Avios changes 9: what will happen to partner airline earning rates?

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• Pierre says:

  3 Feb3 February 05:15

  Hmmm… another good new coming soon then….
  Well, it makes sense most flight will earn only 25% but I’m totally unsure about transatlantic flights because it would basically mean the end of the marketing partneship between AA, BA and IB.
  For instance, an AA flight would earn 100% of miles on American Advantage and a BA flight only 25% for the same routes which would give a huge huge incentive to book an AA flight over a BA flight. I remember that only transatlantic flights were earning 100% miles at the very beginning of the partnership ; it could be the same again with new changes.
  Besides, we see some very strange earnings, a Vueling flight (booked on Iberia or an Optima fare on Vueling) still earns 100% miles on IB+ with the new table whereas flights taken at basic rate on Iberia only earn 25%.

  • neuromancer says:

    3 Feb3 February 05:39

    I suppose they have forgotten to include Vueling in the explanations, but it’s hard to believe it will stay at 100%.

    • Pierre says:

      3 Feb3 February 07:13

      It has been published already so I guess they had a hard talk about this already.
      Optima fares can be credited to Iberia+ or to Vueling Puntos which is a Revenue based loyalty program. Basic fares don’t get anything on IB+ (whereas they can be credited to Punots) but the possibility to credit to IB+ has been a marketing argument to upgrade to Optima fares (which include a checked luggage plus a little bit of flexibility) so they needed to credit more than 25% to keep that argument decent.

  • Rob says:

    3 Feb3 February 07:50

    AA will be restructuring its own programme once the US Airways programme is merged in and I would expect to see that harmonised at 25%. There may be a six month window, I admit.

    • RIccati says:

      3 Feb3 February 13:38

      If it’s a full harmonisation, i.e., AAdvantage earns 25% on economy discounted on AA and BA, then imagine the level of furore. Americans are a very flying nation and a devaluation coupled with 25% earning rate (vs. 100%) will be truly damaging to their business.

      Might be no economics left behind spending money on higher fares that earn 100% of devalued points, i.e., cost of business class acquired via FFP will be similar to buying it for cash outright.

      However, AA earning 100% on AA economy discounted flights, while 25% on BA economy discounted… possible but that throws BAEC into being a third-world program. Would definitely drop their revenue from the US (in absence of the joint venture).

      Let’s see how the partners (AA and BA) get out of this one. The amount of revenue and arbitrage in question is far higher than between BA and IB.

      About labelling, they call classes G, Q, S, N, O “Deep Discounted Economy” — these are classes on which an overwhelming majority travels… which world are they living in? Clearly the world of 1bn pre-tax profits and no limits to fares.

      Again, with BA having dominant position on Heathrow slots and BA-AA-IB-Partners cartel sharing the revenue from transatlantic routes, where are the competition regulators?

      • callum says:

        3 Feb3 February 15:15

        Yes, it would drop their revenue in the absence of a joint venture. Not that I see how that’s remotely relevant given the fact that they are in one?

        The number of people flying on cheap tickets is irrelevant. Those classes are available at a deep discount to full priced economy. It’s been standard practise on many airlines that deep discount economy only earnt 25% or so. Is it not a good thing that they’re living in a world of 1bn pre-tax profits and no limits to fares – given that is the actual world we’re all living in now?

        The competition regulators approved the joint venture. While they have the dominant position, they don’t have a monopoly position. Numerous airlines fly from Heathrow to the States – many more flying indirectly. The competition regulators are there to prevent monopolies – not help customers get as many air miles as they can!

        • RIccati says:

          3 Feb3 February 18:00

          Personal comment but you are turning arguments upside down just to argue.

          “What if” scenarios certainly matter and the joint venture AA, BA, IB will crumble (or would require different revenue sharing) if customers will flow towards AA for 100% frequent flyer miles on economy flights and a better product for business class.

          The point that if AA will not bring the earning rate down to 25% on economy (in line with BA) then there will be structural problem undermining the joint venture.

          Now, AA is unlikely to do that (25%) and I am ready to take a bet on it.

          That would also be evidence to the strength of dominant position and wiliness to use it. BA shows that it can operate very profitably without giving similar rewards and benefits as it’s partner airline AA.

        • Calchas says:

          4 Feb4 February 11:10

          AA flights earned by BAEC members are obviously going to drop in line with BA flights.
          But I don’t think we will see any major change to the AAdvantage earning table—whether earned on BA or AA. 25% is almost unthinkable for the Americans.

          It’s no threat to the JV, you can pick whichever FFP you like, you can pick which flight prefix you want and you can pick which operating carrier you like, completely separately.

• Stu R says:

  3 Feb3 February 05:32

  Apologies if this has been discussed before, and for being slightly off topic, but one wonders if the recent acquisition of a 9.99% share in IAG by Qatar will see them shift from Q Miles to Avios as their reward currency?

  • TimS says:

    3 Feb3 February 07:45

    Personally I doubt it. I think this is simply them buying as an investment. They may also be doing it to try to gain some influence in IAGs future directions. IAG Cargo already buys a significant amount of space on QR widebody freighters (including the occasional full charter) so they could be looking to safeguard/protect future agreements and alliances.

  • Rob says:

    3 Feb3 February 07:49

    Very unlikely. You don’t get much influence with 9.99%. More interesting is that Qatar also has a 20% stake in Heathrow, so there will be some interesting discussions over landing fees, slots etc.

• Chris says:

  3 Feb3 February 08:16

  Hi Raffles
  I was looking at Aadvantage redemptions yesterday in light of the recent BA devaluation. Some of the deals remain amazing value:
  South Africa for 75000 miles return in J versus ~137500 on BA (averaging out the peak v off peak rates!)
  Maldives for 60000
  Hawaii for 100000
  Do you plan to cover these opportunities in more detail as I think you have commented before that a devaluation or realignment in this regard could very likely?
  Cheers.

  • Rob says:

    3 Feb3 February 09:40

    The problem with AA is that it is ripe for devaluation and I am wary of getting readers to pile in. If the AA credit card bonus jumps up, or AA stays at 100 per cent on cheap Y, I will cover it.

    AA also has massively complex routing rules, such as you are not allowed a stopover or even plane change in the Middle East if you start in Europe, which makes it hard to know what is actually allowed. That Maldives price, for eg, would not be valid on Qatar or Etihad because it would involve a plane change in the Middle East.

    • Chris says:

      3 Feb3 February 10:05

      Yep this and the removal of free stopovers at gateways does make it less attractive. Though there are still some gems in there especially if you can make use of the zonal pricing.

      So would you say book now (and maybe change later)? How imminent do you consider a devaluation to be? What I’m worried about is that AA I think have absolutely no notice last time they changed the scheme…

      • Rob says:

        3 Feb3 February 10:37

        They won’t do it until the US scheme merger is done, so you have some time. That is scheduled for Easter I think.

        • Chris says:

          3 Feb3 February 11:06

          Great, cheers.

    • Marwan says:

      3 Feb3 February 11:53

      Not sure if this is a new rule, but that was not my experience. I redeemed exactly that award last year: MLE-AUH-DOH-LHR. 40k Aadvantage miles in first, one way – mix of Etihad and Qatar

    • DONE4 says:

      3 Feb3 February 12:43

      The Maldives are part of the middle east/India zone though. With limited exceptions, you cannot transit a different zone.
      LHR-DOH-MLE for example is a perfectly legitimate routing as it is a Europe to Middle East/India award.

      You cannot however route from Europe via the Middle East to Australia/Pacific on one award, so LHR-DOH-MEL is not valid.

      • Rob says:

        3 Feb3 February 13:33

        Thanks. I did say it was complex!

        • David says:

          3 Feb3 February 22:30

          Actually, there is an exception to the no Europe to Asia/Pacific via Middle East rule. That is if you fly on Qatar Airways via DOH. I discovered that recently.

      • ck says:

        3 Feb3 February 23:02

        We flew Qantas London Dubai Melbourne using aa points…

• nathanjf says:

  3 Feb3 February 11:59

  Could this also spell the end of the 210TP in AA first?

  • Calchas says:

    4 Feb4 February 11:13

    BA don’t seem to be upsetting J/F spenders at the moment.

• RIccati says:

  3 Feb3 February 12:07

  Does anyone knows a link to AAdvantage mileage calculator for earning?

  Need to check if crediting all flights to AA (rather than BA) is a reasonable solution (while retaining status).

  • AndyGWP says:

    3 Feb3 February 21:40

    Don’t forget the AA Challenge too! 🙂

    (for a cost admittedly, but worthwhile for those jumping ship soon and desperate to get status as quickly as possible)

    • RIccati says:

      3 Feb3 February 22:45

      So AA does reward full-fare First/Business Class tickets in 2015 with increased Class of Service bonus (went up from 25 to 50% for Business) and Long Flight bonus.

      All of that kicked in 1 January 2015 without a need for devaluation.

      Effectively BA ‘said’ that they can’t reward full-fare First/Business without a devaluation but they see more fairness in giving those fares up to 300% bonus.

      Yes, AAdvantage is ripe for devaluation but could it be worse that 50% increase in air miles price?

• RIccati says:

  3 Feb3 February 13:44

  They have no mileage calculator, i.e., how many AAdvantage miles to be earned on LHR-JFK.

• James67 says:

  3 Feb3 February 17:45

  OT: Anybody know if there is a problem booking awards at BA site? Loads of AY availabilty to bkk has vanished overnight. Also, flights pricing up wrong, e.g. HEL-HKG-BKK J is 120k one way instead of 75k. Similar issues via TYO or to HKT.

• Michael says:

  3 Feb3 February 20:11

  OT: Who can give me some advice please. I am trying to work out the most cost effective way to get from London to Los Angeles area. I have a bunch of Avios and Virgin Miles. Circa 30000 in each scheme but can top up with similar amount of MR points and have a few hundred in Tesco vouchers. Looking to book 2 adults and 1 young child. Leaving in March, returning in April. Found Virgin availability for about 900 return + 127500 miles or from about 1600 in cash, which would also earn about 22000 miles. Not really worth the miles converting Tesco vouchers. BA looks similar (a bit more miles and money) n the dates I am looking. Have not checked Iberia when logged in but they appear to fly to SFO only not LAX.

  • Michael says:

    3 Feb3 February 20:17

    Also OT: Anyone still seeing 3v cards at Tesco? Or the new PAY cards from the same company, which are the new version of them. Cannot find £ 50 Visa cards either anymore but £ 50 Amex gift cards instead. Checked online too but not available at present.

    • Rob says:

      3 Feb3 February 23:02

      They are meant to be coming back in store. Allegedly a ‘dodgy batch’ forced the withdrawal pre Christmas.

    • Polly says:

      3 Feb3 February 23:31

      Michael,, be careful with the new amex ones, they don’t come under the 150 cc bonus! I had to beg for them when I noticed they didn’t show on my receipt..I thought they would be the same as the visa £50 ones. Good we might see 3V back soon, desperately awaiting them right now!.

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