Foreign airline co-branded credit cards issued by American banks, #4: British Airways by Chase

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Continuing last week's series on the co-branded credit cards of foreign airlines issued by American banks, today's edition is the British Airways credit card issued by Chase.

British Airways by Chase

Chase issues one co-branded credit card that earns British Airways Executive Club Avios:

  • the British Airways Visa Signature card has a $95 annual fee (not waived the first year) and a tiered signup bonus: 50,000 Avios after spending $3,000 within 3 months, 25,000 additional Avios after spending $10,000 total within your first year and 25,000 additional Avios after spending $20,000 total with your first year. It earns one Avios per dollar spent everywhere except on British Airways purchases, where it earns 3 Avios per dollar. The card also earns a "Travel Together" ticket each calendar year you make $30,000 in purchases.

Travel Together Tickets

The Travel Together Ticket allows you to book two award tickets by paying the Avios cost of one ticket and the taxes and fees for both tickets. The only restrictions other than that are that travel must originate in and return to the United States, it must be exclusively on mainline British Airways flights, and there has to be award availability for both passengers. Other than that, you can fly anywhere British Airways flies.

Importantly, the Travel Together Ticket is earned on a calendar year basis, so it's possible to earn 2 Travel Together Tickets while paying a single annual fee (assuming you plan to cancel the card after the first year) by signing up for the card far enough into the year (for example, April) and putting $30,000 in purchases on the card in the first calendar year, then $30,000 more in the second calendar year. If you squint at this just right it seems like you're earning 2 Avios per dollar, since you can double the value of your Avios by redeeming them on a Travel Together Ticket.

Curiously, the terms and conditions of the offer include this language: "Once your Travel Together Ticket is issued, credits to your British Air credit card account will not cause forfeiture of your Travel Together Ticket" [emphasis mine].

The Travel Together Ticket has rightly earned a bad reputation due to British Airways' high taxes and fees ($250 in carrier surcharges in economy, $956 in business or first on a simple roundtrip between New York and London), and for simple, cheap trips you may find the Travel Together Ticket price and the cash price are nearly identical. Two paid economy New York-London roundtrip in May cost $1,130, while a Travel Together Ticket redemption would cost 26,000 Avios and $815, or just about 1.21 cents per Avios.

On the other hand, a business class Travel Together Ticket redemption between Seattle and London in August (the earliest I was able to find award space) would cost 150,000 Avios and $2,514, while two paid tickets would cost $8,093, giving you roughly 3.7 cents per Avios. If you earned 130,000 of those Avios by spending $30,000 on Chase's credit card, that's a $4,810, or 16%, rebate on your spend (this isn't the usual way I calculate these values — this is for illustration purposes only).

Ultimately, the value of the Travel Together Ticket comes down to your preferences and your alternatives. If you plan a special trip just because you've earned a Travel Together Ticket, then the ticket won't save you money, but instead will cost you many hundreds or thousands of dollars.

Meanwhile if you are already planning a trip, especially in a premium cabin, that requires travel on British Airways anyway, then the carrier surcharges and UK Air Passenger Duty are simply a fact of life. The only question then is whether fares are high enough and award availability good enough to justify redeeming Avios. If an Avios redemption is a good deal without a Travel Together Ticket, then it's certain to be an even better deal with one.

Earning British Airways Avios

Due to the tiered signup bonus, the Chase British Airways credit card has the equivalent of 4 different earning rates during the first year:

  • 17.67 Avios per dollar for the first $3,000 you spend;
  • 4.5 Avios per dollar for the next $7,000 you spend;
  • 2.8 Avios per dollar for the next $10,000 you spend;
  • and 1 Avios for each dollar spent above $20,000 (and in all subsequent years).

Redeeming British Airways Avios

British Airways has a distance-based award chart, so award flights can price out radically higher or radically lower than awards booked with zone-based loyalty programs. This creates a few popular sweet spots:

  • short-haul redemptions on partner airlines like American Airlines and Alaska Airlines in the United States;
  • short-haul oneworld partner redemptions, like on LAN within South America or on partner airlines within Southeast Asia;
  • long-haul redemptions at the upper end of a distance band. Aer Lingus awards between Boston and Ireland were a popular choice until Boston was artificially moved 8 miles west. Off-peak awards on Aer Lingus can still offer good value, however.

A less well-known sweet spot is British Airways' "two or more oneworld airlines" award chart, which offers awards based on the total distance traveled instead of calculating the Avios required for each segment. That award chart is particularly valuable for premium cabin redemptions, since business class and first class awards cost 2 and 3 times the cost of economy, respectively, instead of the 3 and 4 times charged on the standard Executive Club award chart.

For example, the 5,488-mile flight between Los Angeles and Tokyo would cost 25,000 Avios each way if booked in economy on American Airlines. Meanwhile, the roundtrip flight, at 10,976 miles, would cost 90,000 Avios on the two-or-more chart. However, the roundtrip distance band goes all the way up to 14,000 miles, which means for no additional Avios you can add up to 3,024 additional flights miles on another oneworld carrier. For example, flying on JAL to Seoul would use 1,566 of those miles. In economy you'd still be better off booking the award separately, since the two 783-mile segments would cost just 15,000 Avios roundtrip.

However, in business class the same itinerary (Los Angeles to Tokyo, Tokyo to Seoul, and back again) would cost 195,000 Avios on the standard award chart, while costing just 180,000 Avios on the two-or-more chart. Basically, for roundtrips at the top of a distance band on the two-or-more chart, premium cabin, multiple-segment redemptions are often cheaper than on the standard Avios redemption chart.

Is it worth it?

This card is great for anyone who regularly transfers Ultimate Rewards points to British Airways in order to book expensive, short-haul flights, or longer flights with relatively low fuel surcharges. For that person, this card offers the equivalent of 120,000 Ultimate Rewards points for $20,000 in spend. Even in the final stage of the signup bonus earning the equivalent of 2.8 Ultimate Rewards per dollar of unbonused spend is a good value compared to other unbonused opportunities.

Whether or not it's worth hitting the $30,000 threshold once or twice in order to trigger the Travel Together Ticket in your first two years is a much more individual judgment. Are you planning a trip on British Airways? Do you anticipate that there will be award availability on the entire itinerary for two travelers? Are you planning to book a premium cabin? Are paid flights expensive enough to justify redeeming Avios? If the answer to all those questions is yes, then the Travel Together Ticket provides a straightforward opportunity to save money. If not, then you're more likely to find the Ticket expiring before you come up with a worthwhile way to redeem it.