Maximise your Avios, air miles and hotel points

Avios ‘moving to dynamic pricing’ – and other Investor Day news

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Every year, British Airways parent company, IAG, holds an investor day for the financial community to update it on what is happening.  The 2017 event took place on Friday.

The 126 pages of slides from this are available to the public and you can access them here (look under the IAG tab).  It is less painful than sitting through the entire five hour conference call.

Here are a few highlights from the slides, which cover all of the IAG operations:

BA:

“BA is a premium brand for all customers”

Profitability, punctuality, lost baggage and aircraft availability metrics all improved

Additional £200m added to the (notional) ‘£400m invested in Club World’ (don’t read much into this, the number is padded by replacement capex, necessary capex – new planes need seats! – and the new Gatwick lounges which many believe the airport funded to persuade BA to move)

New Club World seat to be rolled out from 2019 (no mention if just on the new A350 fleet or more widely)

Boeing 747 fleet to be refurbished from 2018 but phased out by 2024  (this process appears to be accelerating from earlier timetables)

Additional seats to be added to the new Boeing 787 aircraft (how? – they were designed to be pretty dense in the first place)

Boeing 767 aircraft to leave the fleet in the short term

Rome added to the list of 2018 lounge refurbishments (plus JFK and Aberdeen)

New long-haul Economy catering from January 2018 with ‘improved quality’

Changes to be made to the way the short-haul buy-on-board service operates (fewer choices, implication a crew member from Club Europe will help out)

Self-service boarding to be extended to EU short-haul from the current domestic trial

Overall performance of the maintenance unit is, financially, still behind the market due to high costs

Iberia:

Iberia financial performance much improved in a difficult environment

Additional 9 seats added to Iberia’s A320 fleet

Vueling:

Vueling ‘recovering customer trust’ after mass cancellations in 2016

Vueling wants “smart, digital, young and value maximising customers” (!)

LEVEL:

Low-cost long-haul flights bring in ‘80%-90%’ of the revenue of a full service airline with ‘10%-20%’ lower costs

LEVEL currently running at 90%+ load factors and is profitable

Potential for 15-30 LEVEL aircraft flying by 2022 (IAG has suggested it could use some of Monarch’s Gatwick slots)

Aer Lingus:

Aer Lingus performing well

New A320NEO LR fleet will open up much of US Eastern seaboard for single-aisle long-haul operation

Avios and loyalty

There was virtually no mention of Avios Group in the presentation, apart from the following bullet points which are copied verbatim from the slides:

“New management team in progress

Avios launched with EI and VY programmes

Single group points bank by June 2018

Customer improvements planned for BA and IB programmes

Progressive introduction of Dynamic Pricing from 2018

Group loyalty review in progress”

The ‘single points bank’ project has been mooted for years and is already substantially behind schedule.  The idea is that you will have one single Avios account, and all your activity from BA, Iberia, Aer Lingus etc will drop into it.

This will be more complex than the ‘Miles & More’ model, however, because there is not one single status / tier programme shared across the IAG airlines.  It will also require the various Avios airlines to harmonise their redemption and earning partners.  It’s not easy, which is why it is taking a long time.

‘Dynamic Pricing’ could mean anything.  This could work in a positive way with, for example, extra availability being released on busy flights for people willing to pay a premium.  Many airlines, eg Emirates, already do this.  BA already does it in a small way, allowing Gold members to get a seat on any flight for double Avios.

The negative risk would be moving to something that gets you nearer to a ‘revenue based redemption’ model, with mileage more closely linked to the cash cost.  This is a crazy model, however, and not even the major US airlines have dared try it in its purest form.  You only need to look at the, ahem, success of Nectar in the UK to see how excited people get about a ‘revenue based redemption’ model.

I would also stress the benefits of SIMPLICITY, which dynamic pricing can mess up.  Too many people I meet in the loyalty industry think that their members spend all day, every day, focused on their miles and points and are willing to understand complex schemes.  I don’t believe that, which is partly why we only publish stories in the morning and why most of our readers pop in at 9am for 5 minutes and then get on with their jobs.

The decentralised nature of Avios Group (which doesn’t even operate from the BA offices, it is down in Sussex) makes me think that it will fight any attempt to make points less valuable. 

The wildcard here is new CEO Drew Crawley, who I’ve not met yet and cannot measure.  He was parachuted in, literally overnight, after Gavin Halliday resigned to run Etihad Guest.

Anyway ….

If you want to learn more about any of this, there are 126 slides you can work through via the link in the first paragraph.  Get yourself a very large cup of coffee first.

What you will come to realise, however flippant we may be occasionally about the way the BA is run, is that (obviously) there is far, far more going on than is ever apparent to those of us on the outside.


How to earn Avios points from UK credit cards

How to earn Avios from UK credit cards (October 2021)

As a reminder, there are various ways of earning Avios points from UK credit cards.  Many cards also have generous sign-up bonuses!

There are two official British Airways American Express cards. Both have increased sign-up bonuses until 2nd November 2021:

British Airways BA Amex American Express card

British Airways American Express

10,000 Avios for signing up, no annual fee and an Economy 241 voucher for spending ….. Read our full review

British Airways BA Premium Plus American Express Amex credit card

British Airways American Express Premium Plus

40,000 Avios and the UK’s most valuable credit card perk – the 2-4-1 companion voucher Read our full review

You can also get generous sign-up bonuses by applying for American Express cards which earn Membership Rewards points, such as:

Nectar American Express

American Express Preferred Rewards Gold

Your best beginner’s card – 30,000 points, FREE for a year & two airport lounge passes Read our full review

American Express Platinum card Amex

The Platinum Card from American Express

60,000 points and an unbeatable set of travel benefits – for a fee Read our full review

The 30,000 points bonus on Amex Gold runs to 9th November 2021. The 60,000 points bonus on The Platinum Card runs to 2nd November 2021.

Run your own business?

We recommend Capital On Tap for limited companies. You earn 1 Avios per £1 which is impressive for a Visa card:

Capital On Tap Business Rewards Visa

The most generous Avios Visa or Mastercard for a limited company Read our full review

You should also consider the British Airways Accelerating Business credit card. This is open to sole traders as well as limited companies. This card has a limited time offer of 60,000 Avios when you sign up:

British Airways Accelerating Business American Express card

British Airways Accelerating Business American Express

60,000 Avios sign-up bonus – plus annual bonuses of up to 30,000 Avios Read our full review

Click here to read our detailed summary of all UK credit cards which earn Avios. This includes both personal and small business cards.

(Want to earn more Avios?  Click here to visit our home page for our latest articles on earning and spending your Avios points and click here to see how to earn more Avios this month from offers and promotions.)

Comments (98)

  • Ian says:

    “Progressive introduction of Dynamic Pricing from 2018…” knowing IAG I doubt this will be something positive. I find that a little concerning.

    • Phil says:

      I share your apprehension.

      • the real harry1 says:

        yep but there’s no point worrying about it – many people seem to be gloomy by nature (though they could legitimately say they’re simply not being naïve) – just look at all the people posing scaredy cat fears about upcoming 2-4-1s when the evidence shows that the downgrade risk is minimal

        on the premise that the change/s will probably be negative rather than positive, would you really reduce your efforts to acquire Avios?

        you might – I suppose – use more of your stsh, sooner, or lock in value by making some T-355 bookings

        personally, I’m not going to waste time fretting about it – otoh it was well worth getting screenshots of the food & drink offer when we got wind of changes afoot in 2016, as that made it pretty black & white in my compo claim (I got £300)

      • Lady London says:

        “Customer improvements planned for BA and IB programmes
        Progressive introduction of Dynamic Pricing from 2018”

        – Hum. Why do I see the word “enhancement” in place of improvement here.
        I think it’s going to go much more revenue-based.
        – I’ll guess that BA will give something that is not worth very much to very many people, and take away what is worth a lot to a lot of people.
        – Seems clear that Avios will be floated off to be an independent operation, which is probably why we’re not hearing much about it.

        Like Rob says, BA has very long-range plans which unfold slowly. The repositioning of shorthaul to an “aspirational” low cost version of Ryanair, has unfolded slowly and is clear. The steps to ruin what remains of the reward program may now be unfolding little by little too.

        • Rob says:

          Impossible to float Avios after what Air Canada did (float scheme then scrap contract with it and launch a new one).

        • the real harry1 says:

          but an independent Avios company will only have been floated with cast-iron guarantees from IAG about future IAG usage ie Avios reward commitments – it couldn’t raise as much when floated, otherwise

          I’d imagine those guarantees will extend 10 years ie unytil at least 2028, giving us good certainty on redemptions

          and Avios Newco will have unprecedented freedom to innovate and bring value to people collecting & using Avios as a currency

          • Rob says:

            Air Canada gave 20 years, company is now worthless (apart from Nectar, ahem).

            That’s not why AC pulled out. It had no control. Aeroplan ran the AC credit cards for example and Air Canada was banned from operating one. More importantly, AC did not know who Aeroplan’s members were. That is a big problem these days.

    • James says:

      I’m hoping it will be good news but my experience of BA over the past few years tells me it won’t be 🙁

      A good opportunity for BA to turn our general impressions around.

    • Alan says:

      Related (but mentioned yesterday at the end of the day so probably not seen by most folk), but AF/KL Flying Blue is rumoured to go revenue-based for earning from April next year, apparently announcement due tomorrow. No mention of revenue-based redemptions though, seriously hope BA don’t lead the way with this one!

    • TripRep says:

      Hmmm, makes me wonder about the increased risk of pax effectively being gazumped. ie Like a Gold forcing availability and an existing cheap redemption being first in line for downgrade or bump onto a later flight.

      • CeliaG says:

        Please forgive a HFP virgin, who really doesn’t understand a lot of what you are all talking about much of the time, but does “an existing cheap redemption being first in line for a downgrade” have anything to do with redemption seats being removed from flights on BA Redemption Finder? I am probably being very stupid but could someone please explain anyway?

        • Rob says:

          No. BA now seems to prioritise Avios seats for downgrades if a plane is full, as EU compensation rules make it financially attractive to do so.

  • Tim says:

    There will be a tipping point. And after that point, the annual IAG presentation will still show graphs pointing upwards. The question is: has the tipping point already been hit? Or will it be next quarter or next year? On another note: Plaza T5 lounge due to open tomorrow. Mr Plaza Premium is allegedly flying in from HK to cut the ribbon…

  • Andy S says:

    What is “self service boarding”?

    • JamesB says:

      Scan your boarding pass on a gate, a bit like the underground but not as smoothas oyste.r

    • Alan says:

      Nothing exciting, just like you do when entering security. On the upside it saves the double scan you used to need (G4S for biometric then BA for boarding) and combines it into one.

      • Save EC Rewards says:

        They saved the double scan on domestics well before these automatic gates came about. I was done in a bit of a clunky way. The BA agent had two scanners, one to check your photo and the second to board you.

        • Alan says:

          Ah – shows how little I’ve been flying through T5 lately! Only made it through the First Wing a few weeks ago! Recent flights have either been connecting on to T3 or direct from EDI.

    • Clive says:

      Does this enforce boarding priority at least?

      • Alan says:

        I doubt it – in particular as some folk may have status with one OW airline but be crediting to another.

      • John says:

        I haven’t tried it on BA, but in Germany and Scandinavia priority boarding is sometimes done with a human and then everyone else is self-service. (But if you want to arrive just on time rather than standing around for 20 minutes, then you queue up with the rest of the horde.)

    • Rob says:

      Like a passport egate.

  • bagoly says:

    I noticed only this week that the Avios Redemption pages now do not show how many Avios will be required until one selects specific flights.
    This is a particular nuisance when one has flexibility about which class to fly or which route to take to a given destination.
    Hopefully some comparison website will fill the gap.

  • James says:

    You mention the new Gatwick lounges, have you reviewed them ?

    I searched HFP for ‘Gatwick Lounge’ and found this Feb 17 mention as the latest news.
    https://headforpoints.com/2017/02/06/avios-amazon-echo-alexa/

    Flying BA CE from LGW in a few weeks and wondering about lounge options. I have OWE through QR Plat.

  • Crafty says:

    Was he literally parachuted in, though? Would be quite the grand entrance.

    In all seriousness this is a hugely negative signal, and adds further weight to my belief that Avios should be considered a relatively short term, earn and burn game.

  • Temp says:

    Rob, any idea what the ‘group loyalty review’ is?

  • fiona says:

    Improvements to long haul economy catering- please not BOB. It is bearable if you don’t get anything on a shorthaul but just not on for long haul.

    • Tim says:

      I was against BOB and still am. You just have to take a LCY flight to see the difference in crew interaction. However, on 4000 Avios routes – UK domestics, Paris, Brussels, Prague etc CE is only 2000 more Avios points and an extra £2.50 in some cases on the inbound. And BAEC G gets you a seat in row 1, even at the last minute. In my mind, I just view BAEC redemptions as 6000/7500 Avios points plus £20 to £35. Which is pretty good value for CE, in my opinion. The case weakens substantially beyond Zone 1 though.

      • John says:

        Which CE route is 6000 avios?

        • Tim says:

          Sorry – I meant 7750. Getting my multiples mixed up. PRG to LHR 7750 plus £20 off-peak. So an extra £37 of Avios points and £2.50 cash.

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