Lizie

Now the feeding frenzy has settled down a little and we wait for the promised 90,000 avios to land in our Iberia.com accounts, I've been pondering what to spend them on.

A good option seems to be sending them over to BA's executive club as there are more redemption opportunities, but Iberia have said this would leave the account with a negative balance. I read that as owing Iberia 90,000 avios. Simple answer would be to just to close the account once transferred out but Iberia has better tax breaks then BA plus they may come up with more good offers in the future (remember the Avis 18,000 award a few years back?). Neither do I know how many jumped in to this offer but find it difficult to believe we are all going to be able to find award availability on Iberia.com by December 1st. Either way I don't want to be provided with a bill for 90,000 points.

What are other people's thoughts; redemption or transfer?'

jamesgbbc

I would worry about transferring to BA and leaving Iberia with a -90,000 balance.

Don't forget, both BA Avios and Iberia Avios are due to merge under one platform later this year, so whatever hole you create now will be realized down the line!

Lizie

Thank you! I didn't know Iberia and BA were merging. Thought it was just avios.com and BA.

bisonrav

Just posted this over at HfP, it's relevant to this thread too I think

Group psychology is fascinating – we’re seeing the situation now where people are seeing other people apparently get something and are piling in to try and get the same or more, “signing up the dog” to an account. Also I think known as the “widows and orphans” phase where caution goes to the wind and everyone jumps onboard. What is happening now is that people are starting to ignore the “website bookings only” part of the T&C and the regional restrictions, and the fact that new accounts don’t really have an IB number for 72 hours, and going in for multiple accounts which starts multiplying up the 28 euros into quite large amounts of money. Voices suggesting a measured and cautious approach are shouted down too.

What will happen next? Not good for the consumers one way or another. Scenario 1 is that IB had a masterplan to limit exposure, and that will cut in. Most likely this is around some form of redemption restriction, strict transfer controls, or devaluation (or combination of the three).

Scenario 2 is that this was marketing driven, and the rest of the business leadership is on a weekend. Marketing departments may be patting themselves on the back at going massively viral and the sales numbers shooting skywards, but in the cold light of Monday morning when the Finance team gets in I would expect a few crisis meetings. In this scenario, there are essentially 10 days to limit damage. This will be a hastily constructed version of (1), but the following considerations are true:

1) PR damage is less damaging than balance sheet damage. There is the potential for this to have a serious balance sheet impact (I think the numbers in the article are probably underestimated). That conditions the way Iberia would approach the issues.

2) The first thing that will be looked at is strict T&C – Amazingly Iberia didn’t insert an “abuse” clause in the T&C and in fact were at pains to encourage “abuse” (multiple purchases without an intention to travel), so this will be difficult, but the most obvious clause is the “must use by Dec 1” and to prohibit transfer outside (or make the points dissolve if transferred). They have 10 days to create an IT solution to this problem but it’s a one line of code job to prohibit all transfers for a while to buy a little time.

3) Other T&C that can be applied are “website bookings only” and “must have a valid IB number at time of booking”. The latter may exclude a lot of pets.

Note that the value of the Avios is effectively reduced by restricting redemptions, and the “destroyed” avios on 1st December (conveniently within the second half of the financial year) is refunded from the Avios group, thereby disappearing from the balance sheet. Avios redemptions are intrinsically limited anyway, so if it is impossible to use these elsewhere, it’s a nice sleight of hand to boost the first half results using leprechaun gold.

In either scenario, consumers aren’t getting what they might expect from 90,000 avios. Money only has value if you can spend it. Personally I think the speed of the reassurances on Friday evening tends to confirm the belief that there is some risk management behind it, i.e. we are in scenario (1) rather than (2) but it’s controlled.

I don’t want to be a killjoy voice of doom, and I have skin in the game as I’ve taken a few flights on – albeit not the cheaper ones, I’m doing a few round trips to Madrid and a little tour via Seville for a weekend. But I’ve seen these feeding frenzies before and they rarely end up well.

dilvala

Could it possible be that this promo has something to do with the two programs merging? The December 1st deadline seem to indicate that they may want to award and burn the avios before merger. Obviously I'm speculating and I have no data to back it up.

bisonrav

There is probably a lot of game theory now in how to use the avios if they appear, but:

- It's in the interest of anyone thinking of staying inside IB to persuade other people to transfer their Avios, as this reduces competition for redemptions. Bear this in mind when seeking advice

- Transferring avios out en-masse increases competition for BA avios redemptions and may just shift the problem sideways, particularly if the accounts merge or the avios expire. The only reason for considering doing this is to bank the Avios somewhere where they may not expire. But they might expire anyway via a merging of a negative balance.

- New accounts (there are a lot of these) have a three month restriction on transfers as far as I know.

Interesting dilemmas. For what it's worth, and given I may be trying to influence others to my advantage because I'm inside the game, I'll be looking to keep any avios from this promo within IB for the time being.

LupineChemist

Is there more info about the programs merging? I had heard rumors but never saw anything concrete.

Exleftseat

I am thinking ( against all wisdom ) to participate in this "deal". The aim is to get a biz r/t from PHX to FRA. Since I couldn't find any award charts on the IB website,
I was able to find it on Avios.com. It states that I would need 28,190 Avios per r/t in flexible business. Can this be? Sounds too good to be true. It would mean that
if I went through and did this for me and Mrs. EX we would have 6 r/t for a total of $ 600.00 by having 90,000 Avios in our IB account. There must be a catch. Not
just regarding availability, no? Since I have absolutely no experience with Avios can someone please chime in and help me out here?

cruisr

RVH85

Where in the T&C does it say "website bookings only"?

bisonrav

"Special offer of an extra 9,000 Avios for each ticket purchased between 21 and 24 June 2018 (maximum of 90,000 promotional Avios per member) on iberia.com for a flight operated by Iberia, Iberia Express or Air Nostrum. "

I was paraphrasing, but the condition is there.

Exleftseat

Thanks a million. That makes much more sense. Any chance you could enlighten me how you found this number? 62,500 avios?

cruisr

Exleftseat

Again, thank you so much. I am getting a better picture. I think you are right there will be a booking frenzy if this deal does indeed work.
I saw that JL could be booked as well with Avios, so I am changing my search to FRA-NRT and having checked the BA chart, I should
be o.k. with 90,000 Avios each for a one way C ticket. Don't think that routing will be of interest for most of the folks participating in this deal.

RVH85

Ah ok misread you there, thought it said somewhere that award bookings had to be website only