australia.

A business class, off-peak redemption to Beijing is 130,000 Avios return, plus around £550 of taxes.  An onwards ticket from Beijing to Melbourne (in economy) is around £330 with Hainan airlines.  That’s a total of 130,000 Avios and £880.

Back to the Qatar sale fare of £1,650, adding on the positioning costs of £125 gives us a total spend of £1,775 to get to Australia.

Again, lets take that £1,775 Qatar Airways spend and subtract off the taxes and fees for the Avios redemption, and also the Hainan airways fare and that gives us just £895 of ‘value’ for our Avios.  Dividing that by the 130,000 Avios gives us 0.69p per Avios, even worse value.  Plus we’re only in a premium cabin for half of the journey.

In summary, using Avios to get to Australia is pretty poor value.  The other way of looking at it is the current sale fares that are available from the Nordics with airlines like Qatar Airways are great value.

So where should you use your Avios?  The most value can be had in European short-haul flights.

Let me give you a real-world example – my folks have a place in Austria and so I’d like to go back to visit them for Christmas.  Looking at BA.com flights to Salzburg are currently selling for £415 in economy return over the peak period I’d like to go.  Lufthansa flights connecting in Frankfurt are also over £300.

Of course, being peak period, there aren’t any Avios seats available.  For Gold Executive Club members, you can use double Avios and BA will give you a seat as long as they’re still selling them, but you need to book at least 30 days in advance.  This is known as a Gold Priority Reward.  That works out at a cost of 18,000 Avios plus £35 taxes for the return journey.

Doing the maths, compared to the indirect Lufthansa flights I’m getting 1.48p per Avios of value, or the more direct comparator, the non-stop BA flights, I’m getting 2.11p per Avios.

That’s almost three times the value for my Avios points for short-haul flights in Europe, at peak periods, than using them for long-haul flights to Australia.  In addition, my actual cash outlay is much lower as there’s only the Reward Flight Saver costs to pay.

 

 

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