Inside travel: The end of Airmiles

To exchange your Airmiles for a genuinely free flight, act now. After 23 years, the retail-reward scheme with 2.2 million collectors will be transformed from one minute to midnight on Monday. The BA-owned programme currently provides free flights to reward customers for their loyalty to banks, supermarkets and petrol stations. But, after a 32-hour shutdown (until 8am on Wednesday), holdings of Airmiles will be automatically exchanged for a new currency, Avios, at a rate of 1:10. So if you have 750 Airmiles today (currently enough for a trip to Paris), they will be worth 7,500 Avios from 16 November.

On the same day, the number of points required for a ticket to most destinations also rises tenfold, but with some changes to popular places. The points required to reach New York fall by 20 per cent. But two of the top three Airmiles destinations, Amsterdam and Paris, will get harder to reach. They currently "cost" 750 Airmiles, but from 16 November, the fare rises to 9,000 Avios – a 20 per cent increase in the amount you have to save.

Most significantly, though, there will no longer be such a thing as a free flight. You will be required to pay "taxes, fees and charges". This charge ranges from £27 for most European flights to £300-plus on a return trip to New York and almost £500 to Sydney. But book a flight now for travel any time up until October next year, and you can still get a free trip.

Why the changes?

IAG, which comprises BA and Iberia of Spain, wants a single global currency for all its reward programmes, including BA Miles (earned for flying, not shopping) and Iberia Plus. That explains the newly dreamt-up currency, which had to have a new name because IAG does not own the rights to Airmiles globally. Most collectors have no objection to a change in name, but do hold strong feelings about abruptly being asked to pay for something that previously was free. The managing director of Airmiles, Andrew Swaffield, told The Independent Traveller: "We can't afford to absorb the taxes, fees and charges." But he said he was "extremely confident" that Avios would be the highest-value travel reward currency, "particularly for people who redeem on European flights".

To bolster that claim, his company has a flat rate £27 to cover "taxes, fees and charges" on a range of short-haul trips. Given that BA deems these to amount to £88 from Heathrow to Amsterdam, this represents a significant saving.

Don't governments set these "taxes, fees and charges"?

No. Airmiles says: "We need to separate airline taxes, fees and surcharges from our fares, as we don't control these and how much they fluctuate". This is technically correct; they are controlled by the parent company, British Airways. The only tax on that trip to Amsterdam is £12 UK air passenger duty. The rest are commercial charges that cover a range of services from fuel to airport fees.

Other airlines charge even more: to redeem Flying Blue points on a KLM round-trip from Heathrow to Amsterdam, you must pay £110 in extras.

How can I dodge the charges?

By exchanging Airmiles online (at Airmiles.co.uk) by one minute to midnight on 14 November, though you can win an extra month's grace if you book by phone (0844 49 333 99; open 9am-5pm on Saturdays, 10am-4pm on Sundays, 8am-8pm on other days) by close of business on 15 December.

The impending change may trigger a spike in redemptions before the impending deadlines, but the company says there is plenty of availability.

Does the new scheme offer any improvements?

Yes, particularly for travellers starting and ending at regional airports. Connecting BA domestic flights to London will be offered at no extra charge. Flights operated by Iberia will now be open to reward travellers, which will improve options to Latin America. In addition, the company is bringing back one-way flights and "open-jaw" trips, allowing passengers to fly to one airport and back from another. And on paid trips with BA, you will be able to earn Avios points.

I still have paper Airmiles. Are they worthless?

Not necessarily. In the old days, these paper certificates were the main form of Airmiles, and you posted them in to redeem them against flights. They may still have value, but to find this out you will need to post them to arrive at Airmiles, PO Box 90, Birchwood, Warrington WA3 7WE by 30 November. Keep the serial numbers in case they get lost in the post.

Timeline: The switchover

* 8pm, Monday 14 November

Airmiles Customer Contact Centre closes for 36 hours.

* 11.59pm, Monday 14 November

Airmiles.co.uk closes. This is the deadline for redeeming Airmiles online, ie without paying "taxes, fees and charges".

* 8am, Wednesday 16 November

Everything re-opens. The website is switched back on as Avios.com (with automatic redirect from Airmiles.co.uk). The Customer Contact Centre (as it still is) re-opens. It will offer redemptions on current terms and conditions until...

* 8pm, Thursday 15 December

Deadline for redemption under Airmiles terms with Customer Contact Centre.

What will happen to my BMI Diamond Club miles after a BA takeover?

The proposed sale of BMI by Lufthansa to IAG (the parent company of British Airways) is far from complete. But if it does go ahead as expected, then frequent-flyer points will certainly be part of the takeover agreement.

All that the prospective buyer will say is: "At this stage, IAG has signed a letter of intent to buy BMI and it is hoped that the deal will be completed in the first quarter of 2012. While we appreciate fully the concerns that BMI's customers have about their BMI points, at this early stage in the deal process, we are unable to provide any them with any further information."

From past experience, it is likely that collectors will be offered the chance to exchange their BMI miles for IAG's Avios currency, probably at par (ie one-for-one). The "cost" of a Heathrow-Amsterdam return on both BA Avios and BMI miles is 9,000. It is also possible that you may be able to elect to keep your saving within the Star Alliance scheme, for example by converting to Lufthansa's Miles & More programme.

Perks such as BMI's silver and gold Diamond Club membership are likely to be transferred to BA's Executive Club, with the latter's rules on elite status applying thereafter.