Aer Lingus announces AerClub – and it will be revenue based. Will British Airways follow?

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• Save East Coast Rewards says:

  18 Nov18 November 04:40

  Doesn’t Flybe offer Avios based on amount spent?

  • Volker says:

    18 Nov18 November 07:09

    Yes, but the amount of Avios awarded also depends on the ticket type, e.g. 2 Avios per pound spent for the basic “just fly” ticket and 4 Avios per pound spent for “all in” tickets.

• RK says:

  18 Nov18 November 05:10

  The revenue based earning might not be a trial for Iberia or BA. Don’t forget that Aer Lingus is very different to BA in that is very much a mixture between a low cost airline and a mainstream one.

  On most UK and some European routes it is priced as a low cost airline (£20 one ways UK to Ireland are fairly simple to get in advance), BA rarely has flights at this price level. On other European routes and long haul routes it is priced at a much more mainstream level, e.g. £100 one way to Berlin from Dublin.

  Up to now Aer Lingus handled this wide range of prices by just not awarding airmiles to pretty much all low fare tickets. IAG may have decided that they wanted to award avios on all flights but with such variance in pricing, there would be no earning structure that would be economical unless they had ten different levels of earning fares – which would be too complicated and confusing for customers.

  In short, the revenue based model may make a lot of sense for an airline like Aer Lingus, without necessarily being something IAG would ever want to roll out to their other airlines.

  • RK says:

    18 Nov18 November 05:19

    That said American Airlines has just announced they are going revenue based so I could well be wrong.

    The most exciting thing about BA buying Aer Lingus will be the (presumably) ability to book avios on short haul Aer Lingus flights online. As someone who lives in London but flies home to the West of Ireland a lot, this will be really handy.

    I hope DUB-BOS goes back to 50k avios in J, now they will not be a partner airline but that may not happen.

    • James67 says:

      18 Nov18 November 06:44

      CX also recently announced revenue-based chnges.

    • Chris says:

      18 Nov18 November 08:16

      1. AA have changed redemption miles earning to revenue structure, elite qualifying miles remain on class of travel and it will actually be slightly easier to get status.

      2. AerClub says that avios earning will be revenue based (i.e. just like credit cards) but says nothing of the sort for ‘tier membership points’: these will be based on ‘activity’ (i.e. cabin based points system just like BA have just now).

      • Rob says:

        18 Nov18 November 08:25

        That’s not what it says – if you look elsewhere on the page it says it will be based on a mix of money spent and segments flown.

• James67 says:

  18 Nov18 November 05:12

  I don’t think this should surprise anybody and BA are almost certain to follow, it is the direction the industry is moving. However, most HFP readers seem to collect majority of their miles from nonflying sources so will be better insulated from change than most. Furthermore, so long as the competitive premium revenue fares continue, miles will become of lesser importance than they were but remain worth collecting povided they are valued appropriately.

  • RIccati says:

    18 Nov18 November 05:59

    I think the airlines (and SPG) have to be careful in these future revenue-based steps or they are going to be hit by “Why bother?” factor.

    If all that investment in differentiation and opportunities goes away, the entire travel industries will see a reduction in business. They are dropping loyalty programs, but it is strategic myopia of the global economic situation. Asia/BRICS middle class is not coming to occupy capacity and we all know what’s going on with business travel (more Economy).

    All these changes to FFP and hotel point devaluations (including removal of sweet spots) look more like an attempt to re-cut a pie and grab a bigger share. Everyone lures in and rewards that unicorn traveller with unlimited corporate travel budget, low sensitivity to prices, no time to stay in lounges, booking full price rates but not using their features (e.g., not changing flex bookings).

    • James67 says:

      18 Nov18 November 07:15

      To some extent the schemes have become victims of their own success, they are lucrative to the industry both in cash and customer loyalty terms. As such, the airlines and hotels will be well aware they have to get the balance right when it comes to maximising profit and retaining and rewarding their customer base. I think the devalutions are largely driven by efforts to reign in schemes that are getting out of control, and reduce and better manage liabilities than simple penny pinching by the airlines and hotels. There will be an element of ‘why bother’ as you say but that comes down to them getting the balance right. Although there is now a huge number of people who take points and miles seriously. the vast majority of those who collect them will continue to do so more passively. I don’t see that pattern changing all that much. For those passive collectors the devaluations are a huge hit and many may not even know it, but for those of us who take the hobby more seriously, we moan and grown for a while but ultimately absorb the hit and move on. As Raffles often says when one door closes another opens; that many of us have been busy of late cancelling ‘free’ redemptions to book premium revenue fares is testimony too that!

      • RIccati says:

        18 Nov18 November 10:18

        To put it simply,

        I see AAdvantage yesterday’s announced changes as sensible. Maybe that’s because I don’t try to make it a main program.

        April’s BA devaluation is on the border of sensible. The other actions with regard to fees/luggage-free fares are very much penny-pinching and offensive to elite flyers.

        However, with Marriott and Starwood, the SPG programs and the points might lose their value at a whim. That risk is real. Less people participate in Starwood than in BAEC, so hotel programs can do drastic changes easier. Hotels clientele must be active points collectors — or they would simply go for the cheapest room of the same quality/star rating. Differentiation works there.

        I agree the availability of affordable cash Business class fares to the East and West is a source of joy and things were not like that before. It signals though that capacity is here (ME3 airlines, upgraded planes, etc.) and it is not taken up by the middle class. Airlines are not in the strong bargaining position in front of a crowd who would be happy to pay £3K for a leisure ticket to Tokyo. (With miles, they have a hold on you because you can only buy award on their terms and fees.)

        HOWEVER, if most of the travel is optional (leisure, videoconferencing for business) then we need that boon of valuable points to buy business fares for cash. I have already shifted US travel to Economy, yes Business is nicer but I can survive 6-7 hours in Economy for £££ of savings, which I know what to spend on!

        • RIccati says:

          18 Nov18 November 10:21

          P.S. The stick that BA and AA are giving — less or no miles for Economy fares will not make me to change the economic decision to travel in Y. The carrot of 200% Avios or extra EQM on AA will not make me to purchase Business either.

        • Callum says:

          18 Nov18 November 11:34

          It’s not meant to do either of those things – you’d have to be a bit of an idiot to start buying business on the basis you’d get more miles!

          It’s to stop people like me who flies on a $500 fare then gets enough points to save $500 on a future flight.

        • RIccati says:

          18 Nov18 November 14:22

          Miles always work as a good inducement, well they do on me even if going Economy. I would go out of way to book AA-coded flights vs BA for that.

          AA gives a lot of mileage run ops, but its nowhere near that “spend $500 and save $500” — you might save by doing intra-US award when cash tickets are expensive but most of your miles will come not from flying. In fact, as long as there are many US issued credit cards with decent sign-up bonuses for AA, it’s pointless to fight mileage runs for the purpose of reducing redemptions.

          United went revenue-based but with Star Alliance there is a good range of programs to credit miles to. If I don’t get noticeable mileage value from AA flights, I will simply have to stop taking them!

        • Jason says:

          18 Nov18 November 11:48

          I got into points collecting about 5 years ago, seriously 2 years ago after coming across HFP, and struggled to earn enough points to do 4 flights in F to the ME during school hols without supplementing the miles by purchasing them.
          I now earn enough to do 8 a year, or pay cash with Qatar, don’t buy any miles and also use some miles for hotels as well.
          It may change as pay.coms were an easy way to earn tesco cc points which have disappeared, however another door may open.
          My recent experience was cancelling a redemption pre devaluation to buy in the Qatar sale. I was hoping to get to ME in F using 241’s and then to MLE. ME to MLE was coming out at £500 in economy, Oslo to MLE, in the sale was £740 each in J plus earning 24k avios each.
          I thought avios availability would get better post April but it doesn’t seem that way so avios, to me, is becoming less valuable and other programs like virgin( for Hilton transfer) currently more valuable 🙂

• Paul says:

  18 Nov18 November 06:31

  I can understand the concept of revenue based rewards but not how BA or others hope to benefit from this. Currently I fly premium classes based on the fare, the product and rewards. This keeps me on one world for which I am prepared to pay a small premium. If you remove rewards then the is little incentive to choose one world or chase status as I will simply go with the lowest fare on an airline I trust, which in Europe is almost everyone. I really don’t see how this helps airlines gain loyalty.

• Will says:

  18 Nov18 November 06:33

  It will be a bold move if BA follows suit and becomes the first European major to become revenue based. Delta did it in the states and the others have all followed. The question is if BA did move to revenue based would AF/KL and LH group follow suit?

  It also shows that the industry has changed. Let’s not forget that the airline industry has, arguably, been struggling for the last 14 years since 9/11. FF programmes in their current format were there to encourage us to fly and get bums on seats in premium cabins. Perhaps the move to a revenue based system shows that carriers are no longer having the issues they were having and don’t need to offer such generous FF programmes.

• Myer says:

  18 Nov18 November 06:54

  BA have already moved On Business to a revenue based system, so it seems logical that they will eventually do so with the Executive programme.

• harry says:

  18 Nov18 November 07:02

  It won’t remotely concern the RFS & HBO (ie European only) users such as ourselves. The points from fares are already zero or rock-bottom. But then – the RFS opps are much improved vs previously and the HBO fares are competitive with EJ/Ryanair provided you can organise your plans to get in T-355 or close.

• Sebastian says:

  18 Nov18 November 07:43

  Revenue fares do not bother me too much, since I primarily collect through credit cards and other means. However, this will be a reduction, although maybe not a surprising one with the move of Business flights now being sold at low prices.

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