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Quietly and without any announcement, British Airways cut the high fuel surcharges it used to charge for awards on Iberia flights. The new charges align with the more modest fuel surcharges that Iberia levies on its own awards!
Maximizing The Reduced Fuel Surcharges on Iberia
The excessive fuel surcharges levied by British Airways were one of the major downsides to redeeming Avios with partners. With this substantial reduction, some of the better sweet spots of the Avios program are back into play. For example, off-peak one-way business class awards from the US to Spain on Iberia will set you back only 34,000 British Airways Avios.
Searching around, we found one-way business class awards from Chicago (ORD) to Madrid (MAD) on the British Airways site for 34,000 Avios plus $124.60 in taxes and fees. That is a dramatic improvement, making it an excellent return on your Avios and a much more reasonable cost in terms of taxes and surcharges.
Sweeten the Deal with a Transfer Bonus
You can make things even sweeter if you can dovetail a transfer bonus with your travel plans. Now through July 31, 2022, Chase Ultimate Rewards offers a 30% transfer bonus when transferring Ultimate Rewards points to the British Airways Executive Club. With the promotion, for every 1,000 points you transfer, you will receive 1,300 Avios.
To book the above example, you will need to transfer 27,000 Chase Points, plus $124.60. That is a stunning return and excellent value for a transatlantic award in business class. If you are heading across the Atlantic and can make the route and travel dates work for you, then transferring some points and booking is a no-brainer!
Why is British Airways reducing fuel surcharges on Iberia?
British Airways, Iberia, Aer Lingus, and Qatar Airways are all now sharing Avios as a single points currency. Now that you can easily move Avios between the four programs for free, the time is right for some rationalization.
Anomalies in award pricing between the programs mean members have to transfer their Avios to the cheapest program to get the best deal. But there is no longer a benefit to any airline of having pricing anomalies. For instance, a flight on Qatar metal from Doha to Bali should set you back the same number of Avios whether you book it through Qatar, Iberia, or British Airwayse.
These rationalizations are exactly what British Airways has been doing recently when it dropped the pricing on awards with Qatar Airways to match what Qatar charges for its own awards. Iberia has historically charged much lower fuel surcharges on its awards, so it seems British Airways is now mirroring those reduced surcharges. Since ultimately keeping higher charges would mean members are transferring Avios away from British Airways to book directly with Iberia.
By far, the biggest drag on the British Airways Executive Club program is the ludicrous fuel surcharges it imposes on awards. In some extreme cases of mainly short-haul routes, the surcharges are nearly the exact cash price of the ticket rendering the award virtually worthless. The surcharges were so high that entire strategies were put together on how to avoid them, including transferring your Avios to Iberia and booking directly.
Now that British Airways has brought its fuel surcharges in line with what Iberia charges, there is no need for a workaround. Whether your Avios are held with British Airways, Iberia, or Qatar Privilege Club, you can now take advantage of the lower Iberia Surcharges without jumping through hoops.
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