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Perceived Value of Avios in Current Climate (March 2020)

Perceived Value of Avios in Current Climate (March 2020)

Old Mar 18, 20, 7:57 am
  #1  
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Perceived Value of Avios in Current Climate (March 2020)

So - the stock markets give a clear though brutal assessment of the value of IAG in terms of its share price. I thought it might be interesting to try to quantify our confidence in BAEC via its currency, the Avios.

There are often discussions about what Avios are "worth", and although opinions and circumstances vary, a ball-park figure of about 1p is usually the consensus. Indeed, BA currently has a 50% bonus offer allowing you to buy Avios at about that price, though I can't imagine they are selling many.

How has your perception of their value changed in the last few weeks?

e.g. If you would have paid £100 for 10k Avios six months ago, what would you pay today?
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Old Mar 18, 20, 8:12 am
  #2  
 
Join Date: Dec 2017
Location: Stockholm, Sweden.
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Originally Posted by fruitcage View Post
So - the stock markets give a clear though brutal assessment of the value of IAG in terms of its share price. I thought it might be interesting to try to quantify our confidence in BAEC via its currency, the Avios.

There are often discussions about what Avios are "worth", and although opinions and circumstances vary, a ball-park figure of about 1p is usually the consensus. Indeed, BA currently has a 50% bonus offer allowing you to buy Avios at about that price, though I can't imagine they are selling many.

How has your perception of their value changed in the last few weeks?

e.g. If you would have paid £100 for 10k Avios six months ago, what would you pay today?
It is a difficult subject for obvious reasons because of the lack of revenue amongst airlines at the moment, obviously raises concerns about hoarding large amounts.
However, there are two ways people often value avios.
1) value saved if they had bought the ticket through cash (but wouldn't have).
2) theoretical spending that they would be willing to spend and could use avios for.

A key factor at the moment is about availability.
Due to the circumstances, there have been many options for redemptions and this in my opinion increases their value.
My view at the moment is that short haul redemptions are good value and longhaul aren't - I would typically work out the difference before booking, noting that google flights won't include baggage prices. But everyone's circumstances are different.

I buy miles with virgin at 0.71p so I guess that's the figure I would look at with BA (I have to dream on). Unless there was a specific redemption I knew I could save. But redemptions also have value in terms of cancellations that people often forget about.

Last edited by RollAnotherFatOne; Mar 18, 20 at 8:17 am
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Old Mar 18, 20, 8:32 am
  #3  
 
Join Date: Feb 2004
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Somewhere along the line they went from a reward scheme to a profit centre with their own CEO at IAG.

If I don't need flexibility to cancel then I have found it makes more sense to buy discounted I and A Fares for leisure travel and hence have accumulated a lot of Avios when I expected to burn them down, which was not the case 15 years ago (when they might well have been BA Miles).

For me they are worth about £3-400/7500Avios on the routes that I spend them on with the flexibility to cancel and have hold luggage.

I would caution against giving them a monetary value in the current climate tbh.
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Old Mar 18, 20, 8:34 am
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Join Date: Nov 2016
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I can tell you the value from my personal POV (in this current climate). I can currently book a rewards flight from Rio to London on 23 March for 19500 Avios + $ 27.76. The same price in cash would be $556. So, amazing value.
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Old Mar 18, 20, 8:42 am
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Valued on a liquidity basis my Avios are worth zero to me. i.e. Iím at home and thereís nowhere I want to or am able to go to within an undefined period of time.

So to your original point, a lot like the markets right now, where the price on the screen is no indication whatsoever that you will be able to transact at that price.
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Old Mar 18, 20, 8:45 am
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Because of the BA fuel surcharge, I would value Avios points much less. Did a dummy booking for a SFO-LHR R/T for end of November in J, and they still were charging $1,645 for the privilege of burning 120k points. With oil down below $30/barrel, I don't see how BA can continue to charge that over inflated fuel surcharges. What gives?
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Old Mar 18, 20, 8:48 am
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Join Date: Oct 2008
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Current value? Close to zero. You can't book anything with them with confidence that you'll actually fly what you've booked, and should there be issues with BA as an ongoing concern, the value of them as per T&Cs are nothing. The reality of the situation in due course might well be much rosier than all that, but who knows..
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London_traveller is offline  
Old Mar 18, 20, 9:48 am
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I am sitting on a mid six figure amount and right now I value them fairly low because there is no place I want to go/can go and as noted the future of most airlines is pretty unclear at the moment. I am hoping at some point (no pun) there might be some deals or good award availability and I'll have the desire to travel then. That said right now I am more worried about my balances with VS, CX and KE.
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Old Mar 18, 20, 9:56 am
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Join Date: Feb 2015
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BA could easily decide to write off or significantly devalue all our Avios piggy banks, whilst emerging as a new stream lined operator under a different name...

How about Great British Airways as per the TV comedy "Come Fly with Me"...??

Chris
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Old Mar 18, 20, 10:14 am
  #10  
 
Join Date: Feb 2018
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Originally Posted by Chris_G View Post
BA could easily decide to write off or significantly devalue all our Avios piggy banks, whilst emerging as a new stream lined operator under a different name...

How about Great British Airways as per the TV comedy "Come Fly with Me"...??

Chris
Or British Airlines.... Maybe there is more to Mr Cruz's slip up!
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Old Mar 18, 20, 10:22 am
  #11  
 
Join Date: Aug 2006
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Originally Posted by toadman View Post
Because of the BA fuel surcharge, I would value Avios points much less. Did a dummy booking for a SFO-LHR R/T for end of November in J, and they still were charging $1,645 for the privilege of burning 120k points. With oil down below $30/barrel, I don't see how BA can continue to charge that over inflated fuel surcharges. What gives?
Wow, was just about to look up a similar trip, but this post saved me the trouble! One of the main advantages of Avios is the ability to cancel with minimal cost, but with the policy of zero cancellation/change fees for current bookings, this goes away.
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Old Mar 18, 20, 10:40 am
  #12  
 
Join Date: Feb 2019
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Exchanging Avios for wine

The cost of the various wine and spirit packages have increased by 10% since yesterday

I ordered one of the Ardbeg whisky for 9500 avios yesterday

Today it's 10400

Everything else seems to have increased accordingly

Probably going to end up pulling that deal soon
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Old Mar 18, 20, 11:20 am
  #13  
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Value = Zero.

However, useful occasionally for a 2-4-1 and abating flight costs. HHA 350k, which we might be able to use in2021.
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Old Mar 18, 20, 11:37 am
  #14  
 
Join Date: Nov 2008
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Like my investments and pension funds, I'm taking a long term view on this one. I'm in my early 40s so a long time to go before I think about retiring and my view of the value of my Avios hasn't really changed. I'm happy to sit on them for the time being and expect to get >1p per Avios when the time to redeem them does come.
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Old Mar 18, 20, 11:48 am
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Join Date: Feb 2009
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My goal is to keep the balance as small as possible, earn and burn is the name of the game. I view avios ( or any reward points scheme) as a very transitory currency that can be devalued at any time. So I consider them to have essentially zero future value, the question of "what are they worth" is what can I buy with them today?

The joke on the AC forum is points are only good for buying toasters, after the scheme was expanded to various non flight things that could be purchased and considering the very limited flight availability.
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