Definitely go with Avios, we used them for all of our domestic Australia and SYD-AKL travel for our trip next week. In some cases Avios are cheaper than AA and it's only a nominal amount of airport taxes.

But sometimes you do have to search segment by segment, especially if you're getting that error even with a known valid route. Once I kept getting the error for some segment, but on the exact reverse of the route it went through fine. Just BA.com "quirks"