Abundance of Avios not always enough

By Helen Fowler

If you apply for an Avios rewards credit card in the hope of getting free flights, you may be in for a nasty surprise. Both British Airways (BA) and Virgin Atlantic impose hefty charges -- payable in money, not miles -- when you redeem your miles for flights.

BA has been quietly levying fuel surcharges for years. Virgin Atlantic followed suit in 2013, adding a charge to flights purchased with its Flying Club miles between London Heathrow, Aberdeen and Edinburgh.

"We introduced a charge for short haul redemptions so we are in line with other airlines," said a Virgin spokesperson. Unlike BA, however, Virgin does not charge for its international flights and has no plans to do so. 

What are these charges for, and why don't Avios cover them?
For a typical BA London-New York return flight, in addition to about 40,000 Avios, you'll pay more than £355 in extra charges, according to figures provided by BA.

"Government taxes, as well as airport fees and taxes, are collected from BA by the relevant authority," says a BA spokesperson. "As a result, it is not possible to allow customers to pay for these using Avios."

Avios rewards: Worth the surcharge?

Sidebar: Firsthand account: Free holiday with Avios is proverbial free lunch. Our reporter finds booking with BA rewards to be more expensive than cash.

Breakdown of government and airport charges
Air passenger duty
Passenger service charge
Customs user fee (USA)
Transportation tax (USA) -- departure and arrival     
Animal and plant health user fee
Immigration user fee
Passenger civil aviation security service fee
Passenger facility charge
Total outside fees

That £142.45 is only 40% of the total fees levied. BA sets the rest of the charges.

"Carrier-imposed charges -- made up largely of fuel [charges] -- are set by British Airways and are, again, determined by the distance and destination," says a BA spokesperson.

On some of its shorter flights, BA allows customers to pay a reward-flight saver fee, which covers the taxes, fees and carrier charges. You pay with Avios, plus a flat £35 return fee in economy class. In business class, that fee jumps to £50.

And other airlines are no exception. A flight with Malaysia Airlines from London to Auckland in December would not just set you back a staggering 240,000 Avios, but you'll have to fork out £737 in charges, too.

Booking a hotel with Avios
If you are disillusioned with trying to use Avios for flights, maybe you are interested in using them to stay in hotels. You can choose to use only Avios with the BA Executive Club if you have enough points. But if you don't have enough, you can choose how much of your stay you wish to pay in cash  and how much in Avios. The fewer points you use, the more you pay in cash, and vice versa.

If you have enough Avios to book your room, you may save some money there. But using the part-Avios-part-money  method, you may end up paying just as much, or almost as much, as you would to book the room outright.

For example, a night at a three-star hotel in Paris in August will cost any of the following:  18,950 Avios + £30.00; 14,200 Avios + £55.00; 10,650 Avios + £75.00; 5,950 Avios + £105.00; or 2,350 Avios + £125.00.

Booked directly, a double room in the same hotel costs £119 for the night.

Weigh surcharges into card offerings
Have these surcharges on flights affected the popularity of the cards offering air miles? Not at all, says a spokesperson for American Express.

"Our British Airways American Express Cards are a popular choice amongst cardmembers who enjoy travelling."

Still, it's worth weighing surcharges into any rewards deals that come with credit cards. For instance, the fee-free BA American Express card earns one Avios per pound spent. Redeem your Avios for a BA flight and, if you've spent £20,000 on your card within the last year, you'll earn a companion ticket, good for 12 months. Just remember that you will pay surcharges on whatever flights you take, and so will your friend.

The same goes for credit cards co-branded with Virgin, such as the Virgin Atlantic White Credit Card and the Virgin Atlantic White Visa Credit Card. No matter how many miles you earn with the card, you will still fork out real pounds when you cash them in for travel.

See related: How to avoid unnecessary fees on budget airlines, Should you convert to new Emirates rewards cards?

Published: 21 March 2014