BA sale

Major restructuring (devaluation, for most!) of BA On Business announced

Links on Head for Points may pay us an affiliate commission. A list of partners is here.

A few days ago I wrote about how On Business redemptions (the British Airways loyalty programme for small companies) now represented better value due to the removal of fuel surcharges.

It seems I spoke too soon.  A major restructuring of On Business was announced yesterday. Full details can be found here at ba.com.

In some ways the changes are very similar to what is happening to the Avios programme:

Redemptions in Eurotraveller / World Traveller become proportionately cheaper

Redemptions in premium cabins become proportionately more expensive

With a twist:

The programme is going 100% revenue based.  The points you earn will be based ENTIRELY on the amount you spend.  For the purchaser of cheap economy flights, every redemption will be harder to earn in the future.

There is one difference to the Avios changes:

Your existing points will buy you the same as you can buy today and in some case you will get a lot more

British Airways 350 3

The winner, as with the Avios changes, will be the rarely-spotted individual who flies exclusively in Club World and First on fully flexible tickets during the week but who loves nothing more than jumping into a World Traveller seat when he travels for leisure.

The changes to On Business are even more far reaching than the Avios changes:

Three membership tiers will be introduced, based on £ spend.  A base level member earns 1 point per £1.  Spend over £30,000 and you move to tier 2, earning 1.25 points per £1.  Spend over £300,000 and you move to tier 3, earning 1.5 points per £1.

Your spend to date will be backdated to the start of 2015.  This will include spending with American Airlines and Iberia although it is not clear how BA will track this.

US members of On Business will have their accounts closed and transferred to the American Airlines small business scheme.  It is not clear yet if UK members of the AA scheme will be forcibly transferred to On Business.

There is some good news which will benefit everyone:

Points can be earned and redeemed on Iberia and American Airlines flights.  This is a change from the current position.

You can agree to waive your points for a cash discount.  A saving of ‘5% or more’ on the ticket price will be available on ‘selected flights’ if you choose not to earn points on your booking.  This may be a better deal for most people.

Almost all tickets can now be upgraded with points.  Far more economy tickets will now be eligible for upgrading.  The cheapest Club World seats will also be upgradeable.

Upgrades look like good value at first glance.  They start at 5,000 points long-haul for World Traveller to World Traveller Plus, from 10,500 for World Traveller Plus to Club World and from 7,000 points for Club World to First.   These are one-way prices.  Remember that On Business availability is better than Avios availability so you have a decent chance of being able to upgrade if you wish.

These prices are so generous that someone who travels on fully flexible Club World tickets for a Tier 3 company will earn almost enough for a one-way upgrade to First for every return trip they take.  I’m not sure this is sustainable.

No new members will be accepted into On Business between 27 April and 27 May.  Current members will be able to redeem at the old rates until 24 May.  The programme will then close for two days before the new scheme is launched on 27 May.

What about current members?

Interestingly, BA has decided to double the existing points balance of every member.

This is, genuinely, of value at the lower end.  I currently have 2,700 points.  That will get me 86% of a return flight to Hamburg in Economy or 15% of a Club World return to Dubai.

On May 27th, I will have 5,400 points.  This is enough for 2.4 return flights to Hamburg in Economy – the value of my points is almost tripled.  The bad news is that I only have 13% of a Club World return to Dubai.

Let’s look at it another way.  At the moment, a Club World return flight requires roughly 300% of the On Business points required for a World Traveller flight.  That is changing to roughly six times.

Effectively, most small companies can now forget about redeeming for long-haul premium classes.  You would need to spend roughly £40,000 to earn one Club World return to the Middle East.

In the short term, I am a winner.  My 2,700 points were almost worthless and now I have enough to get both parents in law across from Hamburg and back.  In the long term, I am a loser.  I now need to spend £2,700 with British Airways to get one economy flight to Germany.

What impact will this have?

It is difficult to know what impact these changes will have.  As with the changes to main Avios scheme, they seem poorly thought through.

The small business, spending only a limited amount on European flights throughout the year, is being told that it is not wanted.  Coupled with the cut to Avios earning, owner-managers are more likely to seek out easyJet and other options.  They may want to take a look at PartnerPlusBenefit, the Star Alliance small business programme.

Larger companies are flying British Airways anyway.  This is unlikely to change their behaviour – I know from experience how an individual traveller will try to get himself onto a BA flight because he needs the tier points, but no company travel department is going to behave that way!

I would be interested to know how larger companies deal with their points.  My last employer used to have a raffle amongst the PA’s at Christmas and the winner was given our entire annual OB points total to spend as she wished (we may even have paid the taxes!).

Full details of the changes can be found on ba.com here.

(Want to earn more Avios?  Click here to see our latest articles on earning and spending your points and click here to see our list of current Avios promotions.)

easyJet Plus - £22-£37 off via Amex and now bring TWO bags into the cabin
How to get your morning coffee for free with points!
Click here to join the 14,000 people on our email list and receive the latest Avios, miles and points news by 6am.

Hilton India and SEA sale
Amazon ad
BA sale
About Head for Points

We help business and leisure travellers maximise their Avios, frequent flyer miles and hotel loyalty points. Visit every day for three new articles or sign up for our FREE emails via this page or the box to your right.

Comments

  1. I *think* this will benefit me.
    The company I work for do not use BAOB, so as I have a ltd company registered for the odd bit of consultancy work I do, I have an OB account which I add to my work flights.
    My flights are mostly UK Domestic or European Shorthaul in Economy, however due to the erratic nature of business I often end up spending £silly on an LCY-GLA return at late notice.
    Would that therefore mean I end up with more points?

    • If you are paying silly prices, you will earn more points per flight. The question is whether you % increase in the points you earn is smaller or larger than the % increase in the price of your preferred reward.

  2. BlueHorizonUK says:

    Is there a signup promotion for OnBusiness at the moment?

    Thanks

  3. TheChiefExecutive says:

    I think our small limited company may gain from this ‘enhancement’. We mainly fly LHR – GLA which earns 30 points return total. We’ve collected around 2000 points which would get 1 UK domestic at the current rate of 1560 points. Our points will be doubled in May, the new rate will be 2200 points for UK domestic, so with the NY flight we already have booked we should just tip into getting 2 flights instead of the 1 we’d qualify for now.

    Our new earning rate will be 1 point per £1 so a typical UK domestic return will be 120 points – just over 18 flights to earn a free one. Of course you still have to pay the taxes, so it’s not free, more like half price. We didn’t join OB expecting much and we’ve not been disappointed. We mistakenly thought the gate signs offering priority boarding to UK Business ticket holders meant On Business members (as there are no business seats on UK domestic anymore) and only discovered this month that we were wrong about this (although let’s be honest almost anyone can priority board).

    On a note about the BA exec club avios scheme, I received a market research invitation from Nunwood because I’d been trying to book a reward flight. It asked specifically about booking rewards. Working through the survey there are questions about whether you will continue to collect in the next 12 months, and whether you will continue with the BA Amex. This survey may or may not have been in circulation before the changes were announced. Anyone else had it?

  4. The single biggest improvement to OB as far as I am concerned would be to improve the website to make things like upgrading one leg only possible (ie so I get a bed for night time flights) and to be able to upgrade after booking. Those too improvements would make the scheme much more attractive to me.

  5. Totally OT: Raffles can you give me tips on what to do with 11k M&M miles that will expire shortly? If my FTL lapses at the end of this month do they expire as well?

    Can’t believe that while there are “mileage bargains” they are only for flights booked so far out that the revenue price is less than the ‘taxes”. Given they are not flexible, there is no advantage whatsoever.

    Transfer to Hilton? There must be something I can do fly wise…

    Thanks.

  6. Will the balance be added to the final reckoning in may or when? So its not worth using ob points atm

    • Depends what you want to do with them! Your balance doubles but the cost of Club World and First redemptions doubles too! Economy redemptions will get a lot cheaper so you should definitely wait for those.

  7. @alastairtravel says:

    To clarify the 5% discount option has been available for some years when booking through TMCs (Travel Management Companies).

    It is only for selected (but most) long haul routes – the key benefit is the flexibility rather than the discount.

    • I had the BA Press Office onto me on Saturday afternoon, amazingly, to tidy up the mistake about the discount I put in the original article. The joy of modern technology is that I could actually correct it whilst standing in the toy department in Harrods!

      • Shame they didn’t get in touch about anything meaningful – like perhaps restoring free domestic connections for those outside London! 😀

  8. “I now need to spend £2,700 with British Airways to get one economy flight to Germany.”

    However much BA enhance things they still don’t sink as low as Nectar. Spend £2700 on Virgin trains and you’ll get £27 worth of points. So for me the Avios + OnBusiness combo will be more rewarding compared to the train.

    Whether I’ll fly more or not depends on other factors too. I do prefer the train, but if price rises or they make cut backs then the plane may look more attractive (as I have lounge access). The lounge makes up for the new cabins and the micro-crisps.

Please click here to read our data protection policy before submitting your comment.