Avios, the loyalty program for British Airway and Iberia, is increasing some of their redemption fees effective October 8, 2012. And, believe it or not, they’re saving you more money than before. When I first saw the last part of that claim I was rather skeptical; turns out it is actually true.
The price increase is only on the cash portion of short-haul awards within Europe. These awards incur a fixed fee for taxes and such, making planning for redemptions much easier. And included in that flat-rate is the Airline Passenger Duty, the UK’s most egregious tax on airline customers. APD rates are going up so Avios costs are going up to. But Avios costs are actually increasing by less than the APD increase. SO you’re saving more money, even with the rate jump. They’ve got a chart on it and everything.
Fortunately the points costs are not changing and the total price difference is only £3 to £6 depending on the cabin you’re booked in. Overall, not such a bad deal.