Cash & Avios Analysis

This blog contains links to our affiliates. Below are credit card products that we recommend from our advertising partners.

When you get to the payment page of booking an award with British Airways Avios, you’re offered a rare proposition in the world of frequent flyer miles:

  • pay the stated amount of Avios + taxes and fuel surcharges
  • pay 50-90% of the stated amount of Avios + taxes, fuel surcharges, and an extra cash co-pay.

This extra-cash-plus-Avios option is one to consider in advance, so I’ll do the work, so you can do the travel.

What’s your best play?

I tried to price out the 12 oneworld partners in different cabins on domestic and international routes.

For some routes, no Cash & Avios option is offered. In that case, the price is listed like this.

Flights on Japan Airlines, Cathay Pacific, and S7 didn’t offer a Cash & Avios option.

The other nine oneworld partners’ flights did offer Cash & Avios options. When offered, the menu looks like this with six options from 100% to 50% of the normal Avios price.

I’m comparing only the top and bottom–100% Avios and 50% Avios prices–because while there is a slight variation in the prices of each tranche, it doesn’t factor into the analysis much.

Conceptually I think of the top line as the price of the award, in the example above 40k Avios + $677, which is mostly fuel surcharges. The bottom price is 20k Avios + $937. That means I could save 20k Avios by paying $260 more. Saving 20k Avios by paying $260 more is like buying 20k Avios for $260, 1.3 cents each.

The question becomes: would I “buy” the Avios at the price offered by the Cash & Avios “price”?

That price varies greatly. There seem to be three points around which it groups: 1.3, 1.92, and 2.56 cents. The lowest price is mainly offered on economy awards. The middle price is mainly offered on first class awards. The most expensive price is mainly offered on business class awards.

My stated value for Avios is 1.7 cents, so I certainly wouldn’t buy Avios for 1.92 cents each or more. That means I never take advantage of the Cash & Avios option when the required out-of-pocket component to save Avios is that expensive.

I have, in the past, used the minimum Avios required (“bought 50%”) when offered the chance at 1.3 cents. I do not think this is automatic. I would never buy at the 1.9+ cent prices, but I wouldn’t always buy at 1.3 cents. I would only buy at 1.3 cents if I didn’t have many Avios and wanted to conserve the ones I did have.

The decision depends on a lot of idiosyncratic factors like one’s value of Avios, how much money one has at the time, how many Avios one has at the time, how often one uses Avios, what other prospects one has to get Avios and more.

Since a lot of my favorite redemptions involve Avios, I want to keep 100k+ on hand. If a redemption will take me under 100k and on that redemption, I’m offered the chance to save Avios by paying 1.3 cents per Avios, I’ll take the offer.

Your decision may be different.

Have you seen similar prices with Cash & Avios awards? Under what circumstances, do you take advantage of the Cash & Avios option?

Raw Data with Outliers Bolded

 

airberlin International Economy: 1.28 cents per Avios

LAN Domestic Economy: 1.28 cents per Avios

American Airlines International Economy: 1.29 cents per Avios

British Airways International Economy: 1.3 cents per Avios

Iberia International Economy: 1.3 cents per Avios

Malaysia Airlines International Economy: 1.3 cents per Avios

Royal Jordanian International Economy: 1.3 cents per Avios

Royal Jordanian International Business: 1.3 cents per Avios

Qantas Domestic Economy: 1.3 cents per Avios

Qantas Domestic Business: 1.3 cents per Avios

Malaysia International First: 1.92 cents per Avios

American Airlines International First: 1.92 cents per Avios

British Airways International First: 1.93 cents per Avios

LAN International Business: 2.56 cents per Avios

airberlin International Business: 2.56 cents per Avios

American Airlines International Business: 2.57 cents per Avios

Malaysia International Business: 2.575 cents per Avios

Iberia International Business: 2.575 cents per Avios

British Airways International Business: 2.575 cents per Avios

S7 Domestic Business: Cash & Avios not offered

S7 International Economy: Cash & Avios not offered

JAL International First: Cash & Avios not available

Cathay Pacific International Business: Cash & Avios not offered

Cathay Pacific International First: Cash & Avios not offered

19 Responses to Cash & Avios Analysis

  1. The cash and miles price are much more variable (and much higher), especially if you’re looking at BA CW/F awards.
    I’ve also seen AB J at 1 cpm. Hm… maybe they raised the prices. :(

  2. Great analysis Scott. I try to book the 4500, 7500, and 10000 Avios levels for flights, so I often use 100% Avios, but it would really depend on the prices and my mood at the time of booking.

  3. Thanks for effort you put in for this analysis!

  4. How do you consistently try to always have at least 100k avios at a time?
    Close the credit card the 1st year and reapply 2 years later for big bonuses?
    Put a routine amount of spend on it?
    or transfer into from other CC bonuses?
    Just curious. I haven’t used my Avios yet but don’t really see a good way to keep up the points. Sounds like you have good experience and that’s why I’m curious what you do.
    Thanks

    • I use transfer bonuses from Membership Rewards speculatively.

      • How do you get to this Avios page? I have 67k in Avios and when I try and find out ways to spend the miles it just takes me to this ‘Exporer Map’ that only shows destinations in the UK…

  5. Why would you EVER consider flights with fuel surcharges?!

  6. I have 205000 points, and thinking of taking CX lax to hkg first and hkg to BOM business. Short about 60000 miles, is it better to buy miles with the 30% bonus or use the cash plus miles option. It does show the option of cash plus miles for CX flight

    • Simple math problem. I don’t have the numbers, but you do. Add up the total cost under each method and choose the cheaper one.

  7. Pingback: First Look at the British Airways A380 in First Class, Business Class, Premium Economy, and Economy | milevalue.com

  8. Pingback: When Does British Airways Add Fuel Surcharges to Avios Awards? | milevalue.com

  9. If I book a Cash & Avios award and cancel it, do I get refunded the money spent on Avios or do I get to keep the points?

  10. If you use cash and avios do you earn avios while flying?
    Also remember to put in the calculaton miles earned for the cash – it may not be lots, but its still 2.5 (on Avios card) x the increase in cash price – could be 750 miles or more in a lot of cases.

  11. Pingback: TAM Joining Oneworld Means Flights to Brazil for 4,000 Avios and $97 | milevalue.com

  12. Pingback: British Airways Cash & Avios Option Quietly Got Much Better! (Now As Cheap As 1.1 Cents per Avios) | milevalue.com

  13. If I book a Cash & Avios award and cancel it, do I get refunded the money spent on Avios? Wonder how cancellations work compared to an all Avios award.

  14. Seems like CX is actually allowing cash+avios bookings. Just did a HKG-PVG search and this is what I get: http://i.imgur.com/OLADgrs.png

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>