All Avios Aren’t Created Equal: Using Iberia Instead of British Airways to Cut Taxes & Fees
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Although they’re most associated with British Airways, Avios are actually the mileage currency of Iberia and Aer Lingus as well. While redemption rates via all three outlets are largely the same (i.e., distance-based with some interesting cash and points options), one key area in which they differ is in the amount of taxes and surcharges frequent flyers must bear the cost of when redeeming their Avios.
British Airways tends to get a bad rap thanks to the exorbitant taxes and surcharges the airline levies on awards on its own flights as well as those of partners that begin, end and pass through the UK. This is where redeeming Avios through the Iberia Plus program instead comes in handy.
By doing so, flyers can save hundreds of dollars, and have access to better award availability on Iberia’s own flights. The program also periodically offers promotional award redemption rates that can be incredible bargains for transatlantic travel.
Plus, it’s easier than ever to transfer points into an Iberia Plus account through a variety of methods so that you will have the points on hand that you need to redeem when the time comes.
Here’s a look at the Iberia Plus program and why you might want to consider it instead of British Airways Executive Club when it comes to maximizing your Avios.
Activating Your Iberia Account
To begin with, you’ve got to register for an Iberia Plus account. Do so as soon as possible because, for at least one of the transfer methods we’ll get into later, your account must be open at least three months and you must earn at least one Iberia Avios to activate it. More on that below.
For convenience, make sure the name on your British Airways Avios account exactly matches that on your Iberia Plus account and you are using the same email address for both. They must match in order for you to move Avios between your various accounts.
The easiest and cheapest way to get your Iberia Plus account up and active is to transfer points in from one of the airline’s partner programs: American Express Membership Rewards, Chase Ultimate Rewards or Starwood Preferred Guest.
In order to transfer your Amex points to Iberia, you need a credit card that earns full Membership Rewards points like The Platinum Card® from American Express, The Business Platinum Card® from American Express, or the American Express EveryDay® Preferred Card among others. Points transfer to Iberia at a 1:1 ratio.
Chase added both Iberia and Aer Lingus as transfer partners in November 2017, making it even easier to top up your Iberia account directly instead of having to transfer to British Airways then combine your Avios. In order to earn transferable Ultimate Rewards points (rather than ones that are simply redeemable for cash back, like those earned with the Chase Freedom alone), you must have a premium Chase card like the Chase Sapphire Reserve, Chase Sapphire Preferred Card or Ink Business Preferred Credit Card.
Starwood Preferred Guest points also transfer to Iberia at a 1:1 ratio (for now), and every time you transfer 20,000 points, you get a 5,000-point bonus. Unfortunately, Amex changed its Starwood Preferred Guest credit card welcome bonuses to statement credits, but if you have the Starwood Preferred Guest® Credit Card from American Express or Starwood Preferred Guest® Business Credit Card from American Express, you can still use them to rack up points on everyday spending.
The other useful method for topping up your Iberia Plus account is simply to transfer in Avios from your British Airways Executive Club wallet. However, this method is the one with the most restrictions on it. To be eligible for such a transfer, your Iberia account must have been open at least three months and must have had some qualifying earning activity — meaning you must have earned at least one Iberia Avios.
To do so, you have a few options. You can credit a flight on Iberia or its Oneworld partners to your account. You can buy points either directly from Iberia (not suggested since it’s expensive), or at a steep discount with one of the Groupon promotions that have popped up lately. Finally, you can simply transfer in points from one of Iberia’s partner programs like Amex Membership Rewards or Chase Ultimate Rewards, and that should activate your account.
Once your Iberia Plus account is eligible for British Airways transfers, log in to your British Airways Executive Club account and click on the “Combine my Avios” tab under “Manage My account.”
You’ll be directed to this page detailing how you can move Avios between your accounts, and then click on “Combine my Avios.”
From there, enter your Iberia Plus number and PIN.
Then you are taken to this page showing your linked accounts, and you can choose the number of Avios you want to move between them and in which direction.
If your accounts are matched and active, the process is quick and easy.
The Iberia Credit Card
The sign-up bonus is two-tiered and includes 50,000 bonus Avios for making $3,000 in purchases within three months of account opening, plus another 25,000 bonus Avios for making an additional $7,000 in purchases (for a total of $10,000) within 12 months of account opening.
Cardholders earn three Avios per dollar on flight purchases made directly from Iberia, British Airways, LEVEL and OpenSkies; and one Avios per dollar on everything else. It also comes with other perks like 10% off flights (like the British Airways Visa Signature Card) and a $1,000 discount voucher toward Iberia flights when you make $30,000 in purchases in a single calendar year.
The card does not appear to be subject to Chase’s 5/24 rule on new credit card approvals at this point, either, which makes it an interesting choice for consumers looking for a new credit card. Do keep in mind that its $95 annual fee is not waived the first year, though.
As you can see, there are a lot of great ways to rack up Iberia Plus Avios quickly. Now it’s time to look at why you might want to do so rather than relying on British Airways Avios.
Let’s get started with a quick look at both the British Airways and Iberia award charts. Both charts are distance-based and feature off-peak dates where cheaper awards are available, and peak dates with higher award levels that also usually correspond to the redemption rates for awards on partner airlines.
BA does not publish its charts any more, but you can see the values you can expect to lay out this past post.
The Iberia Plus redemption charts can be found here. This is the off-peak chart…
And this is the peak chart…
As you can see, the values among all three charts (the BA one we compiled and the two published Iberia ones) are pretty similar. Note, however, that the two programs’ off-peak dates are not the same. Here are BA’s for June/July, for example…
And here are Iberia’s…
So if you are considering which program to use to book a specific award, be sure to double-check the dates and do some award searches around your expected travel dates. Beware, though, that Iberia’s site is generally terrible at displaying American Airlines award space (and BA seems particularly glitchy lately too), so if you find AA awards on the BA site or on American’s own site, you might have to call in to Iberia to book.
The main reason you should consider using Iberia Plus Avios instead of British Airways ones, however, is quite simple: You’ll generally pay less in taxes and fees. A lot less in some case. The greatest differences seem to be on Iberia’s flights between the US and Europe, for which British Airways charges hundreds of dollars more than Iberia does.
Here are several examples that prove this point. Let’s start with the most dramatic.
Here is a round-trip award from New York (JFK) to Madrid (MAD) on Iberia booked through Iberia. The pricing is strange because it falls over the break in the calendar where awards switch from peak to off-peak. The total would cost 84,000 Avios plus $211.
BA would charge you 84,000 Avios plus a whopping $1,049 in taxes!
The expensive leg seems to be the one from JFK to Madrid. Here’s the BA version for 50,000 Avios plus $506.
The Iberia Plus award would cost the same 50,000 Avios but only $87. At that price, why would you ever book through BA?
It’s not just in business class, either. For example, here’s an Iberia award in economy from New York (JFK) to Madrid (MAD) for 17,000 Avios plus $76.
For the same flight, British Airways would charge you 17,000 Avios plus $178 — over $100 more!
Iberia would charge you 25,500 Avios plus $112 for premium economy from Madrid to New York.
While British Airways would charge you the same Avios plus $226.
While these are the scenarios where you’re saving the most money, you can also get a discount on booking flights on both BA and American using Iberia Avios. An award on British Airways from New York-JFK to London Heathrow (LHR) in economy would cost 13,000 Avios plus $338 in taxes/fees, with cash and points options ranging from there down to 4,550 Avios plus $438.
Here’s the same award using Iberia Plus — 13,000 Avios plus $320 with options ranging down to 3,250 Avios plus $445. The savings aren’t huge, but they’re there.
Here’s a British Airways business-class award on the airline itself for 50,000 Avios plus $521 on the same route.
While Iberia would charge you 50,000 Avios plus $442, a nearly $80 savings. But also take a look at the Avios plus cash options. Iberia would let you cut your Avios usage in half to pay just 25,000 plus $917.
The same option with BA Executive Club would be 25,000 plus $1,232. Now the savings are seriously higher.
British Airways would charge you 20,000 Avios plus $338 for an award in American Airlines economy on this route. When I called Iberia to see if I could book this award, they charged me the same, though taxes and fees were just around $300.
For an American Airlines business-class award, BA would charge you 60,000 Avios (the equivalent of peak pricing) plus $502. The same Iberia agent quoted me 60,000 Avios plus $484 in taxes/fees.
The price differences aren’t as significant as on Iberia’s flights, but you can still save yourself hundreds of dollars on an itinerary by booking through Iberia instead of British Airways.
There are plenty of reasons to consider redeeming Iberia Plus Avios over British Airways Avios. It’s easy to transfer points from Amex, Chase and SPG over to Iberia instead of British Airways. Plus, the airline introduced a new co-branded card with Chase with a sign-up bonus of up to 75,000 bonus Avios. And if British Airways is still one of your main mileage programs, you can easily transfer Avios between the two using the “Combine my Avios” function.
Iberia’s site is better at finding award availability on the airline’s own flights, and will certainly charge you significantly lower taxes and surcharges for awards on them than British Airways will. Even redeeming Iberia Avios for British Airways and American flights usually represents some savings. There are also sweet spots to be found where BA and Iberia’s off-peak dates do not quite match up.
Before redeeming either BA or Iberia Avios, be sure to search for the awards you want through both sites and see which one represents a better deal.
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