Non-London American Airlines routes to Europe

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A few weekends ago I held one of my notorious subscribers-only meetups in Philadelphia, and a long-time reader mentioned that American Airlines was launching non-stop service from Philadelphia to Budapest. I more or less gave up on American years ago since their miles are so difficult to earn and their award availability is so terrible.

But I was at least willing to entertain the possibility that a oneworld route to Europe that avoided London might be a good use of Avios, since it might mean avoiding Heathrow's high surcharges on premium cabin award redemptions. So, I decided to check it out.

British Airways is not showing American award availability

The British Airways search engine is having one of its periodic fits, making it extraordinarily annoying to find American SAAver award space. One trick that worked for me on some searches (but not others) was to click back and forth between dates in your search results, which after 2-20 clicks sometimes makes American award space magically appear.

Iberia is showing American award availability

Fortunately, Iberia Plus is showing American award availability normally, and you can transfer British Airways Avios to Iberia Avios, and now you can even transfer Chase Ultimate Rewards points directly to Iberia Plus without using British Airways Avios as an intermediary.

Nonstop Iberia Plus awards cost the same number of Avios as nonstop British Airways awards (adding connections creates complications, and opportunities), but the cash component of award tickets can differ for reasons I don't yet fully understand.

On the flip side, Iberia requires you to book roundtrip itineraries, which neither American nor British Airways does.

Tax and surcharge roundup

With that out of the way, we can compare the value of American miles and Iberia Avios for roundtrip flights between Philadelphia and Europe that avoid London. All these flights cost 60,000 American miles roundtrip in economy and 115,000 American miles in business, so what I want to get at is what additional cost you pay booking using Iberia Avios, a currency that for most folks is much easier to earn than AAdvantage miles.

I searched for business class award availability between Philadelphia and every city in Europe served nonstop from there, avoiding American's close-in booking fee wherever possible, and plugged them into this spreadsheet. Where you see a mileage cost of 87,500 I was unable to find a single business class award seat in one direction and selected a mixed economy/business award instead. I was unable to make Iberia show Shannon itineraries at all.

I've helpfully color-coded the chart, but you can make a copy and sort it differently if you're so inclined. A few things immediately pop out of these numbers:

  • There are still several sweet spots when redeeming Avios for business class to Europe, even after accounting for carrier surcharges. If you have a healthy balance of Avios or Ultimate Rewards points, you should prefer to redeem those for business class flights to Spain and Portugal, since the amount you'll save in transferred Ultimate Rewards more than makes up for the increased carrier surcharges, even if you just redeem your Ultimate Rewards for the cash to pay the associated fees.
  • Paris is a good deal in business, and an even better deal in economy, costing just 42,000 Avios and $390 roundtrip, although if you're flying in economy you'll usually just want to book a paid fare, which can be as low as $579 on this route.
  • The flip side is that some routes cost so much more in both Avios and cash that you should save your AAdvantage miles to redeem for those flights. Basically everything East of the Rhine is better booked with AAdvantage miles or another zone-based currency instead of distance-based Avios. Of course, a $2,000 roundtrip business class ticket to Europe isn't exactly "expensive," but the point here is to use the right currency for the job, and when booking award tickets to Rome Avios are definitely the wrong currency for the job!

Conclusion

I don't think you should hoard your American AAdvantage miles. Heaven knows I don't hoard them, which is why I only have about 15,000 in the bank. But you shouldn't hoard your Ultimate Rewards points either!

So if you do manage to find low-level American award space that works for you, it's probably worth at least popping over to the British Airways (if it ever starts working) or Iberia (if you're booking a roundtrip) websites to see if your itinerary happens to fall into one of their distance-and-surcharge sweet spots.

British Airways devaluation got you down? Book with Iberia instead!

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The 4,500-Avios, short-haul British Airways Executive Club award has long been one of the most valuable things about the program for North Americans. On flights within the United States you pay neither fuel surcharges nor close-in booking fees, and your Avios are refundable up to 24 hours before departure (you forfeit only the taxes and fees).

Starting February 2, 2016, the same short-haul flights originating or ending in North America will cost 7,500 Avios per segment, although there's no indication the other two features will change.

The good news is that as far as I can tell Iberia hasn't announced any changes yet.

Iberia is still a weird program

The two key things to know about booking North America Iberia award flights are:

  • Awards have to be round trip. You can't even search for one-way availability; you have to use a dummy return date (or search for availability on American Airlines' or British Airways' website first);
  • Award prices are based on total trip length, adjusted by cabin.

What do I mean, "adjusted by cabin?" Hopefully the following example will illustrate the idea: a flight from Chicago (ORD) to Louisville (SDF), a 574-mile roundtrip, costs:

  • 11,000 Avios and $18.70 in Blue Class (economy);
  • 22,000 Avios and $18.70 in Blue Class one way and First on the return;
  • and 33,000 Avios and $18.70 in First in both directions.

The same itinerary connecting in Charlotte (CLT) in each direction (1,868 miles roundtrip), costs:

  • 17,000 Avios and $24.70 in Blue Class;
  • 23,109 Avios and $24.70 in First on one of the CLT-SDF legs (17.9% of the total distance) with the remainder in Blue Class;
  • 27,891 Avios and $24.70 in First on one the ORD-CLT legs (32.1% of the total distance) with the remainder in Blue Class;
  • 29,218 Avios and $24.70 in First on both of the CLT-SDF (35.9% of the total distance) legs with the remainder in Blue Class;
  • 38,782 Avios and $24.70 in First on both of the ORD-CLT (64.1% of the total distance) legs with the remainder in Blue Class;
  • 34,000 Avios and $24.70 in Blue Class one way and First on the return;
  • and 51,000 Avios and $24.70 in First in both directions.

The total number of Avios required very closely corresponds to the sum of the percentages of the total itinerary flown in each cabin multiplied by that cabin's roundtrip Avios award cost.

Observe two key things here:

  1. Under today's award chart, a roundtrip, nonstop flight between Chicago and Louisville in First is cheaper if booked with Iberia (33,000 Avios) than if booked with British Airways (36,000 Avios), and an itinerary connecting in Charlotte is also cheaper with Iberia (51,000 Avios) than with British Airways (72,000 Avios — no, I'm not kidding);
  2. After the February 2, 2016, British Airways devaluation, Blue Class nonstop flights booked with Iberia will be cheaper (11,000 Avios) than if booked with British Airways (15,000 Avios).

Takeaways

Here are a few things to take away from this post:

  • You can only use Iberia to book roundtrip partner itineraries;
  • Do not use Iberia to search for partner award availability;
  • Once you find North American award availability with American Airlines or British Airways, check their prices against Iberia's;
  • Iberia's online booking system is very frustrating but very flexible — it's easy to book short legs in Blue Class and longer legs in First for potentially big savings, because of the "cabin adjustment" mentioned above.

Conclusion

Using Iberia Avios instead of British Airways Avios for short-haul North American flights isn't a silver bullet to solve all of your award booking problems. But it is another tool you can use to let your miles take your further, faster.

Booking Iberia award tickets for fun and profit

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Before I get started today, it would be irresponsible of me not to state that your Avios are fine. You see, the last time I wrote about Iberia, the travel hacking blogosphere exploded with speculation about an upcoming British Airways Avios devaluation. While British Airways Avios have since been devalued, they weren't devalued in the specific, weird way that Iberia was pricing out oneworld partner awards.

So promise you won't freak out.

Iberia charges lower fuel surcharges on their own flights than British Airways does

Once you've initialized your Iberia account, you can freely transfer Avios between a British Airways, Avios.com, and Iberia Plus Avios account.

The obvious reason to do so is that on identical Iberia-operated flights, you'll be charged lower fuel surcharges using Avios in an Iberia Plus account than Avios in a British Airways account.

For example, here's an Iberia Plus Avios redemption between Chicago and Madrid in early January, pricing out at 20,000 Iberia Plus Avios and €74.20 ($85.54):

And here's the exact same itinerary pricing out at 20,000 British Airways Avios and $275:

Did you see my sleight of hand?

I'll give you a hint: one of the fuel surcharges I cited had to be converted to US dollars. One of them was converted for me.

British Airways has a funny approach to currency conversion

Here's a British Airways-operated flight between Chicago and Budapest in June, 2015. With Great Britain's passenger charges, as expected there are some substantial taxes and fees on such a ticket. It prices out at 19,500 Avios and $321:

Here's the same ticket priced out on Iberia's website, costing 19,500 Avios and €264.34 ($304.70):

I understand, you're not impressed with my saving you $16.30 in surcharges. Now watch this.

British Airways and Iberia both let you buy Avios at deep discounts

Instead of paying 19,500 Avios and $321, British Airways will let you book the same itinerary for just 6,700 Avios and $481, letting you buy 12,800 Avios for $160, or 1.25 cents each:

Meanwhile, Iberia will let you buy 9,750 Avios for €90 ($103), or 1.06 cents each:

At this point you might start to admit that this currency conversion business is at least worth being aware of. Now watch this.

British Airways and Iberia both let you buy lots of Avios for premium-cabin awards

I've been showing you economy cabin redemptions so far. But British Airways also operates premium cabins!

Here are the same Chicago-Budapest flights in business class, priced out at 62,750 British Airways Avios and $491, allowing you to buy 30,950 Avios for $805, or 2.6 cents each:

And here's the same flight priced out for 62,750 Iberia Plus Avios and €412.26 ($475.82), allowing you to buy 30,100 Iberia Plus Avios for €510 ($588.63), or 1.96 cents each:

Conclusion

I would never suggest earning, let alone buying, rewards currencies speculatively: if your account balances are high enough, you'll be better off simply transferring your Membership Rewards or Ultimate Rewards points to Avios and booking traditional award tickets.

On the other hand, if you're diligently keeping your flexible balances as low as possible, and especially if you're planning trips involving high-value Hyatt redemptions (or if you have a Southwest companion pass), you may well find that buying up the Avios you need to complete a redemption makes sense compared to transferring the points in from Chase Ultimate Rewards.

If you happen to find yourself in that situation, do yourself a favor and see if an Iberia Avios redemption will save you a couple hundred dollars.

Iberia Plus requires a positive points balance to search oneworld award space

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Iberia and British Airways, two of the airlines that use Avios as their rewards currency, have long had a number of differences in their award charts. British Airways charged each award segment separately, while Iberia averaged the cost of each first class, business, and economy leg over the length of the entire trip (see an illustration here).

For the last few weeks, I've run into a different problem: I have been totally unable to search and price oneworld award availability using my Iberia Plus account. Here's low-level availability between Dallas and Chicago on American Airlines on April 17, 2015:

Here's the same seat available for 7,500 British Airways Avios:

And here's the result that kept coming up when searching in my Iberia Plus account:

Iberia Plus won't show oneworld availability unless you have Avios in your account

After what seemed like hours of fiddling around with my Iberia Plus account, it finally occurred to me that I didn't have any Avios in the account. What if, like some other overseas loyalty programs, Iberia required a positive account balance to search for award space?

To test the proposition, I transferred 1,000 Avios from British Airways into my Iberia Plus account, and sure enough, the (somewhat overpriced) award space immediately appeared:

Conclusion

I've been planning to explore potentially valuable Iberia Plus awards for a few weeks, but have been stymied by this problem. So now you know: oneworld award space will only appear on Iberia Plus searches if you have a positive Iberia Plus Avios balance.

Onward from Madrid, Dublin, Berlin

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Last week I wrote about the three transatlantic British Airways partners that, due to the distances involved and the fact that taxes and fees are low on these routes, make even post-devaluation Avios redemptions competitive with cash or (depending on your other balances) award redemptions using other loyalty currencies. Those routes again are:

These redemptions — even post-devaluation — are great values in business class compared to cash (between 2.45 and 9.8 cents per Avios) and decent values compared to other airline miles. If nothing else, you should be aware of them because it's an additional option if you can't find award availability on your first-, second-, or third-choice airlines.

Judging by the comments to that post, you might think travel hackers are indifferent to this problem, on the grounds that it's better to build a trip around award availability on airlines you actually want to fly.

But for people with more restricted schedules (not me, but my understanding is this applies to most people in the working world), being aware of as many options as possible maximizes the chances of scoring a cheap award flight instead of being stuck paying retail to sit in economy.

A whole different problem, however, is the very real issue that you may not want to go to Ireland, Germany, or Spain!

Searching for cheap onward connections

A good first stop when thinking about Avios redemptions is the Wandering Aramean's Avios Map. Type in an airport code and you'll see all the possible non-stop Avios redemptions. Be sure to cross-check those flights with Google Flights or another flight search site, however; Seth's data are often out of date or inaccurate.

The Avios Map tool has two drawbacks: it doesn't show the taxes and fees for the route, and it only goes up to the 12,500 Avios distance band (so flights between New York and Germany don't appear, even though they're terrific values on airberlin). Still, if you're piecing together a multi-stop itinerary, you're likely sticking to shorter routes anyway, since Avios prices increase so rapidly with each additional leg and distance band.

After finding the routes you're interested in, plug them into British Airways' Avios calculator (and Iberia's if your flight is operated by Iberia) and look for the taxes and fees you'll incur. Don't forget to check the return as well; departure taxes vary wildly between airports.

This is basically brute force work, but if you're rich in Avios (or cheap Ultimate Rewards points), it's also a great way to travel around the world for next to nothing.

A few fun finds

These are literally just the first couple of options that jumped out at me in 30 minutes of clicking around using the exact procedure I described above:

  • Berlin-Abu Dhabi. 12,500 Avios in economy, 25,000 Avios in business (will be 37,500). $48.24 in taxes and fees outbound, $21.78 in taxes and fees return. From Abu Dhabi, continue on Etihad virtually anywhere in the world.
  • Dublin-Prague/Vienna. 7,500 Avios in economy, 15,000 (unchanged) Avios for intra-Europe business class. $51.90 in taxes and fees outbound from either, $68.25 return from Vienna, $53.86 return from Prague.
  • Madrid-lots of places!

Take Iberia everywhere, but beware Iberia weirdness

Once you get to Madrid, you have a ton of great options, but you need to beware of Iberia's intense weirdness. For example, here's an Iberia-operated flight to Tel Aviv booked with British Airways Avios:

Here's the same flight booked with Iberia Avios:

I'm not going to get into an argument about whether 7,500 Avios are worth more or less than $45.59 (more), I'll just point out that this Iberia flight, unlike ones departing New York and Boston to Madrid, incurs more taxes and fees using Iberia Avios than British Airways Avios.

When the Iberia devaluation takes place on April 1, and the British Airways devaluation on April 28, 2015, it'll become even more important to check, every single time, which currency makes your awards cheaper overall.

Here's another cool option to Moscow's Domodedovo airport, booked with British Airways Avios:

And the same flight booked with Iberia Avios:

Conclusion

Obviously these flights are only a small sample of those operated out of Berlin, Dublin, and Madrid by British Airways partners, but I hope they illustrate the possibilities of plugging together Avios flights as a way to navigate to, from, and around Europe. If you spot any other long-distance, low-fee gems, feel free to share them in the comments!

Fun with post-devaluation Avios for premium cabin redemptions

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In the last few years we've been flooded with airline rewards program devaluations. A few examples:

  • On the earning side, we've seen revenue-based earning on Delta and United. Alaska also reduced earning on Delta-operated flights, leaving American (and for the next few weeks US Airways) and the Alaska-American partnership the last major domestic distance-based loyalty programs.
  • On the redemption side we've seen increased United partner award costs, Delta's multiplication of award levels and close-in booking penalties, and British Airways' April 28, 2015, move to increase business and first class partner award redemptions from 2 and 3 times the cost of economy awards, respectively, to 3 and 4 times.

That last devaluation — increasing by 50% and 33% the cost of British Airways Avios redemptions in business and first class, respectively, got me thinking: when are Avios redemptions still cheaper than other alternatives?

The question is interesting because British Airways is by far the oneworld member it's easiest to earn miles with, as a transfer partner of both Chase Ultimate Rewards and American Express Membership Rewards, both of which offer bonus spending categories that make it easy to get big point balances with relatively little manufactured spend.

American Airlines, the other main oneworld member airline for US residents, is a transfer partner of Starwood Preferred Guest, but earning Starpoints is laborious at just one Starpoint per dollar spent with their co-branded American Express card and a transfer ratio of 1 Starpoint to 1.25 AAdvantage miles (if transferred in blocks of 20,000 Starpoints).

The big three transatlantic Avios routes

There are three transatlantic routes which, due to the distances and airlines involved, are often cited as key Avios sweet-spot redemptions:

  • airberlin flights between New York City and Dusseldorf or Berlin, Germany;
  • Iberia flights between Boston or New York City and Madrid (after transferring Avios to the Iberia Plus program);

  • Aer Lingus (not a oneworld member, but a British Airways partner) flights between Boston and Dublin, Ireland.

All three partners charge low or no fuel and carrier surcharges, and are on the higher end of their respective Avios distance bands such that your Avios take you farther than on comparable transatlantic routes that happen to be slightly longer.

Since these three redemptions are among the most popular routes for Avios redemptions, I thought it'd be interesting to compare similar redemptions using other points currencies (and, of course, cash).

Iberia: Boston and New York to Madrid

At 3,410 (Boston) and 3,589 (New York) miles in length, economy tickets on these routes cost 20,000 Iberia Avios each direction on flights operated by Iberia. Business class tickets currently cost 40,000 Iberia Avios, but on April 1, 2015, "Off Peak Season" redemptions will go down to 34,000 Iberia Avios each way in business class, and "Peak Season" redemptions will go up to 50,000 Iberia Avios each way in business. Learn more about peak season pricing here.

Outbound award flights incur about €76.20 ($80.83) in fees and charges, and the return costs about €110.53 ($117.25) in fees and charges. A brief scan of roundtrip business class fares shows nonstop business class flights from New York costing from $2649 and from Boston costing from $4672 (one-way fares are the same or higher), so in cash terms a roundtrip Iberia Avios redemption would yield:

  • BOS-MAD: 6.58 cents per Avios (Off Peak Season), 4.47 cents per Avios (Peak Season);
  • JFK-MAD: 3.6 cents per Avios (Off Peak Season), 2.45 cents per Avios (Peak Season).

Those are pretty good redemptions!

Of course, it's cheating to compare these redemptions to cash fares. We're travel hackers; we don't pay retail.

From the New York area, here are the additional non-stop, roundtrip business class award redemption options:

  • Delta. From 125,000 SkyMiles plus $52 in fees;
  • United. From 115,000 Mileage Plus miles plus $52 in fees;
  • American. From 100,000 AAdvantage miles plus $52 in fees.

From Boston, Iberia operates the only nonstop flight, so American (or, for the next few weeks, US Airways) miles are the only domestic airline miles you can redeem for that route.

airberlin: New York to Dusseldorf and Berlin

At 3,749 (Dusseldorf) and 3,968 (Berlin), these flights are knocking on the very top of the same band as the Iberia flights discussed above. They cost 20,000 British Airways Avios each way in economy, and 40,000 Avios each way in business. On April 28, 2015, business class redemptions will go up to 60,000 Avios each way.

Outbound flights incur $5.60 in fees and charges, and return flights incur $88.17 in fees and charges. Nonstop, roundtrip business class flights from New York City to Dusseldorf start at $3,067, while flights to Berlin start at $3,065. If we split the difference we get an Avios redemption rate of 2.48 cents per Avios for roundtrip itineraries in business class.

Besides Avios redemptions on airberlin, here are the other options on these routes:

  • United operates a flight between Newark and Berlin. 115,000 Mileage Plus miles and $89.80 in taxes and fees.
  • Lufthansa operates a flight between Newark and Dusseldorf. As a partner award, business class flights cost 140,000 United Mileage Plus miles and $91.90 in taxes and fees.
  • American (on airberlin). 100,000 AAdvantage miles and $91.90 in taxes and fees.

Aer Lingus: Boston to Dublin

Sneaking in at 2,993 miles, this route is pretty much what Avios were designed for. Economy flights cost just 12,500 Avios each way, and business class flights currently cost 25,000 Avios, going up to 37,500 Avios on April 28, 2015.

Outbound flights incur $34.17 in taxes and fees, while the return flight costs $74.08 in taxes and fees. Nonstop, one-way business class fares cost from $3,709 (this is the only route of the three discussed here with one-ways for half the cost of roundtrips). That gives you an Avios redemption value of between 9.7 and 9.8 cents per Avios. That preposterously high Avios valuation is actually borne out on this route, since I could identify no other airlines operating flights on this route.

However, Aer Lingus is a partner of United, as well as British Airways, which means it's technically possible to redeem Mileage Plus miles for the same route for 70,000 miles each direction in business class. In reality, since United and British Airways are both transfer partners of Chase Ultimate Rewards, it's literally never worth transferring points to United instead of British Airways in order to book the same Aer Lingus award reservation.

Analysis

As a transfer partner of all three major flexible points currencies, we're always going to be eager to redeem British Airways (or Iberia) Avios when possible, since they're so easy to acquire. With that in mind, here's the breakdown of these three key routes to Europe (all figures are roundtrip):

  • Aer Lingus between Boston and Dublin. Avios are a no-brainer, since this is British Airways' lowest transatlantic distance band, and any region-based airline partner is going to charge far more for the same flights. Even if you're flying on to mainland Europe, Dublin's a great place to start your itinerary, since you can get there for just 75,000 Avios roundtrip in business class.
  • airberlin between New York City and Berlin or Dusseldorf. Unless you're flush with American Airlines AAdvantage miles from credit card applications, you'll want to take advantage of the luxury of choosing between United, Lufthansa, and airberlin availability. At 115,000, 140,000, and 120,000 Ultimate Rewards points, respectively, all are great choices on this route.
  • Iberia between Boston or New York and Madrid. From Boston, this route is a no-brainer, since it's the only non-stop route to Madrid. From New York, again unless you're flush with AAdvantage miles, you'll want to look at your mileage balances and enjoy the luxury of choosing between Delta-, United-, and Iberia- operated flights between New York and Madrid, which clock in at 125,000 SkyMiles, 115,000 Mileage Plus miles, and 68,000-100,000 Iberia Avios, respectively.

Conclusion

I don't pretend that this analysis is definitive. I'm omitting important issues like transfer bonuses between Membership Rewards and British Airways that could substantially drive down the cost of even longer-haul flights on these carriers.

However, I've never seen a comprehensive analysis of the miles and cash cost of these routes before, let alone one taking into account the April, 2015, devaluations of both Iberia (April 1) and British Airways (April 28), so I'm happy to provide a first step in that direction.

Thoughts and criticism are, as always, welcome in the comments.

Breaking: Iberia goes bizarre, British Airways award chart intact (for now)

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About 12 hours ago, at 10:23 am, I sent out what seemed like an innocuous tweet:

 

"Did Iberia go revenue-based while I wasn't watching? Short domestic flights are pricing out astronomically"

Here's what I was referring to. While planning an award trip using some of the 100,000 British Airways Avios I earned during that short-lived signup bonus back in January, I wondered whether I might see different availability or cheaper taxes and fees if I transferred my British Airways Avios (through Avios.com) to Iberia.

Here's the itinerary I was looking at, in British Airways' booking engine:

This is an example of an itinerary that, since British Airways prices segments out individually, is a pretty good deal despite their policy of charging three times the price of coach for US domestic first class. It's two 13,500 Avios legs paired with two 4,500 Avios legs, for a total cost of 36,000 Avios, while the same itinerary would cost 50,000 AAdvantage miles or 65,000 Alaska Airlines Mileage Plan miles.

Here's the same itinerary priced out with Iberia's award engine:

That's...weird. The same itinerary is pricing out cheaper using Iberia Avios than British Airways Avios (although the additional taxes and fees make British Airways the better deal overall).

But even weirder is that there's no reason, based on the award charts we all thought Iberia was using, for that odd number of Avios to be required at all.

Since Iberia only allows round-trip award reservations, I thought I'd see whether I got a similar result with a single-cabin reservation. Instead, it got weirder.

Here's a first class reservation between Madison and Chicago using British Airways Avios:

Just as we saw above, this roundtrip flight in first class prices out at 27,000 British Airways Avios.

Here's the same reservation priced out with Iberia Avios:

You read that right. The itinerary costs over twice as many miles using Iberia Avios (which, as a reminder, are freely transferrable to British Airways Avios).

For a final test, I thought I'd check the economy itinerary between Chicago and Lexington. Here's what British Airways shows me:

As you'd expect, the short round-trip itinerary prices out at 4,500 Avios each way.

Here's Iberia's pricing of the same award:

In this case, the economy itinerary costs almost three times as much using Iberia Avios!

The Explanation

As my Twitter follower @KennyBSAT was the first to point out, Iberia has quietly introduced what most bloggers this evening are calling a devaluation (see here, here, here, and here). They've already implemented a new award chart for partner award bookings, including American Airlines award bookings like the one I was booking today.

The new award chart will require close study, and as Gary points out, "long haul flying can be cheaper than using BA Avios."

The most interesting point my example above illustrates is that they appear to use a formula to weight mixed-cabin redemptions, such that adding short-haul economy legs radically reduces the total cost in Iberia Avios, sometimes below the cost in British Airways Avios. Since Iberia requires round-trip redemptions, it isn't obvious how to use this loophole to add a "third strike" to a reservation in order to drag down redemption costs. However, adding a short-haul economy flight to a long-haul business or first class flight may, as in my example, drastically reduce the number of Iberia Avios required for your award redemption.

Conclusion

Trust me: you'll be seeing a lot more analysis along these lines on all the most popular travel hacking blogs in the coming days and weeks. Potential arbitrage opportunities like these are the bread and butter of travel hackers, and I suspect a lot of discussions will be taking place on Twitter, as well as in the comments to this blog and others. Be sure to follow me @FreequentFlyr and check out my list of some of the best travel hacking feeds to make sure you're in the loop for this ongoing and guaranteed-to-be-lively discussion.

Initializing Iberia Plus Avios accounts

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Last month I mentioned that I was trying to figure out how to "initialize" my Iberia account. Now that I've succeeded, I can share my experience.

What are Avios?

For most hotels and airlines we use in the United States, a loyalty currency is almost indistinguishable from a loyalty program. It doesn't occur to anyone that there's a difference between the Delta Skymiles loyalty program and an individual Delta Skymile.

Avios work slightly differently: Avios are the rewards currency of three different loyalty programs: British Airways Executive Club, Iberia Plus, and the Avios travel rewards program.

So just like you can use Euros issued in France to buy bratwurst in Vienna, you can use your Avios for rewards through any of the three programs.

However, as the people of Greece recently discovered to their chagrin, just because countries use the same currency doesn't mean they can't impose border controls. That's exactly what Iberia has done, and smuggling Avios past those controls is the subject of this post.

Why Iberia?

While British Airways and Iberia charge the same number of Avios for flight redemptions through either program, Iberia charges much lower fuel surcharges for award redemptions on their own flights than those booked using Avios in British Airways Executive Club club accounts.

Here's British Airway's Avios calculation for a non-stop flight between Madrid and New York's JFK airport:

At the request of a very generous reader, this picture features a circle

Here's the same route priced out using Avios in an Iberia account:

At the request of a very generous reader, this picture features four arrows

What's the problem?

In a perfect world, that's all you'd need to know. By choosing "Combine my Avios" (find it under "Manage my account") on British Airways' website, you'd be able to save yourself hundreds of dollars on your Iberia award flights by booking using Iberia Plus instead.

Unfortunately, the world we live in isn't perfect yet, and you're not allowed to transfer Avios into your Iberia account until it's been open for 90 days and has at least one other (non-"Combine my Avios") transaction.

What's the solution?

In response to my original post a number of readers reached out with suggestions on how to "initialize" my Iberia account:

  • e-Rewards redemption. This is what I ultimately did: I redeemed $25 in e-Rewards credit for 750 Avios in my Iberia account. That transaction initialized my (over-90-day-old) account, and I was then able to successfully transfer Avios from British Airways to Iberia using Avios.com as the Points Guy describes here. This worked for me since I already had about $24 in e-Rewards credit, so I just had to flunk a few surveys in order to earn the additional $1 in credit. I initiated my transfer on May 29, and the Avios were credited to my Iberia Plus account on June 2;
  • Membership Rewards transfer. In the comments, Grant not-very-helpfully (I don't have Membership Rewards points) pointed to his post on transferring Membership Rewards points to Iberia Plus in order to initialize an account;
  • Melia Rewards transfer. Another reader reported being able to transfer the 2,000 point signup bonus with the MeliaRewards program to Iberia. I wasn't ultimately able to do this — as the reader pointed out, the 2,000 bonus points aren't supposed to be eligible for transfer. However, if you do ever stay with a Melia-affiliated property, or earn Melia points through some other activity, you will be able to transfer the points you earn to Iberia Plus.

Conclusion

Iberia has great award availability and relatively low fuel surcharges on their own flights; that can be a powerful combination when trying to decide how to fly to or from Europe using Avios, while Avios can be one of the easiest loyalty currencies to earn since British Airways Executive Club is a transfer partner of Chase's Ultimate Rewards points.