How much money does Avios make and how many are sold each year?

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• Enigma368 says:

  14 Apr14 April 05:51

  .7p is what I and many people value an avios at. I think your valuation is close to .7p too. Interesting that Amex actually pay more for avios than many people value it at.

• zsalya says:

  14 Apr14 April 06:13

  I see “Over time the standalone platforms will be migrated to the Avios platform”
  Will this mean only one account per person, and only one source for availability?

  • Rob says:

    14 Apr14 April 06:39

    No, it is about all IT migrating to Avios I think

  • John says:

    14 Apr14 April 06:45

    That’s what it appears to mean. I hope not.

    The thing is the “Avios platform” is only available in UK and ZA (interestingly if you go to avios.com it now has more country options but they just lead to the “standalone platforms” of which Aer Club is going to become one) and BA and IB probably want to keep their own rules for redemptions, e.g. IB doesn’t have RFS.

• zsalya says:

  14 Apr14 April 06:17

  I think Slide 22 is showing scheduling of aircraft.
  What is the yellow?
  I wondered about daytime v nightime, but that doesn’t seem to match the shown times (even though they would be based on a common timezone)

• zsalya says:

  14 Apr14 April 06:18

  p18 If only they did mean complimentary airlines!

  • Genghis says:

    14 Apr14 April 06:26

    Good spot. You’d think they’d learn to spell wouldn’t you…

• anon says:

  14 Apr14 April 06:31

  “At Paris Orly, for example, IAG only operates two services per day (OpenSkies to New York)”

  ??? There are a lot of IAG services per day from Orly.

  Vueling is owned by IAG and serves well over a dozen destinations from Orly. Not to mention all the BA, IB and EC routes.

  • John says:

    14 Apr14 April 06:38

    Yeah, the presentation addresses this:

    – Our biggest airline (BA) for Parisian customers offers 2 destination from Paris Orly
    – Incorporating IAG airlines, the number of destinations served from Paris Orly increases to 27
    – Incorporating our remaining airline partners increases this further to 36 destinations

  • Raffles says:

    14 Apr14 April 06:50

    Fixed

• Mikeact says:

  14 Apr14 April 08:16

  But why is the SA Avios operation still treated as a stand alone business ?

• Scallder says:

  14 Apr14 April 11:07

  From what I take from those slides:
  1. They want to issue an extra 21 billion Avios in 2018 over 2015, an increase of 21% which would infer a lot more competition for reward seats.
  2. BA’s load factor of c78% on its short haul routes means that there should be a lot more capacity available to use Avios around Europe – it would seem silly for BA to not open this up to get a liability off their Balance Sheet and possibly keep customers happier due to more redemption opportunities.

  I really wish that BA having made a €1.9bn operating profit after exceptional items would do something to improve Club World to even bring it into line with a middle of the road business product, let alone compete with the ME3, but I can’t imagine that happening at any point in my lifetime…

  • Frenske says:

    14 Apr14 April 11:43

    You forgot about the ability to use Avios to part-pay for flights.

  • The_Real_A says:

    14 Apr14 April 13:20

    Its also about revenue management, and preventing people who would pay for a seat from redeeming. If all the excess capacity was available then this would hit revenue fares. What we need to find is a mechanism that ensures demand is additional rather than cannibalisation. A friend that works at a loyalty consultancy is involved on big data algorithm to do just this, but not in the airline industry.

    I can see things such as personal reward availability that is not available to other people become much more prevalent moving forwards.

    • Rob says:

      14 Apr14 April 15:18

      My simplistic proposal, which I know Avios has considered in the past, is opening I for redemption. This makes some sort of sense – Club World I-class fares are cheap enough that you wouldn’t be getting outsize value (probably not more than 1.25p per point and often much less). And, if that is the case, why not open them up? It would be relatively revenue neutral. You could restrict this to BAEC members if you didn’t want oneworld partners snaffling the seats.

      Writing algorithms is stupid because it separates the transaction itself from the person behind the Avios. Frankly, so what if BA could sell a seat for £100 more than the ‘cash and liability reduction’ of releasing it for Avios? The owner of those Avios is a customer who has given BA a lot of business and may be willing to give them a lot more if (s)he knows they can redeem without difficulty.

      If you ran a shop and you’d reserved an item for your best long-term customer but a stranger walked in off the street and offered you an extra 10% for it, would you sell it to him? Algorithm says yes, common sense says no.

      What we need is an airline to follow the lead of Starwood and Hyatt and say “if we have a room left for sale for cash, you can have it for a reward”. That is unlikely to happen but even meeting half way would be helpful.

      • Callum says:

        15 Apr15 April 02:31

        Your algorithm may say yes, it doesn’t have to though… It seems much more sensible to produce tweakable algorithms than to rely on a group of people using their common sense – which almost inevitably won’t all match.

        Nor do I see much business sense in giving away all your empty capacity as reward seats. Why would I buy an expensive last minute ticket if they’re just going to release it for redemptions?

• Scottnothing says:

  14 Apr14 April 11:39

  What I take from the slides is that Avios need some new people in their strategy / investor relations / corporate writing team. This slide deck is not very well put together. If IAG’s ultimate aim is to develop Avios as a stand-alone business and potentially spin it out as a separate company, they need to up their game. “The glue that connects customers for IAG airlines” … some of the worst corporate writing I have read in years.

  • Rob says:

    14 Apr14 April 11:47

    Par for the course, in fact it has less management-speak than most similar presentations!

    • Alan says:

      15 Apr15 April 02:19

      They also no doubt charged vast sums of money for writing a whole lot of corporate double-speak too!

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