For years, we've considered booking Iberia business class between the U.S. and Madrid (MAD) for as low as just 34,000 miles each way one of the best deals in the world of points and miles. It's simply one of the best, most reliable ways to cross the Atlantic, period.
But those days are over. Without a word of warning, British Airways began raising award rates on these transatlantic awards sometime Tuesday, as Loyalty Lobby first spotted. Within a matter of hours, those hikes spread to awards booked using Iberia's own Avios, raising business class redemptions across the board – no matter the time of year:
- The cheapest, off-peak redemptions between Madrid and East Coast Cities like Boston (BOS), New York City (JFK), Washington, D.C-Dulles (IAD) that previously priced out at 34,000 miles each way are now charging 40,500 miles – a nearly 20% hike
- Peak season redemptions over summer or winter holidays from those same cities jumped from 50,000 miles each way to 59,000 miles – another 18% increase
- Off-peak awards from other cities like Dallas-Fort Worth (DFW), Miami (MIA), or Los Angeles (LAX) went up, too – in this case from the previous rate of 42,500 Avios to 50,500 Avios – a 19% hike
- Yet again, peak season redemptions increased from those farther-flung cities, going from 62,500 Avios each way to 74,000 Avios each way – an 18% increase
It's not all bad news. For starters, taxes and fees remain reasonable at about $124 each way. And economy rates didn't just escape unscathed – they actually got a bit cheaper: One-way redemptions from the East Coast to Madrid that previously cost as few as 17,000 Avios each way are now pricing out at 16,000 miles. Then again, these are now borderline basic economy fares that won't even get you a free checked bag.
Both the good and bad news also applies when redeeming Avios from Iberia itself.
Rates when booking through Iberia initially went unchanged, giving travelers one last chance to lock in a transatlantic trip in business class at the lower rates. But Iberia and British Airways are one and the same: They're both part of the same IAG (International Airlines Group) conglomerate and have standardized their award rates.
So lo and behold, Iberia is now also charging at least 40,500 Avios for a business class seat over to Spain or back.
This hurts … but it was only a matter of time.
While seemingly every carrier on the planet has raised award rates and excised sweet spots over and over again, the fact that this 34,000-mile redemption went untouched for as long as it did was was a shocker. Pair it with one of the frequent 20% or even 30% transfer bonuses to British Airways and Iberia from the big banks like American Express and Chase, and it gets even better: Just 27,000 credit card points for a business class seat over to Europe?!
That's why we pegged it as one of the points deals that are simply too good to last earlier this year. In this case, we really hate to say “We told you so.”
Assuming these increases hold and the new floor pricing is 40,000 miles and change, there's a silver lining: It probably could have been much, much worse.
Considering you can transfer credit card points from all the major banks like American Express, Chase, Capital One, and more – plus, you can easily combine Avios between the several airlines – getting the miles needed to book is quite easy. Any increase is painful, but we wouldn't have been surprised to see rates double.
Bottom Line
It was great while it lasted, folks.
Out of nowhere, Iberia and British Airways raised award rates on transatlantic Iberia business class redemptions from as low as 34,000 miles to at least 40,500 Avios each way. On the plus side, economy redemptions decreased slightly.
It's tough to celebrate any devaluation – we won't do that here. That said, for as good as this redemption was for years, we're surprised these hikes weren't even worse.
Iberia is so unreliable in the first place so no big deal. We had a nightmare experience with them getting to Seville from London Heathrow with a change in Madrid. Their user- easy website belies a shoddy, uncaring non-Iberia staffed experience at Madrid which causes many passengers in all classes to miss their connections. Last September, on a Platinum Card booking , they decided not to let us board our connection (the bay was still attached with people entering the plane) to Seville and closed the flight. Their initial flight from Heathrow—selected by them as a valid connection–had arrived nearly 45 minutes late. They changed our status to “no show” which meant that they did not have to take care of us or refund anything. This is against current EU regulations for all airlines. You should investigate this.