If you travel regularly for work or enjoy holidaying abroad, the right credit card could make a big difference. A rewards credit card which offers flight points could mean you cut flight costs – helping you save money on a holiday – or let you upgrade your seat for less.

There are several credit card providers offering airline or flight points as a reward for spending, such as American Express, Virgin Money and Barclays.

But which is the best credit card for flight points, such as Avios or Virgin Points? We break down the different options available right now, comparing what’s on offer, monthly or annual fees and any extra perks like airport lounge access or travel insurance.

What is an airline miles credit card?

An airline miles credit card is a type of reward credit card that lets you collect points on your everyday spending, which can then be used towards flights.

Once you’ve collected enough points or airline miles, you can typically redeem them – unlocking perks like free or reduced flights, seat upgrades, extra baggage, airport lounge access or even other travel expenses like hotel stays or car hires, depending on the provider.

Different airlines have their own schemes. The most popular ones are Avios, run by British Airways – which can also be used with BA’s partner airlines – and Virgin Atlantic’s Virgin points.

Are airline miles credit cards worth it?

Airline miles credit cards can offer lucrative rewards, particularly if you’re a higher spender or you travel often. They can make your journey more rewarding.

However, there are a few caveats. You can only redeem points with certain airlines or providers, and you will need to be flexible with your travel itinerary, as flights paid for with points tend to have limited availability, especially during peak travel times.

Keep in mind that you will have to repay your credit card bill in full each month, or you will be stung with high interest rates.

The best credit cards for flight points

Below, we round up the top credit cards for airline miles and reward points. We’ve done a breakdown based on annual cost, representative APR, welcome bonus and extra perks you can get.

American Express Rewards Credit Card

This is the most cost-effective travel reward credit card for customers, as it lets you earn points on your spending but has no annual fee. It comes with these perks:

• 10,000 Membership Rewards points when you spend £2,000 in your first three months. You don’t qualify if you’ve already had an Amex card in the past 24 months.
• Earn 1 point for every £1 spent on purchases.
• Earn 4,000 points for inviting a friend – provided their application is approved.

Membership Rewards points don’t have to be redeemed as flight points, but you have the option to transfer them to an Amex loyalty partner programme such as an airline’s frequent flier scheme.

For instance, 40,000 points could get you a return economy flight to Dubai with Virgin Atlantic. You can also redeem your points on eligible purchases at PayPal, Amazon, Boots, Currys, etc.

British Airways American Express Credit Card

Another cost-effective option is the British Airways American Express Credit Card. It doesn’t have an annual fee, and it lets you collect Avios on any purchases you make. Some of its perks include:

• 5,000 bonus Avios when you spend £2,000 in your first three months
• One Avios for every £1 spent on purchases.
• 1,000 Avios when you add the first Supplementary Card – an extra card issued to a family member or friend – to your account.
• Earn 4,000 points for inviting a friend – provided their application is approved.
• Get a companion voucher when you spend £15,000 each cardmembership year.
• Covered for Travel Accident Insurance of up to £75,000 on public transport.

You can redeem vouchers when booking a British Airways, Iberia or Aer Lingus Reward flight. We look at Avios-only flights and companion vouchers in a separate guide.

American Express Preferred Rewards Gold Credit Card

If you’re a frequent traveller and want more value for your money, the American Express Preferred Rewards Credit Card may be a suitable option. While it comes at a steep cost of £195 (£0 in the first year), it could be offset by the amount of points and rewards on offer. This includes:

• 40,000 bonus Membership Rewards points when you spend £5,000 in the first six months. This reverts to 20,000 points once the offer ends after 26 May 2026. You don’t qualify if you’ve already had an Amex card in the past 24 months.
• Earn three points for every £1 spent on Amex Travel, two points for every £1 spent directly with airlines, and one point for every £1 spent on eligible purchases.
• Four complimentary Priority Pass airport lounge passes a year at up to 1,300 lounges at airports around the world
• Get US $100 hotel credit when you book two or more nights with The Hotel Collection, which can go towards spa purchases, food and beverage, late check-out, room upgrades and more.
• Free Travel Accident Insurance up to £250,000 and Travel Inconvenience Insurance up to £200.
• £10 back per month on Deliveroo, or effectively £120 a year

American Express Nectar Credit Card

If you’re a regular Sainsbury’s shopper, you might find that the American Express Nectar Credit Card offers you the best value for money. It has an annual cost of £30, which comes in the second year, so you can trial the card for a year to see if it’s ideal for you. Here’s what you’ll get:

• 20,000 bonus Nectar points when you spend £2,000 in your first three months. You don’t qualify for this offer if you’ve already had an Amex card in the past 24 months.
• Earn 3 points for every £1 spent at Nectar partners, and 2 points for every £1 on purchases
• Invite a friend and earn 5,000 points if they are approved.

Nectar points can be converted into Avios – 400 Nectar points equal 250 Avios. This means the welcome bonus is worth 12,500 Avios.

Virgin Atlantic Reward Credit Card

If you fly with Virgin or are a banking customer of theirs, you may want to consider getting the Virgin Atlantic Reward Credit Card. It has no annual fee. The perks that come with this card include:

• 3,000 welcome bonus points when you make a purchase in the first 90 days.
• Until 18 May, earn another 3,000 Virgin Points if you spend £1,000 within 90 days of taking out the card. Make sure you link your Flying Club number to your credit card by 16 August to be eligible for the bonus.
• 0.75 Virgin Points for every £1 spent on everyday purchases, and 1.5 points for every £1 spent with Virgin Atlantic or Virgin Holidays.
• Get a flight upgrade or a companion ticket when you spend over £20,000 in a year.

We take a look at how Virgin Flying Club works in a separate guide.

Virgin Atlantic Reward Plus Credit Card

For higher spenders and frequent flyers, it’s worth checking out the Virgin Atlantic Reward Plus Credit Card, a premium version of the above reward credit card. The annual fee is £160, but this may be offset using Virgin Points. Here’s how you can earn them:

• 18,000 welcome bonus points when you make a purchase in the first 90 days.
• Until 18 May, earn another 18,000 Virgin Points if you spend £3,000 within 90 days of taking out the card. Make sure you link your Flying Club number to your credit card by 16 August to be eligible for the bonus.
• 1.5 Virgin Points for every £1 spent on everyday purchases, and 3 points for every £1 spent with Virgin Atlantic or Virgin Holidays.
• Get a flight upgrade or a companion ticket when you spend over £10,000 in a year.

Barclaycard Avios

If you fly British Airways and want to collect Avios, Barclaycard Avios may be a good place to start, considering it comes with no annual fee. Here are the perks you can get:

• Collect 5,000 Avios if you spend £1,000 in the first three months
• 1 Avios for every £1 spent on eligible purchases.
• When you hit £20,000 spent on your card within 12 months, you can choose between a British Airways cabin upgrade voucher to use on an Avios Reward Flight booking, or opt for 7,000 bonus Avios.

If you change from an existing Barclaycard to this one, you can still get 1,000 Avios when you spend at least £1,000 within three months.

For example, if you have collected 19,500 Avios points, by spending just £1, you can get a peak-time, economy return flight from London to Milan.

Barclaycard Avios Plus

For premium flyers and avid points collectors, the Barclaycard Avios Plus can mean you get more points and rewards on your travel. This is the most expensive card on the market, costing £20 monthly, or £240 annually. Here are perks that come with the premium card:

• Collect 25,000 Avios if you spend £3,000 in the first three months
• 1.5 Avios for every £1 spent on eligible purchases.
• When you spend £10,000 on your card within 12 months, you can choose between a British Airways cabin upgrade voucher to use on an Avios Reward Flight booking, or opt for 7,000 bonus Avios.
• Access to over 1,000 airport lounges worldwide at a discounted rate of £20.50 per lounge pass per person.

If you change from an existing Barclaycard to this one, you can still get 5,000 Avios when you spend at least £3,000 within three months.

For example, if you use 43,000 Avios points and pay £33, you can get a peak, Club Europe business-class return flight from London to Venice, Lisbon or Madrid.

Which is the best credit card for flight points?

If you’re new to credit cards and still want to make the most of your travel, you might want to trial a credit card with a £0 annual fee – or opt for an Amex Preferred Rewards Gold card, which is free for a year, to determine if the rewards are worth it.

If you’re keen on a companion voucher or flight upgrade without having to fork out hundreds, you can trial the Barclaycard Avios or the British Airways Amex card. We look at the best credit cards for airport lounge access in a separate guide.

According to Head for Points, the Virgin Atlantic Reward Plus Credit Card is “clearly the best deal” in the first year, given the boosted bonus. “36,000 Virgin Points easily offsets the £160 annual fee for the first year. More importantly, once you have the Reward Plus card, you are earning the superior 1.5 points per £1 whenever you shop. You also trigger the annual voucher more quickly.”

However, consider if you’re likely to use Virgin points before you apply. If you typically fly with British Airways instead, collecting Virgin points might not be right for you.

As per Which?, the Virgin Atlantic Reward Plus Credit Card is the most competitive, but its free version is more cost-friendly. The American Express Rewards Credit Card is a ‘best buy’ due to its zero annual fee and flexibility.

However, it’s worth remembering that based on your needs and preferences, one card could be more suitable than the other – so if you value premium services, you might be comfortable paying more to get value for money.

British Airways has launched new Avios-only flights, offering more opportunities to redeem your Avios points.

Avios is a major loyalty programme with airlines British Airways, Iberia and Aer Lingus all signed up. Under the scheme, you receive points when buying flights, spending with certain retailers or if you’ve got an affiliated credit card. These points can then be redeemed on flights, holiday extras and more.

A popular way to spend Avios points is via reward flights. On these flights, you pay with your Avios points, as well as a cash amount to cover taxes, fees and carrier charges.

British Airways introduced Avios-only flights in 2023, which members of The British Airways Club can book as reward flights. So far, there have been around 50 Avios-only flights, with destinations including the Middle East, Caribbean and Africa.

How exactly do these flights work and who is eligible? We reveal everything you need to know below.

What are Avios-only flights and who is eligible?

British Airways typically allocates a certain amount of seats on its flights to customers with Avios points to redeem as “reward flights”.

On flights to and from Heathrow and Gatwick, the airline guarantees eight seats in economy, two in premium economy and four in business class.

For flights to and from London City Airport, four reward seats are guaranteed, with two in business and two in economy.

However, since 2023, British Airways has released Avios-only flights where 100% of seats are available to British Airways Club members collecting Avios points. You can use some cash to cover the cost of these flights, but a fixed amount of Avios points has to be redeemed.

The flights are often to popular holiday destinations and run at peak times of the year, offering those with Avios points greater priority.

British Airways says Avios-only flights always sell out to customers with Avios due to their popularity.

Where do Avios-only flights travel to?

Previous Avios-only flights have gone to places across Europe, the Caribbean, Africa and the Middle East, including Cape Town, Barbados, Sharm El Sheikh, Málaga and Marrakesh. In February, British Airways announced two more Avios-only flights, from London City Airport to Madrid and Toulon Saint-Tropez.

You can find out where you can travel to on the British Airways Club website or via the Avios app.

In June, two additional flights from London Heathrow to Tenerife and Reykjavik were added for those planning to travel over the October half-term break. All Euro Traveller seats are available from just £5 and 33,500 Avios return, or £40 and 60,000 Avios return with Club Europe, including checked luggage.

More recently, a limited-edition Avios-only flight was launched for those travelling from London Heathrow to New York JFK on select dates in October 2026. Seats are available exclusively to BA Amex cardmembers, who can register their interest in booking the flight up until 24 June. It will cost £0 in every cabin and between 25,000 and 160,000 Avios for the flight, and those travelling in first class will receive a complimentary BLADE helicopter transfer between JFK and Manhattan upon arrival.

When and how can you book Avios-only flights?

British Airways announces new Avios-only flights on its website and via the Avios app. You can book one-way and return journeys on the website and via the app.

Reward flights can be booked through a British Airways Club account or by calling the contact centre on 0344 493 0747 (if calling from the UK).

Seats are sold on a first-come, first-served basis and often sell out fast.

In May, reward flight prices went up, which means flyers will have to fork out more cash for booking Avios-only flights.

For instance, a one-way trip in Club Europe from Heathrow to Rome will now cost £20 and 22,000 Avios. Before 27 May, this was £15 and 22,000 Avios, British Airways said.

Can you use American Express companion vouchers for Avios-only flights?

American Express British Airways companion vouchers can be used when booking Avios-only flights as well as regular flights. They effectively double the value of your Avios.

How does the companion voucher work?

When you book a reward flight for two people, the voucher lets you take someone with you on the same flight and in the same cabin for no extra Avios. While you won't need to use additional Avios, you will need to pay any applicable taxes, fees and charges for both travellers.

Alternatively, solo travellers can use half of the Avios required for one person, with the companion voucher. They will still need to pay the taxes, fees and charges.

Cardmembers can now also redeem their companion voucher when booking with British Airways Holidays using Avios to pay or part-pay, and get 25% Avios back. This offer is available on holiday package bookings made before 31 March 2027.

Can you cancel Avios-only flights?

Yes, Avios-only flights can be cancelled up to 24 hours before departure for a full refund, although you will be charged a £35 fee.

If you cancel within 24 hours of your outbound journey, and you’ve paid the taxes, fees and charges, these are refunded to the account used to book. For bookings made using Avios and money, the cash portion of the price isn’t refunded.

A £35 service fee is also charged if you change your flight date. If the new date costs more, you will have to use additional Avios points, and if it costs less, you will receive the difference in Avios points back.

British Airways (BA) introduced changes to its tier points loyalty programme on 1 April 2025. The airline’s reward scheme gives frequent flyers access to a host of travel perks.

Under the new scheme, you can also unlock bonus Avios rewards, which you can use to book flights or as part-payment for when you go on holiday.

We look at how Avios points work in a separate guide. Here, we explain how the new BA tier points system works, and how you can make the most of it to save on holiday.

What are BA tier points?

Tier points are a type of reward scheme for BA customers that allow them to unlock rewards by flying and spending money with the airline.

Rewards can include free seat allocation, priority check-in and boarding, extra baggage allowance and lounge access.

When you set up your account with The British Airways Club, you will start at the most basic ‘Blue’ tier. Loyal customers can climb up to the top ‘Gold’ tier. As you enter new tiers, you will be given access to more and better rewards.

Tier points are different to BA’s Avios scheme.

BA tier points automatically reset to zero once a year on 30 April, which is known as the end of the membership year. If you joined a certain tier in one year, you will remain a member of that tier for the next year, even after your benefit period ends.

For example, if you achieved the ‘Silver’ tier in one membership year, you will be able to access the benefits of that tier for the following 12 months, regardless of the membership year ending.

How does BA’s new tier points system work?

If you fly with British Airways in any capacity at all, you are automatically eligible to start earning BA tier points – you just need to set up an account with the airline.

You can earn tier points by booking any eligible flights, BA’s package holidays, or with a BA American Express card.

We explore the options below.

Earning BA tier points on flights

Using your unique account code, you can earn tier points based on your flight’s eligible spend – this includes the ticket price and any money you spend on seat selection, extra luggage, and seat upgrades. It does not include any taxes or non-carrier-imposed fees you may incur.

For every £1 of eligible spend on your flights, you will be rewarded with one tier point.

Additionally, as part of a limited-time offer, customers who register and book flights by the end of 2025 that depart before the end of 2026 are also given bonus tier points depending on the cabin class they fly in.

BA provides an example of a flight from London to New York in their World Traveller Plus cabin. A return flight costs £1,418, making the eligible spend £1,120 after taxes and other non-carrier fees are removed.

As the flight is in the World Traveller Plus cabin, you will be given an extra 550 bonus tier points if you book a flight that departs before the end of 2026. You could therefore earn 1,670 tier points on your purchase – made up of 1,120 from the eligible spend plus 550 bonus points.

A full list of the bonus BA tier points you can claim, depending on your cabin class, can be found below:

Earning BA tier points on a package holiday

Under the new system, you can also earn tier points with BA’s package holidays, meaning customers can accrue more points faster.

You now earn one tier point for every £1 spent on the total price of a British Airways Holidays “Flight + Hotel” and “Flight + Car” booking, with the calculation based on the total amount paid before travel — not on any charges payable at the accommodation.

There is no minimum time requirement to earn the points, so you can get your tier points on a short weekend trip or a long holiday.

Tier points are split evenly between the number of people on the booking (excluding infants under two years old).

BA gives the example of a £5,448 flight + hotel package for two people. This value is divided by the two travellers, so each one gets 2,724 tier points. If you have registered for BA’s bonus offer, you will also be granted 550 bonus tier points per BA Club member, bringing the total points per person to 3,274.

Earning BA tier points with your credit card

BA American Express Premium Plus Cardmembers can earn up to 2,500 tier points by spending on their card – as long as they enrol before 25 January 2026. The offer ends on 1 February 2026, after which you won’t be able to earn tier points with your Amex card.

Here’s how much you can earn:

You can only earn a total of 2,500 tier points through this deal.

The card has an annual fee of £300. We explain the differences between different American Express credit cards in another guide.

What’s the difference between BA tier points and Avios?

Both tier points and Avios are reward schemes for British Airways customers, with consumers able to accrue points when they travel with the airline.

While you can collect Avios and BA tier points, they are separate schemes and serve two different purposes.

• Tier points are used to unlock new benefits when you fly with BA, such as free seat allocation or access to business lounges.
• Avios acts more like an extra currency that you earn as you fly more with BA. You can use your Avios points to deduct some money from the cost of a flight and bring your ticket price to a minimum of £1.

What benefits do British Airways tier points offer?

The type of benefits available depends on the tier – the Blue Tier has the fewest perks, with higher tiers offering more.

Blue Tier

The benefits of being a Blue Tier member are:

• Collecting, purchasing, gifting and combining Avios
• Sharing Avios through a household account
• Transferring Avios (free for Gold members, a fee applies for other tiers)
• Member-only offers
• Reward Flights
• Access to the Avios mobile app
• Priority waitlist
• Free Wi-Fi messaging onboard

Bronze Tier

As well as the benefits outlined in the Blue Tier level, Bronze members get:

• Free seat selection seven days before departure, except for group rate bookings and exit row seats on long-haul flights
• Priority check-in (excludes London City Airport)
• Priority boarding (excludes London City Airport)
• Status freeze for maternity / paternity / adoption
• 5% discount on almost all purchases at The Wine Flyer

Silver Tier

In addition to Bronze and Blue benefits, Silver Tier members can enjoy:

• Additional baggage allowance (baggage benefits do not apply to hand baggage only (Basic) fares)
• Lounge access when flying with British Airways and our partner airlines
• Reservation Assurance
• 10% discount on almost all purchases at The Wine Flyer

Gold Tier

As well as all the other benefits in the other tiers, Gold Tier members get:

• 15% discount on almost all purchases at The Wine Flyer
• First class check-in and boarding
• Access to First lounges
• Extra baggage allowance of 32kg per checked bag in any travel class for everyone on your booking
• Free seat selection for everyone on your booking in the same flight and travel class
• No booking or service fees for priority reward bookings
• Gold priority reward
• Additional Reward Flight availability in economy
• Gold upgrade for two vouchers (at 35,000 tier points in one year)
• Two gold upgrades for one voucher (at 50,000 tier points in one year)
• One Gold British Airways Club partner card and two Silver member cards (at 65,000 tier points in one year and 40,000 tier points thereafter)
• Concorde Room access (at 65,000 tier points in one year and 40,000 tier points thereafter)

How BA tier points can unlock bonus Avios rewards

From April 2025, BA introduced a new milestone bonus, where you can earn extra Avios points when you hit a certain amount of tier points. You can then convert these bonus points into savings on your next Reward Flight or use as a part-payment for an upcoming holiday.

The milestones are as follows:

If you’re an eager holidaymaker looking to fund your holidays in the most rewarding way, the popular Avios scheme might be looking even more inviting to you now. 

British Airways (BA) loyalty members know too well the perks of collecting Avios points through American Express credit cards or Barclaycard and making their holiday funds go a long way.

For many years, BA has let customers pay using Avios to reduce the cost of cash flights. But things are set to change soon. Now, BA Executive Club members can pay for all BA cash flights using Avios for just £1. 

Despite the recent hike on American Express BA cards and changes to the Amex companion voucher scheme, many still find that it pays to have premium, and this might just seal the deal for avid travellers. 

We look at what has changed in the BA Executive Club membership, how much you can save and whether it’s worth joining the loyalty scheme. 

British Airways lifts Avios part-payment restrictions – what’s changing?

In a big move, British Airways customers can now spend all of their Avios to pay for cash flights for a nominal fee of just £1. 

BA said the change will give customers more flexibility when spending their Avios and enable them to choose from any of its flights available for just a quid, regardless of the seat type.

Avios is a loyalty points scheme where you can use the points you earn to cut the cost of your travel – be it flights, hotels or even car hires. To collect Avios, you need to be a member of BA’s Executive Club which is free to sign up for. 

Previously, the Avios part-payment scheme was restricted to certain routes and timings, and just last year BA announced Avios part-payment on holiday package bookings starting from just £1. Now, the restrictions have been lifted down to the last penny to allow members to get large cash discounts. 

Colm Lacy, BA’s chief commercial officer said: “We know that most of our customers choose the lowest cash amount when it comes to making Reward Flight bookings, so we anticipate this to be a popular option for those using Avios part payment too”, adding that their goal is to keep “adding more choice and flexibility” for members. 

How much can you save with Avios?

How much you save depends on how much Avios balance you have. The more Avios you have, the more cash you’ll save, and ultimately be able to bring down the amount to £1. 

For example, if a flight to New York was £500, you could potentially shave off up to £499 simply by increasing the amount of Avios you’d like to contribute to the booking. 

But this will be different for everyone, depending on what cabin, carrier, route and date you book for. 

Source: Head for Points

It’s worth noting that Executive Club members are still able to collect Avios and tier points on any flights they book using cash and Avios. The part-payment system also works for flights operated by American Airlines between the UK and North America and BA codeshares with select partners.

Is this a good deal?

For those who are frequent air travellers and Avios points rich, this is a great deal that brings more flexibility and choice around how you squeeze out maximum value from Avios while making your holiday budget work hard. 

It also gives travellers a way to spend more points in exchange for lower taxes and airline fares, meaning that Avios collectors can use more points on bookings than ever before. 

But this new scheme has also been met with mixed reviews. Jordan Waller, managing editor at American travel site The Points Guy, says, “On the one hand, this is a good move that will appeal to some Executive Club members; however, compared to standard reward fares, it will likely not provide great value as a redemption.”

Rob Burgess, founder of FCA-regulated British travel site Head for Points says, “[T]here are plenty of people out there who don’t fully understand how to get full value for their Avios, and BA has now made ‘Part Pay’ more attractive and easier to understand for this group.”

How to make the most of your Avios 

There are many ways you can still make the most of your Avios, such as through the BA Amex card which comes with an initial bonus that is more than enough for a Europe flight. 

Or, that same spend would result in you racking up a lot more points if you go for the BA Amex Premium Plus card, and would cover a far longer journey, for example to the Caribbean or South Asia. 

If you want to boost your Avios using other ways, there are other options too such as BA’s e-store, which includes retailers like John Lewis, M&S and Selfridges, where any money you spend is tracked and you earn Avios accordingly. 

A companion voucher is an exclusive benefit offered to American Express British Airways (BA) credit card customers.

The voucher lets you boost the power of your Avios points when you book a BA reward flight.

A BA reward flight means a flight booked with Avios as the main payment method – depending on how many points you have, your flight could cost you as little as £1 in cash.

Avios points and the BA companion voucher are different to British Airways tier points, which we look at in a separate guide.

What is a British Airways American Express companion voucher?

BA Amex companion vouchers allow cardmembers to effectively double the power of Avios points when purchasing reward flights.

This can be done in one of two ways:

• Travelling with a companion: You can use a companion voucher to take someone with you on the same flight and in the same cabin without spending any extra points.
• Travelling alone: You can use a companion voucher to discount the Avios price of your reward flight by 50%.

If you choose to bring a companion along by using a voucher, you will not need to spend any additional Avios points, but you will need to pay any applicable taxes and other flight charges.

Customers travelling with a companion who have multiple vouchers can use a maximum of two of the same type on one reward flight booking. This amounts to a maximum of four passengers (excluding infants under two years old).

Solo travellers can only use a maximum of one voucher per booking.

Use a companion voucher with BA Holidays

British Airways Amex card holders who book with British Airways Holidays using Avios points (either full or part payment) can now redeem their companion voucher on the package, to get 25% of the Avios back.

The offer is available on holiday package bookings made before 31 March 2027.

British Airways American Express card members can get up to 50,000 Avios back per booking, while British Airways American Express Premium Plus cardmembers can get up to 200,000 Avios back per booking.

In order to redeem the voucher, you will have to submit an online form within 72 hours of booking via BA Holidays.

25% of the Avios used will then be credited back to your BA account. For instance, if you put 40,000 Avios towards a holiday in Rome, 10,000 would be returned to your account.

When using a voucher on a reward flight, customers must fly on the outbound flight before the voucher expires. However, with this offer, the voucher only needs to be valid at the time of booking – letting customers travel on their BA holiday after the companion voucher expires.

How do you get a BA Amex companion voucher?

To earn a BA Amex companion voucher, you must spend £15,000 on your participating BA Amex card in a given year.

The current cards eligible for companion vouchers are the British Airways American Express Credit Card and the British Airways American Express Premium Plus Card.

You are only able to earn one companion voucher per year.

Companion vouchers earned with the British Airways American Express Credit Card will be eligible for 12 months after they are earned.

Meanwhile, companion vouchers earned with the British Airways American Express Premium Plus Card will be eligible for 24 months after they are earned.

Note that you cannot earn a companion voucher if you spend the required amount on a different Amex card.

For a full rundown of all of Amex’s available cards, read ‘Which is the best American Express credit card?’.

What are the different types of companion vouchers?

The type of companion voucher you have depends on when and how you earned it.

Companion vouchers earned through the British Airways American Express Credit Card after 1 September 2021 are displayed on your British Airways Club account as 'BA American Express Credit Card Companion Voucher'.

Meanwhile, companion vouchers earned through the British Airways American Express Premium Plus Card after 1 September 2021 will be displayed as ‘BA American Express Premium Plus Companion Voucher'.

Finally, if you earned your companion vouchers before 1 September 2021, they will be displayed in your account as 'BA American Express Companion Voucher'. These have different terms, validity, and benefits than the others. BA says more information about these can be found at ba.com/amex-companion.

You cannot combine two different types of companion vouchers in one booking.

How to redeem a BA Amex companion voucher

Once you have spent the required £15,000 on your eligible BA Amex card, you will be able to see your voucher displayed in your British Airways Club account.

You can then redeem it by going to ba.com/bookwithavios and signing in. You can then select your voucher at the top of the page and choose your destination and dates.

You can then look through the available flights, choose them, and book your tickets.

If the companion voucher is used on a reward flight, the outbound flight would need to be taken within the eligibility period, before the voucher expires.

Most retail-rewards schemes are not very useful unless you are a regular customer with sound reasons for being loyal. You typically accumulate tiny numbers of points that can only be used at the company that issues them. If you allow collecting points to influence your shopping decisions instead of going with the best price or service, you’re likely to end up spending more overall. But there are a couple of schemes – or more accurately, two pairs of linked schemes – that can be a lot more useful.

Rewards Cards for Avios

The slickest is Nectar, run by supermarket chain Sainsbury’s, and Avios air miles run by IAG, the parent of British Airways. These are closely linked: Avios can be swapped into Nectar at a rate of 300 Avios to 400 Nectar or vice versa at a rate of 400 Nectar to 250 Avios. Note that because these rates are different, going from one to the other and back again loses you money.

You earn Nectar points at a rate of one point per £1 spent at various outlets (the most useful are Sainsbury’s, Argos, eBay and Esso), but also by clicking through from the Nectar website when buying at a number of other companies. You collect Avios from flying with BA and other airlines, and by going via the BA shopping website. There are also several credit cards that pay rewards in Avios or Nectar points, while other companies sometimes offer a few thousand points of one or the other as a sign-up bonus.

There are various redemption options, but three stand out. First, Nectar points can be used at Sainsbury’s or eBay at a value of 0.5p per point. This puts a cash floor on the value of Nectar, and thus one of 0.67p on Avios. This creates some quirks: Sainsbury’s own Nectar credit card (one point per £5 in most places) is dire compared with the free Barclaycard Avios credit card (one Avios per £1 everywhere), which is in turn the best cashback rate of any free UK credit card. Second, 350 Nectar points gets you a drink of any size at Caffè Nero – at least 1p per point. Last, well-timed redemptions of Avios for long-haul premium flights can easily beat that.

Rewards Cards for Virgin Points

The other is Tesco Clubcard and Virgin Points. You earn Clubcard points at Tesco (one point for £2) and a few other places (such as Esso garages with a Tesco Express store). These swap into Virgin Points (Virgin Flying Club air miles and Virgin Red rewards are interchangeable) at a rate of 1:2.5 (falling to 1:2 in July), but you can’t go from Virgin to Clubcard.

You earn Virgin points from Virgin Atlantic and other airlines, Virgin Atlantic credit cards, via Virgin’s shopping portal and by booking train tickets via Virgin. Both Clubcard and Virgin have many redemption options and Clubcard’s can often be the best value of all the schemes (1p per point in Tesco, but three times that at many partners – falling to twice next month). But the inability to go from Virgin to Clubcard makes this less useful unless you shop often at Tesco and can amass a lot of points.

The Avios reward scheme, pioneered by British Airways, is considered by some to be one of the best reward schemes in the world mainly due to its flexibility. There are lots of different ways to collect Avios points, and there are lots of different ways to spend them as well, from flights, hotels, car hire, and online shopping.

What’s more, points can be used across a range of airlines and holiday providers - you’re not limited to British Airways (BA). A Barclaycard Avios Card is a great way to pick up Avios points with day-to-day spending.

The new bonus offer from Barclaycard

Barclaycard has two Avios products, an Avios Card and an Avios Plus Card, and from the 17th April 2023, the company has doubled the welcome bonus for those applying for either by the 30th May 2023.

The Barclaycard Avios card is the standard offering but it still has some fantastic features:

• If you apply by 30 May 2023, you’ll collect a double welcome bonus of 10,000 Avios (usually 5,000 Avios) if you spend £1,000 in your first three months. New customers only. T&Cs apply
• Collect 1 Avios for every £1 spent on eligible purchases, with no monthly fee.
• Spend £20,000 on the card within 12 months and you’ll receive a British Airways cabin upgrade voucher to use on an Avios Reward Flight booking. T&Cs apply.
• Get up to five months of Apple TV+, Apple Music, Apple Fitness+, Apple News+ and Apple Arcade for free with your new Barclaycard. Continues as paid subscription after trial. UK only, T&Cs apply.

Representative example – most accepted customers get

• 28.9% APR representative (variable)
• 28.9% purchase rate p.a. (variable)
• Based on a £1,200 credit limit
• £0 monthly fee

The approval of your application depends on your financial circumstances and borrowing history, so do the terms you may be offered. Eligibility and conditions apply.

The Barclaycard Avios Plus card comes with a much bigger Avios bonus and you can earn more points with spending:

• Collect 1.5 Avios for every £1 spent on eligible purchases, with £20 monthly fee.
• Spend £10,000 on the card within 12 months and you’ll receive a British Airways cabin upgrade voucher to use on an Avios Reward Flight booking. T&Cs apply.
• Airport Lounge Membership – access over 1,000 airport lounges worldwide at a discounted rate of £18.50 per lounge pass, per person.
• Get up to five months of Apple TV+, Apple Music, Apple Fitness+, Apple News+ and Apple Arcade for free with your new Barclaycard. Continues as paid subscription after trial. UK only, T&Cs apply.

Representative example – most accepted customers get

• 78.9% APR representative (variable)
• 28.9% purchase rate p.a. (variable)
• Based on a £1,200 credit limit
• £20 monthly fee

The approval of your application depends on your financial circumstances and borrowing history, so do the terms you may be offered. Eligibility and conditions apply.

Enjoy flights, hotels and more with Avios

You can spend your Avios on all kinds of travel experiences. Here are some examples of where your Avios could take you:

• 18,500 Avios + £1 for an off peak, economy return flight for one passenger from London to Milan*
• 23,500 Avios + £1 for an off peak, economy return flight for one passenger from London to Barcelona*

*Plus £1. Reward Flight Saver fares offers a fixed cash and Avios amount and are subject to availability. Other pricing options are available. All tangible examples accurate as of January 2022. With Avios, you can explore your favourite destinations on other ways too by spending your Avios on car hire or hotels. Check your eligibility here

Disclaimer

The approval of your application depends on your financial circumstances and borrowing history, so do the terms you may be offered. Eligibility and conditions apply. 10,000 Avios welcome bonus, usually 5,000, when you spend £1,000 in the first 3 months. Barclaycard

Avios for the 10k and Barclaycard Avios Plus for the 50k Avios welcome bonus, usually 25,000, when you spend £3,000 in the first 3 months.

New customers only. Offer ends 30 May 2023.T&Cs apply

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France’s nuclear power plants have been closed for maintenance over much of the summer. In a blow for its defence industry, Australia cancelled a huge submarine order. And its car manufacturers suffered a blow when Renault was forced to sell its Russian unit. This has not been a great few years for French industrial policy. Yet, undeterred, its leaders are eyeing a lucrative new target: a virtual monopoly on European air travel.

Over the last week it has become clear that France is determined to create a major new force in global aviation. It emerged that the Italian government has chosen a group led by the private-equity firm Certares, and crucially backed by Air France-KLM, to take a majority stake in ITA, the national flag-carrier rescued out of the bankrupt and little-missed Alitalia.

The Italian government turned down a rival offer backed by Lufthansa, and the takeover may well be completed over the next few months; it has enough problems on its plate without hanging on to a struggling airline for any longer than necessary.

France is pulling the strings

It is the involvement of Air France that is most interesting, however. You hardly need to be Sherlock Holmes to work out what is about to happen: Air France has already orchestrated a merger with the Dutch airline KLM; now it is intent on taking creeping control of ITA.

Behind the scenes, French president Emmanuel Macron and his government are clearly pulling the strings. Only last year, France massively increased its stake in the airline, and it now owns 29% of the group, three times the Dutch government’s shareholding. The airline received massive bailouts to help keep it afloat during the pandemic. Now the plan appears to be to add Italy to its growing empire. Who’s next? Perhaps one or two of the smaller European airlines, or even another major national player.

The prospect is of France creating a protected EU flag carrier under effective state control, with a virtual monopoly on European travel. Once that is established, we can expect the British Airways owner IAG, along with its Spanish partner Iberia, to be frozen out of the market. Germany’s Lufthansa, which was beaten out of the bidding for ITA, will be left with little more than its domestic market to serve. And the budget airlines such as Ryanair will find life tougher and tougher, excluded from prime landing slots and left to serve a tourist market at secondary airports.

We will be right back with a 1970s-style airlines industry, with big prestigious state-controlled carriers dominating the business and long-haul markets, and charging sky-high prices, along with a few cheap carriers for everyone else. That might be profitable for France – although the state-controlled airlines of the 1970s were inefficient and kept alive only with massive subsidies from their governments – but the question is, why should this be tolerated by anyone else? So far, the EU’s competition authorities, so fierce when it comes to regulating the US tech giants, or policing rivalry with the City of London, are sitting on their hands.

The world must react

There’s no point expecting them to curb Air France or its ambitions to dominate the European market. But that is no reason for the rest of the world to put up with it. Under World Trade Organisation rules, the UK could take legal action against the airline. The US could demand a stop to it and threaten to retaliate with selective tariffs. Or a group of the other major economies around the world could place restrictions on its landing slots unless the market were opened out.

Macron Air, as it should probably be known, would change the way the whole industry operates. It would raise prices for consumers, simply by setting benchmarks and by controlling so many of the major airports. And it would raise the prices of planes, too, since it would always buy Airbus rather than Boeing, making equipment more expensive for everyone else.

The relatively free, open and deregulated airline industry of the past 30 years would effectively be brought to an end. This should not be allowed to stand.

Travellers around the world are struggling with post-pandemic disruption at airports. The worst of it is here in Europe, creating chaos for millions of Britons desperate for a holiday. While Asia’s travel industry is still navigating Covid-19 and America suffers from a shortage of pilots, it is Europe where various kinds of turmoil have “converged to inflict maximum pain on consumers”, said Bloomberg.

Last week, Heathrow announced a daily cap of 100,000 on passenger numbers until 11 September. Emirates, the Dubai-based airline, blasted it for fomenting “airmageddon”.

London’s airports are among the worst affected in Europe. Between the start of April and the end of June, 8,200 flights were cancelled at Heathrow and 6,800 at Gatwick. That compares with 8,600 at Frankfurt and 6,400 at Munich. But outstripping them was Amsterdam’s Schiphol airport, with 14,200 cancelled flights.

Meanwhile France, Spain, Italy and Portugal are all doing relatively well, says aviation-data group OAG.

What’s causing the problems?

The chaos is down to “tourism rebounding unexpectedly fast” and crashing into an underprepared aviation industry, says The Economist. Deprived of holidays for years, people are “revenge travelling” and the weak euro is helping to boost demand from outside the eurozone.

The disruption to aviation is a highly visible example of a wider structural issue: businesses struggling to get fully staffed owing to near-full employment across Europe. The same problems seen at airports are also evident in care homes, hotels and “other places that need a lot of unskilled staff. They simply get less attention.”

Unemployment is at 6.6% in the eurozone, the lowest since the single currency was launched two decades ago. In Germany it is just 2.8%. The willingness of Poles or Bulgarians to fill the gaps has slumped, since they can now find plenty of good jobs at home.

Any other factors?

The disruption has been exacerbated by a series of strikes. Soaring inflation and pay demands have in recent weeks seen strikes involving everyone from firefighters and air-traffic controllers to cabin crew, cleaners and baggage handlers – across European countries from Scandinavia to Italy.

In addition, Russia’s war in Ukraine is a factor in restricting available airspace across the continent. According to Lufthansa, the war is causing bottlenecks in the skies that have contributed to flight delays and disruption.

All these factors have left airlines and airports struggling to meet demand, especially those airlines, including British Airways and Lufthansa, that slashed their workforce at the start of the pandemic. The German carrier cut around a third of its workforce to 100,000 people at the height of pandemic restrictions, leaving it short of cabin crew, ground staff and pilots as demand for travel recovers.

“Did we drive some savings too hard? No doubt,” said CEO Carsten Spohr earlier this month, as he announced 3,100 cancellations for July and August, or around 4% of Lufthansa’s capacity at the summer peak.

Which workers are needed in particular?

A chief cause of delays and cancellations is a shortage of ground-handling workers, said Bloomberg. It’s physically demanding work involving unsociable hours for poor pay. German ground staff typically start on about €20,000 a year – not enough to fill the gaps when the labour market is tight and there are easier options available.

“Everyone’s asking, where have they all gone? And the answer is always: Amazon,” says Sir Tim Clark, president of Emirates.

Why is the UK one of the worst affected?

In part because our Covid travel restrictions were relatively long-lasting and unpredictably stop-start compared with other European countries’ measures.

According to the Annual Population Survey, the number of full-time “air-travel assistants” (this includes cabin crew and check-in staff) almost halved from 40,100 in 2019 to 20,500 in 2021. Meanwhile “air-transport operatives” (including staff who refuel aircraft and handle baggage) fell by more than half, and air-traffic controllers slumped by 28%.

BA and easyJet also say that uncertainty over Britain’s furlough scheme, which was extended on an unpredictable rolling three-month basis, made it harder to plan. They have also complained about the slow and lengthy security checks for new workers.

Who’s coping well?

One of the relative success stories of the past few months is Ryanair, not typically known for good customer service, says Jim Armitage in The Sunday Times. Last month easyJet cancelled 741 flights from UK airports and British Airways 421, but Ryanair scrapped just 25.

How has the airline managed it? By furloughing more staff, and doing a deal to keep people on through the pandemic on reduced pay rather than slashing headcount. It was a calculated risk that now means the carrier is “gaining a new reputation among travellers as the most reliable post-Covid airline”.

How is the sector doing more broadly?

Not very well. Shares in major airlines (as measured by the Bloomberg World Airlines index) have fallen 25% since February. Once the disruption stabilises, the world’s biggest carriers will have to “work to deleverage their balance sheets from billions of dollars in debt accumulated during the crisis”, says the Financial Times. Together, ten big US and European airlines have built up $193bn in gross debt over two years, up from $109bn in 2019.

“There is no quick fix,” says Izabela Listowska of S&P Global Ratings. Some smaller airlines have already stumbled: SAS has just filed for bankruptcy protection. But for survivors, the surge in demand means that cash is flowing back, and industry-wide losses are forecast to fall to about $10bn this year, with profitability possible in 2023, according to Marie Owens Thomsen, chief economist at the International Air Transport Association.

The IAG (LSE: IAG) share price is a bellwether for the global travel industry.

Shares in the airline group, which owns British Airways and Aer Lingus among others, have jumped around over the past two years as investors have tried to second-guess when the travel market will recover from the pandemic.

After more than two years, it looks as if IAG is finally starting to get back on track. It’s aiming to fly at 80% of pre-pandemic capacity this year (assuming demand holds up), according to its latest trading update.

What’s more, management reckons the company will turn a profit in the second quarter, a huge step in the right direction. If IAG returns to profit, it should remove any question marks over its ability to continue as a going concern – for the time being at least.

IAG’s North American routes are its cash cows

IAG’s portfolio of airline brands gives it scale, while it also has a strong foothold in the key North Atlantic travel market.

The transatlantic route between London Heathrow and JFK New York is the jewel in IAG’s crown. It is the fourth-most active route in the world, and the most profitable. However, over the past two years, stop-start travel restrictions have hammered demand.

Management plans to ramp up capacity to 100% on the route by the third quarter, indicating that demand is returning faster than in other areas. A “strong” return in business travel is helping power the recovery.

As IAG’s main focus is North America and other long-haul destinations, the war in Ukraine has not affected it directly, although it is reporting significantly higher fuel costs as a result of higher oil prices.

The optimistic outlook implies that IAG is starting to draw a line under two years of losses and uncertainty. But it’s not all good news.

IAG is carrying a heavy debt burden

Capacity issues at Heathrow are forcing management to slow its growth plans. The firm was planning to fly 85% of capacity this year; its target is now 80% – not for lack of demand, but for lack of infrastructure. Instead of increasing capacity as fast as possible, management is now focusing on “enhancing operational resilience”.

And while IAG expects to return to profit in the second quarter, it lost money in the first. It recorded a loss of €800m in the first three months of 2022, slightly better than the €1.1bn recorded for the same period last year.

It also ended the period with interest-bearing debt of €20bn, a huge drag on the balance sheet. The cost of sustaining borrowings totalled €233m in the first quarter alone.

The airline industry has some major structural challenges

IAG’s size and transatlantic routes are solid competitive advantages, but the company is not immune to the general issues that plague aviation.

The sector is highly competitive and beholden to volatile fuel prices. That latter point is probably more important today than it has been for decades. Airlines can and do hedge their fuel costs, but they can only hedge so much and for so long.

Even the best hedging programmes cannot help them compete against state-owned carriers such as Etihad Airways. With their almost bottomless pockets, these carriers can keep ticket prices low and absorb high costs during periods of uncertainty. IAG can’t do that, especially with its weakened balance sheet.

Then there’s the cyclical nature of the airline business. Most European airlines make money in the holiday season and lose it over the winter period. A series of bad winters can really hit a firm’s ability to compete in the lucrative summer months. IAG is, to a certain extent, insulated from this by its transatlantic routes. Still, profits have historically (pre-pandemic) dropped substantially over the winter period.

So, while the business might be projecting a return to profit in the second quarter, investors need to be prepared for losses to return in the second half.

Unpredictability makes it hard to analyse IAG

All of this means that it’s impossible for me to try and project where IAG will be in five or ten years from now, and that makes the business pretty much uninvestable. Yes, the airline might perform better this year than it did last year – that wouldn’t be very hard – but that growth might not be sustainable.

As well as all the factors above, the big unknown is the global economic environment. If global growth slows, even IAG’s transatlantic routes won’t help it avoid the fallout.

Even though the stock might surprise to the upside in 2022, it’s unclear how or if the business will grow sustainably from here while paying down debt, fending off the competition and dealing with growing economic risks. I’d avoid it.

SEE ALSO:

Two of the best airline stocks to invest in as the travel industry rebounds

With shares in International Consolidated Airlines Group (IAG) “bumping along at all-time lows”, IAG’s new boss Luis Gallego has decided to shake things up, say Robert Lea and Martin Strydom in The Times. He has forced out Álex Cruz, the controversial head of British Airways, which IAG owns. Cruz, who has been replaced with Sean Doyle of Aer Lingus, earned notoriety for scrapping complimentary food and drink for short-haul economy passengers and overseeing IT disasters that left passengers stranded. BA was branded a “national disgrace” under his management for its job-cutting strategy.

Many BA workers will see the departure of Cruz as “the first good news for cabin crew in months”, says Jim Armitage in the Evening Standard. But while his cuts “may not have been popular”, his overhaul has left airline in “better shape than most” to face Covid-19. Similarly, his decision to stop “chucking money away on rubbish freebies” on short-haul flights made sense given that BA faces tough competition from budget airlines. Most importantly, his success in increasing profit margins to 16% was a “big win” for shareholders and may have helped convince them to back IAG’s emergency fundraiser.

Hired as an enforcer

Cruz is entitled to “feel hard done by”, as his departure is more to do with internal company politics than lack of merit, says Oliver Gill in The Daily Telegraph. Hired as IAG boss Willie Walsh’s “enforcer”, with strict orders to cut costs, his policies were always going to lead to “collateral damage”, destroying any chance of him succeeding Walsh. So after Walsh was replaced by Luis Gallego from Iberia, a much smaller and less profitable part of IAG, it was clear that Cruz was on a “hiding to nothing” and it was only a matter of time before he would be forced out. It looks as though Sean Doyle’s task will be delivering a slightly more palatable version of his predecessor’s policies, says Nils Pratley in The Guardian. This is a pity because while Cruz managed to deliver “fat profit margins” before the pandemic struck, his penny-pinching alienated both staff and customers, and left BA “as little more than an upmarket version of easyJet on European routes”. It also made it look “as if the airline didn’t care about how it is regarded on its home patch”, which is a big mistake given that BA currently needs all the goodwill that it can get.

Doyle may be “well-respected” and considered a “fantastic people manager”, say Philip Georgiadis and Arthur Beesley in the Financial Times. But his task is made harder by the fact that his appointment comes just as the second wave of Covid-19 has “snuffed out” hopes that the industry “might be through the worst of the pandemic”. Airlines “are not forecast to recover until 2024 at the earliest”. And BA is “badly exposed” thanks to its reliance on corporate travel – a part of the market that has been “completely gutted” – and the “near-closure” of the transatlantic market.

At the start of the crisis in March I suggested investing in International Consolidated Airlines Group (LSE: IAG), the owner of British Airways. Those who took my advice would have endured a bumpy ride.

The shares surged to 330p before falling back to 155p in early August, meaning that you would have had to close the position at the adjusted stop-loss of 200p. The stock is now at 216p, slightly below where it was when I first tipped it in March. Despite the roller-coaster ride, I think it is time to give the airline group a second chance.

One of the key reasons why IAG’s shares have done so badly is that the travel restrictions and border closures imposed by most governments in order to combat the virus have lasted longer than many people initially predicted.

Although there was a brief resurgence in travel during the summer, as people went on their holidays, this has faded away, with many governments reimposing restrictions in order to reduce the chances of a second wave of the virus in the autumn.

Airlines face strong headwinds

Many experts worry that the industry’s problems could persist even after the crisis ends, with many business trips and conferences carried out online. At the very least, many firms may simply decide that travel budgets are an easy target at a time when many of them are facing sharply reduced profits, or even struggling to stay in business.

IAG’s management is deeply pessimistic. CEO Willie Walsh thinks that the number of passengers using BA may not return to pre-crisis levels until 2023. The company also plans to issue more shares to raise cash to see it through the crisis. As a result, existing shareholders will see their holdings diluted by as much as 50%.

All this looks very bleak. However, there are several reasons to be cheerful. Firstly, most experts agree that there is a good chance that we could see a vaccine by the end of the year, which could see a permanent end to the crisis. Next, similar predictions about the end of business travel were made after the terrorist attacks in 2001 and Sars in 2002-2003, only for it to bounce back.

While the rights issue is not good news for shareholders, it at least reduces the risk of IAG being pressured into accepting a government bailout, which would inevitably come with an equity stake.

Perhaps the best reason to buy into IAG is its valuation. The shares have rallied by nearly 40% from their August lows, but still trade at just two times 2019 earnings, which looks cheap even if shareholders’ holdings are going to be diluted or the recovery in business travel takes longer than expected. I recommend that you buy IAG at the current price of 206p at £15 per 1p. With a stop-loss at 140p, this gives you a total downside of £990.

How my tips have fared

The last four weeks have seen a mixed performance by my three long tips. Royal Dutch Shell produced better second-quarter earnings than many analysts expected, but the oil giant’s shares fell from 1,179p to 1,086p.

Even though it is set to be removed from the FTSE 100, media group ITV remained steady at 58p. Industrial and construction equipment group United Rentals appreciated from $160 to $177, thanks to an unexpectedly good earnings report.

My three long tips are making a collective profit of £1,301 owing to the £2,484 in profits from United Rentals.

My three short tips have also gone in different directions. Electric-truck maker Nikola increased from $36 to $40, thanks to an announcement that it will sell 2,500 trucks to a waste-disposal firm.

Exercise-bike manufacturer Peloton also rose, from $72 to $76. However, online insurance-broker eHealth fell from $68 to $63 amid concern that the number of people cancelling policies is increasing.

Shares in online education provider GSX Techedu declined from $91 to $85, although it hasn’t fallen below the $70 at which I suggested you start shorting. My short positions are making a total profit of £1,172.

Counting International Consolidated Airlines Group, I now have four long tips and three short ones, which is a reasonable balance. Given that my tip on Royal Dutch Shell is making a loss after nearly six months, I will be keeping an eye on it with a view to closing it soon unless things improve.

I also suggest that you raise the stop-loss on United Rentals to $150 and cover your position on eHealth if it reaches $100. As for the other positions, stick with them.

The airline industry has borne the brunt of the financial fallout from the coronavirus. Countries around the world have imposed various degrees of restrictions on flights, from screening and quarantines to outright bans; even where planes are still allowed to fly, demand has fallen so far that airlines have voluntarily cancelled flights.

The industry seems to be facing a crisis much worse than the 2003 outbreak of Sars or the global financial crisis of 2008/2009. Indeed, some experts are predicting that, unless things improve, the entire industry could find itself bankrupt by May.

A nosedive too far

It is no surprise, then, that shares in International Consolidated Airlines Group (LSE: IAG), the parent company of British Airways, have fallen by nearly 60% from the peak of 646p in January to the current level of 259p. However, this is an overreaction. Firstly, it’s still very unlikely that this crisis could force IAG into bankruptcy. While some of its costs are fixed irrespective of how many flights it operates, others, such as fuel, can be drastically cut back under a nightmare scenario of a prolonged grounding, or at least deferred until normal service has been resumed. The company could also save money by suspending the dividend.

Russ Mould of AJ Bell estimates that even if it were to operate at 20% capacity for the next 12 months, a far longer period of disruption that most experts are predicting, it would still only lose around £5bn. While this is a huge amount, IAG has more than £9bn of liquidity, enabling it to survive even an 18-month shutdown.

The fact that CEO Willie Walsh has said IAG will not be seeking government support, in contrast to most other airlines around the world, suggests that the management is confident that it will be able to survive the coming crisis.

If IAG does manage to pull through, it looks extremely cheap. According to the official estimates it is trading at only three times 2021 earnings. While next year’s earnings-per-share estimates are now clearly out of date, they do give an idea of what will happen when things return to normal. Mould also points out that the fact that IAG is in a better financial position than its rivals, especially those in Europe, means that it could benefit from a reduction in the number of competitors, something that Mould thinks is needed to cut the industry’s overcapacity.

I suggest that you go long on IAG at the current price of 227p at £16 per 1p. With a stop loss of 96p, this gives you a downside of £2,096. This is a much wider and deeper stop loss than I normally recommend. However, it reflects the extremely volatile market and the short bias of my portfolio: it has leeway for potential losses on IAG, thanks to current gains from shorting other stocks such as Uber and Boeing. Meanwhile, take profits from shorting Wayfair, which has fallen by 70% since I tipped it in issue 969.

The last 15 months have been awful for shareholders in International Consolidated Airlines Group (LSE: IAG): the share price has fallen by a third. This is mainly to do with problems at British Airways, one of the airlines the group owns (along with Aer Lingus, Iberia and budget carrier Vueling). Not only was BA hit with a £183m fine in July for allowing its security system to be breached, but it also suffered its first pilots' strike a few weeks ago. Hundreds of flights were cancelled, triggering widespread opprobrium.

IAG has now been forced to issue a profit warning telling investors that they should expect this year's earnings to be much lower than originally estimated. Most of this was due to the £121m cost of the BA industrial action, as well as £30m of additional costs associated with threatened future action by ground staff. However, the warning wasn't just due to striking pilots. It also highlighted unexpectedly weak demand for flights (especially on its Spanish low-cost subsidiary Vueling) as another factor likely to depress profits.

The big picture is encouraging

However, while the threats of further industrial action and slowing demand are clearly important, they must be viewed in the context of a business that has done extremely well in recent years. Over the past six years sales have increased at around 5% a year and they are expected to keep growing in the next two years.

At the same time, IAG has also managed to increase its operating margin, which has grown from a tiny 2.8% in 2013 to 15% five years later. This has enabled the group to make efficient use of its capital, achieving a return on capital employed of 14.3% (and a return on equity, another key gauge of profitability, of 32%). Meanwhile, BA seems unlikely to suffer any major damage to its reputation.

Another reason this could prove a good time to buy into IAG is because the fall in its share price means that it is now very cheaply valued, especially compared with other airlines. It trades at only 4.6 times 2020 earnings.

By contrast, easyJet and Ryanair are on 2020 price/earnings ratios of 12.4 and 14.6 respectively. Air France-KLM is trading at 5.7 times 2020 earnings. Other global airlines such as Delta Air Lines, which trades at 7.4 times, are also more expensive. At the same time, IAG also delivers a solid dividend yield of 3%.

With IAG's share price now up 15% since the low in August, I think the stock is a buy. I recommend you go long at the current price of 468p at £8 per 1p (IG Index's minimum stake is £1 per 1p). I also suggest that you place a stop-loss at 348p, which would give you a total downside of £960.

How my tips have fared

The last fortnight has produced mixed results for my six long tips, with half of them going up, but the other half declining.

The ones that increased are JD Sports, which went up from 718p to 750p, Safestore, which rose from 644p to 671p, and Bellway up from 3,268p to 3,354p. However, Superdry fell from 429p to 423p, Bausch Health Companies declined from $23.28 to $20.59 and Volkswagen went down from €162 to €153. Overall, my long tips are making a profit of £2,856, which is down slightly from a surplus of £3,184 two weeks ago.

However, the performance of my short tips has been much better. Four out of five of them have depreciated. Bitcoin is now $8,331 (from $10,136), Netflix is $266 ($292), Uber is selling for $29.64 ($34.64), while Tesla is at $241 (from $285).

Only Weis Markets advanced, going up marginally to $38.32 (from $38.23). This means that if you had followed six of my open tips you would have ended up making money on each of them, for a total profit of £1,953 up by over a thousand pounds from my last column.

Overall, my 11 open positions are making a profit of £4,809, nearly as much as the total losses on my closed positions. I have decided to increase the stop-loss on JD Sports to 700p (from 675p) and am also raising the stop-loss on Safestore to 625p (600p). I am also going to increase the stop-loss on Bellway to 3,000p.

I have, furthermore, decided that I am going to give Superdry one last chance to bounce back, but if there isn't a huge improvement I'll be recommending that you close it. Finally, I'm increasing the stop-loss on Volkswagen to €125. However, I'm not going to tinker with the stop-losses on any of the short positions.

Trading techniques... head and shoulders

Many traders argue that certain stock-price patterns tend to repeat themselves more frequently than you'd expect from chance alone. By spotting these patterns traders can use them to anticipate future price movements. One of the most popular is the "head and shoulders" pattern, which indicates that a price trend may be reversing or about to reverse, either on the downside, in the case of a "head and shoulders top", or the upside, with a "head and shoulders bottom".

In a head and shoulders top the price of the asset rises, peaks (the left shoulder), falls and then makes a new higher peak (the head), before falling again. However, the third time it peaks, it does so at a level than is significantly lower than the second peak (the right shoulder). Traders will go short when the price falls through the "neckline', the lowest point between the first and third peaks. The head and shoulders bottom is the mirror image of the top. In this case the price of an assets falls (left shoulder), partially recovers, falls some more (head), rallies a lot, falls for a third time (right shoulder), but not as far as the second time. In this case the trader would buy the share when it goes above the neckline, which in this case would be the highest point between the two shoulders.

There are some weak signs that a trading strategy based on head and shoulders patterns could work. A 1995 study found that using the technique to trade various currencies against the dollar between 1973 and 1994 produced above-average profits. In some currencies, such as the dollar against the Japanese yen, the annualised profits reached 19%. However, the returns were very volatile and didn't account for trading costs.

Budget airline WizzAir is targeting underserved areas in growing economies.

The last two years have been very profitable for those who own shares in European airlines. The rebound in eurozone economies has boosted sales, while low energy prices have reduced costs, and both of these factors have helped the bottom line. It shouldn't be surprising therefore that some airlines have seen their share prices surge. Since October 2016, easyJet and British Airways have seen their share prices rise by more than 70% each, while shares in German airline Lufthansa have gone up by more than 140% (at one point the share price had more than tripled).

However, there are fears that the good times could be about to end. One concern is rising oil prices, which could either force airlines to cut their margins, or to pass unpopular price rises onto travellers, which would inevitably hit volumes. Another big concern is Brexit, with a worst-case scenario resulting in British and European airlines being denied licences to operate in each other's markets. As a result, the share prices of all the major airlines have cooled this year.

Yet despite these concerns, there is still some value to be had. One firm that looks interesting is budget airline Wizz Air. It was founded in Hungary in 2003, and its main focus is on eastern and central European countries. Not only are the economies of these countries growing faster than the rest of the continent, but they are currently underserved by the main carriers. This gives Wizz Air greater room for further expansion, which should allow it to keep on going strong for a long period of time.

However, as well as continuing to expand its presence in its core market, Wizz Air has taken steps to broaden its horizons by moving westwards. These include starting new bases of operations out of Luton in the UK (securing take-off and landing slots vacated by the now-collapsed Monarch Airlines) and Vienna in Austria. Last year it also set up a UK subsidiary. As well as helping it to expand its revenue, this should help ensure that it continues to have access to both Britain and Europe whatever happens. Outside of Europe, Wizz Air also currently flies to Morocco, Israel, the United Arab Emirates and Kazakhstan.

Overall, Wizz Air's revenue has more than doubled over the last five years, and is expected to grow by around 20% over each of the next two years. While the airline's profits have been a little more volatile than its sales, it has gross margins of 15% and a return on invested capital of 25%. Despite this, it trades at 14 times forward earnings, which is similar to larger airlines such as easyJet, which are growing much more slowly.

Overall, I think there is still a lot of value left in Wizz Air's share price and you should buy it at £35.60 at £1 per 1p. In this case, you should put the stop-loss at £26. This will give you a total potential downside of £968.

Trading techniques death crosses

As we've discussed before, a lot of traders use the moving average (MA) to guide their trades. In its simplest form, this involves taking the average price over a period and comparing it with the current price level. When the current price rises above the MA, it is time to buy, and when it falls below, it is time to sell. Some people like to take the analysis one degree further and compare different MAs with one another. A "golden cross" is where the short-term MA (such as the 50-day MA) rises above the longer-term one (100- or 200-day). A "death cross", meanwhile, is where the short-term MA falls below the long-term one. As you'd expect from the names, a golden cross is seen as bullish; a death cross is considered to be bearish.

The last proper death cross for the S&P 500 occurred two and a half years ago, at the start of 2015 (see chart). Since April 2016 the bull market has kept the 50-day MA average well above the 200-day one. But in April it fell below the 100-day MA, and is now close to the 200-day.

One study by the research service Wall Street Courier seems to suggest that this may be more than a trader's superstition. Buying into shares after a golden cross and going into cash after a death cross between 1950 and 2002 would have boosted annual returns from 7.2% to 7.5%, compared with a simple buy-and-hold strategy, while cutting annual volatility from 15.6% to 11.2%. But and it's a big but this doesn't consider the transaction costs that would result from the 65 trades.

How my tips have fared

The last fortnight has been rather mixed. Brazil has been crippled by a wave of strikes by truckers, due to anger over rising oil prices. When the government indicated that it was going to restore price controls, Petrobras's CEO Pedro Parente resigned. This caused shares in the company to fall to less than $10 at one point. This means that the position stopped out at a reduced paper profit of £646.25. Still, it could have been worse had I not put the stop-loss in place, or had the market fallen so quickly that it jumped through the stop-loss.

The remaining four long positions have been treading water, with two rising and two falling. Greene King has gone up to 604p, which means that it is now making a profit of £580. And despite the Chinese government launching a probe into price-fixing in the computer memory market, Micron's shares have jumped to $59, netting us £324 on paper. Housebuilder Redrow fell back to 601p, due to concerns that house prices may be about to fall, which means it is £77 in the red. IG Group slipped to 870p, but this still puts the trade £599 ahead. Overall, the remaining open long positions are making a £1,425 profit.

My short positions are also doing well overall. Despite further production problems, including revelations that the company has paid out refunds on nearly a quarter of the deposits for its Model-3 car, Tesla's price has actually risen to $297, which means I'm losing $56 on the trade. The S&P 500 has also gone up to 2,746, which puts it £335 in the red, as well as perilously close to the stop-loss of 2,775. However, the good news is that bitcoin has plunged to $7,348, increasing profits to £947.

Overall, I'm in profit by £556 on my shorts. In all, my current positions are making combined paper profits of £1,981 (£1,500 counting all open and closed trades so far).