Avios changes 2: understanding the new earning rates

My three articles today look at the headline changes announced by BA yesterday.  I will follow this up with some deeper discussion tomorrow.

Key link: ‘Club Changes’ page on ba.com

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Here are the other articles in this series you may have missed:

1. Understanding the new tier point rules

3. Understanding the new spending rates

4. What is an Avios point worth after April 28th?

5. Exploiting the ‘no repricing on date changes’ rule

6. Why are off-peak upgrades now more expensive than peak?

7. Save 43% of your Avios on long-haul redemptions if you fly Iberia

8. Partner redemptions may be cheaper if booked on iberia.com

9. What will happen to airline partner earning rates?

10. Are you a winner or a loser overall?

The changes only apply to tickets booked after April 28th.  Tickets booked before then will be covered by the current rules, whenever the travel date.

This article looks at the changes to Avios earning rates.

If the bulk of your Avios points come from credit cards, Tesco etc then these earning changes will not impact you much.  For others it will mean a massive change.

Here is a summary table of the old and new rates:

Avios earning chart 2

It speaks for itself:

Earnings on cheap economy seats drop from 100% to 25%-50%.  The minimum number of Avios earned per flight has also been adjusted to reflect this.  Instead of earning at least 500 Avios per flight, you are now only guaranteed a minimum of 125 for the cheapest economy tickets.

In itself, I don’t blame BA for changing this in some way.  The old system was too generous and this is only moving back to what existed pre 2011.

If this had been the only change made to the scheme, I would have shrugged it off as a shame but also as a return to commercial reality.  Giving out 12,000 Avios for a flight to the US in deeply discounted economy did not make a lot of sense.  They were giving away a European flight with every long-haul.

However, BA is also making changes at the top end.  Fully flexible business class tickets jump from 150% to 250%.  This is pointless.

How many people buy fully flexible business class tickets with their own money?  Almost none.  How many companies let employees pick their airline?  Not many, as there are usually bulk deals in place.  The banker who has no choice but to use British Airways because the airline has negotiated a deal with his employer sees his mileage jump sharply.

(No changes have been announced to earnings rates on partner airlines but that doesn’t mean that none will be forthcoming!)

BA has also tampered with the status bonus for Silver members:

Avios tier bonus 2

The Silver bonus drops from 100% to 50%.  Again, if I’m totally honest, I could have lived with this if it had been the only change.

The impact of this on a fairly large sub-section of BA customers is huge.

Let’s assume you are a Silver member who flies to Cape Town in deeply discounted economy.  Using 12,000 miles as a rough distance, you would earn 24,000 miles for the round-trip.  After April 28th, you would only earn 9,000!  That is an astonishing drop.

The smartest thing I ever read about loyalty schemes was from US blogger Gary Leff.  His thesis is that a successful scheme is about increasing marginal spend from EVERY customer.  Not your top 10% of customers (who only use you because their employer tells them to) but from all your customers.

BA, on the other hand, has told about 70% of customers by volume that it really couldn’t care less if they continue to fly with them or not.  The customers it does want to keep and will reward heavily are those who are effectively forced to buy their product by their employer, an employer who already receives large rebates from BA.  If that sounds odd to you, it should.

Click for the next article – understanding the new spending rates

Avios changes 1: understanding the new tier point rules
Avios changes 3: understanding the new spending rates
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Comments

  1. Lee Thornton says:

    You mention earning rates with partner airlines haven’t changed (yet). Are you sure? As BA lists the Avios earned by fare class won’t it be able to award this number regardless of the airline flown as, since Avios is owned by BA, it is there prerogative to do so? I think a key tactic here might be to credit BA flights to a partner’s loyalty programme such as AAdvantage as these earnings rates don’t appear to have changed since it is up to those programmes to award points based on their rules.

  2. Unfortunately the Silver downgrade was always going to happen to differentiate from Gold! I was surprised they raised it to 100% three years ago and knew from then it would only be temporary even though a BA spokesperson on flyer talk was insisting not!

    It was also only 6 years ago that discounted economy actually earned no tier points at all. So having gone through the recession, it’s now making an almost full circle!

    I think most of the changes were to be expected. Dsappointing nevertheless. The one thing I find really annoying though is that with such a hike in premium redemption rates, there is still no budging on the huge surcharges that need to be paid! That’s only in line with a few carriers not most of the competition!

    I wonder if we will see a Tesco conversion bonus soon to sweeten the hit!

    • Guesswho2000 says:

      Worth noting that AA (for now) do the same with their status pax – Gold = 25%, PLT/EXP=100% status bonus.

  3. Ironic; having two longhaul returns in W already booked for this year I am losing outdue to both the current and new structure. Still, I am happy to have those flights and UuA locked in givrn changes to upgrade costs.

  4. Ianmac69 says:

    As you say, the earning rate change doesn’t impact us clubcard / amex points hounds much, but the real fear now must be a devaluation or worse on clubcard (not an unlikely scenario given Tesco’s position) and/or amex (perhaps less so than tesco, but how long can the churn ‘um and earn ‘um gravy train keep running?).

    That combined with this significant devaluation of avios for l/h comfy seats would mean the fun’s all over for people like me :(

  5. Agree totally with your last paragraphs Raffles. BA seem to be trying to push loyalty as buying premium tickets only, rather than rewarding loyalty in choosing them as your preferred carrier.

    Have attempted to fly with BA as much as possible thanks to the former Avios scheme, now am not so sure I can see the point…and as I’m a short haul freq. flyer (on my PERSONAL wallet, long distance relationship) I don’t get much in tier points or avios to compensate, only the service (which BA is admittedly v good at)

    50 flights to reach a tier that lets you in the lounge for the first time is ridiculous, they should add “X loung entries” to the Bronze tier

  6. I think you should post that analogy on the executive club thread running on FT.

    I would love for someone from BA to read it and say to themselves “oh shit!”

    My loyalty to BA has already been tested and this is just the nail in the coffin.

    I will now fly with whoever offers the best product for the best price.

    although I do feel that this devaluation will see a lot more award seats available for those of us with a big balance.

  7. You say 100% Avios for the cheapest economy tickets is too generous and I would probably agree, but it was also the main reason I and I assume many others who can only fly economy would choose BA. Now for long haul it will come purely down to price.

    In the past I have chosen BA over other airlines (e.g. Air NZ to LAX or Virgin to LAS) by factoring in the value of the Avios earnt but this won’t happen now, 25% is not worth it anymore.

    On short haul 125 Avios is laughable. You can probably earn more Avios buying a Rynair ticket on your Amex than flying with BA.

  8. Completely agree about this change is about rewarding the business users. Amazing though because as you say half of these business flyers probably do not even want to be on that BA plane but have to because of their employee!!

  9. Will be interesting to see how the notoriously poor BA IT systems cope with awarding Avios for bookings pre and post 28 April when the flights are actually taken. I’ll be making sure to make a note of what should be earned for flights already booked, in the inevitable event the lower amounts are actually deposited once flown.

  10. DAVID POWELL says:

    hi Raffles,

    im still trying to work out how affected i am by these changes.
    i use my Virgin miles to fly to HK every month, then collect avios and BA points when flying with cathay from HK to Singapore. i currently use my BAEC for my cathay earning. is this still a good move? i also use finnair occasionally when flying to Singapore via helsinki. but still only use my BAEC to collect points. i have got to become bronze member by doing this. having only flown BA one in the last 12 months! any suggestions on whether i should change my routine?

    • Well, you should probably have been collecting with Finnair Plus previously, but now it doesn’t really matter.

    • Nothing changes for you on earning. Tier point and Avios earning from BA partner airlines stays as it is.

      You will be hit by the poorer BA spending rates.

  11. Raffles
    You are right about this changing/removing customer loyalty and stopping the additional marginal spend from customers.
    I’m at the lower end of the market, but I fly often (monthly at least) on my own money. Having ignored loyalty schemes for a while, I’m close to BA status and have even booked BA flights over cheaper options for the tier points (and better flight times). Not any more, no point.
    And the avios I’ll ever earn on flights now isn’t going to add up to much.
    There is no way a non-business customer could ever get out of blue status. Maybe that is what BA wants but it will lose customers like me who would hope they could get priority boarding or better.

  12. Hi raffles ,
    I have 2 flights already booked for May and June and using the existing system I will go to silver.

    Will I now miss out, or as these have been booked before April 28th will I get to silver?

    • It says in the smallprint that bookings made before the April deadline will not be affected!

      • I’m assuming then there will be a 355 day grace period from April 28 for all flights booked till then .

  13. Could booking with oneworld partners after 1 April be the solution, even though your membership is with BA? If you fly with Iberia using your BA membership, would that result in getting BA tier points system or Iberia’s system? Thanks (silver member flying economy)

  14. Raffles, I understood that in your Cape Town example scenario above, with the 12,000 mile trip, that in addition to the discount economy ticket earning 25% = 3,000 that a Silver would earn a tier bonus of 50% of the 12,000 not 50% of the 3,000, so 6,000 making a total of 9,000 earned? Or have I misunderstood…

  15. I fly 4 times to Oslo in Economy. Usually I try to fly with BA because of earning points. However SAS is often cheaper and although SAS eurobonus points are not worth much for flying, theycan easily be redeemed in their shop for stuff (got a Swiss army knife for free). This means in future I will chose the cheapest flight as BA and SAS fly almost at the same time and usually SAS is edging that. Lost for BA: £1200.

  16. I don’t log in to flyertalk on a daily basis but I saw a deluge of comment re avios and it was hard to fathom what had changed your site made it very easy to understand. Many Thanks.

  17. Do you think BA is looking to become more competitive for economy cash tickets when May comes? The reduction in the number of miles awarded for the lowest paying economy flight tickets would translate to a decent fare saving if this was their intention as a way to boost passenger numbers and compete more effectively. Or as not all passengers claim the avios and the cost of the avios to BA is probably substantially less than the perceived value to the consumer would it therefore not make much of a dent.

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