Passengers saving Airmiles for free flights on British Airways have responded with dismay to the airline's decision to devalue the reward.

From 16 November, the most popular destinations will require more points – and a cash contribution.

One Airmiles collector, Alan Small from Essex, said the new system would make the points "virtually worthless" on long-haul fares. He said: "Currently I can get a return to Sydney for 10,000 Airmiles, no cash payable. The new scheme will require the same value of points but cost me nearly £500 in taxes and surcharges."

The airline's "free flights" reward scheme is introducing a new points system, known as Avios – a term that will be deployed across all the reward programmes for BA and its partner, Iberia of Spain. The company is writing to 2.2 million Airmiles collectors to tell them that their holdings will be converted to Avios at a rate of 10 to one. At the same time, the points required for some key destinations will increase.

For destinations such as New York, marginally fewer points will be needed. But collectors will have to pay more than £300 in cash – about the same as the cheapest ordinary ticket.

The managing director of Airmiles, Andrew Swaffield, said "We decided we can't afford to absorb the taxes, fees and charges. We are extremely confident that you won't be able to find a better-value travel reward currency, particularly for European flights."