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British Airways to pay 2.2 billion Avios points to settle a US Class Action lawsuit settlement

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If you lived in the United States between November 2006 and April 2013, you could be in line for a windfall following the proposed settlement of a class action lawsuit against British Airways over Avios redemptions.

The case – put simply – was that British Airways added surcharges to Avios redemptions in breach of Executive Club terms and conditions.  Whilst these were called ‘fuel surcharges’ there was no proof that they bore any relation to changes in the cost of aviation fuel.

For clarity, British Airways has not admitted it was at fault and no court has found otherwise – but the airline is handing over a pile of money to make the case go away.

Avios wing 9

You are in the money (well, Avios) if:

You booked an Avios redemption (100% Avios, not ‘cash and Avios’) between 9th November 2006 and 17th April 2013

You had a United States address on your BAEC account at the time of booking and gave a US address for whoever was flying, if it was not you

The taxes and charges paid included a fuel surcharge

You will get:

12,500 Avios for one redemption

20,000 Avios for between two and five redemptions 

35,000 Avios for six or more redemptions 

Avios will be awarded within 30 days of the final settlement being agreed.  The court is expected to rubber stamp the settlement on 27th July but BA has further rights to appeal which could extend the process by another year or more.

Alternatively, you can opt in to take a cash alternative which is roughly 17% of the fuel surcharges you paid.

Assuming that everyone takes Avios, a total of 2,228,677,500 Avios will be awarded.

The Avios will be awarded automatically to all BAEC members who made qualifying redemptions during the period.  If you want the money, you need to specifically opt in by 29th July.  If you have closed your BAEC account in the interim, your only option is to receive cash and you need to specifically opt in.

You retain the right to opt out of this settlement and sue BA directly if you wish.

Don’t worry about sending a thank you note to the lawyers.  They are asking for almost $15m in fees and expenses for their work (the fee represents 28% of the settlement value) although you are allowed to object to this if you wish.  The court will consider your objection before deciding whether to approve the payment.

PS.  This settlement is only for US residents.  Whilst UK residents paid similar fuel surcharges over this period, they are not included.  Will any UK law firm now raise a similar case?

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Category

British Airways and Avios

Comments (80)

This article is closed to new comments. Feel free to ask your question in the HfP forums.

  • KP says:
    1 Jun1 June 10:25

    I dont know whether to laugh or what!!

    • Andy says:
      1 Jun1 June 21:50

      I see that ‘journalist’ at OMAAT has copied this article without citing HfP…

      • Rob says:
        1 Jun1 June 21:52

        All long-term US BAEC members got the same email, to be fair. The last line is a bit familiar though 🙂

        • Andy says:
          1 Jun1 June 22:15

          Indeed, the last paragraph in his article is what rung the alarm bells for me…it’s almost a carbon copy…

        • IMH says:
          2 Jun2 June 13:44

          This long-time US member hasn’t received anything from the lawyers yet. Nor has my spouse. Both registered in the US from 2006-2018.

      • Leo says:
        2 Jun2 June 07:33

        He has form for that. Biggest BA (and UK) basher in the business.

        • AspirationalFlyer says:
          2 Jun2 June 07:53

          I’ve previously commented on that site as to why it is so negative not just about British Airways but the UK in general. I never received a response. Some of it seems to go well beyond legitimate fair comment/reasonable opinion.

        • Lumma says:
          2 Jun2 June 09:15

          There’s a review on that site about Virgin Atlantic and it’s ridiculous how anti British it is, even more so than usual. It’s not by “Lucky” but by one of the other contributors

        • Andy says:
          2 Jun2 June 13:09

          Yes, OMAAT has an odd visceral hatred for anything British…I think he hasn’t yet fathomed his prejudices alienate a fair proportion of readers

      • Rob says:
        2 Jun2 June 10:23

        We could sit here all day and discuss the merits of whether I should spend an hour removing formatting code from a long list when someone else has already done it and I could just cut and paste it ….

        As it happens, the IHG lists are now more ‘cut and paste’ friendly directly from the IHG blog.

  • @andrewseftel says:
    1 Jun1 June 10:28

    My calculations* put that at 1.7 cents per Avios. I would have thought the smart move would be to take the cash. Sounds like a decent result for BA – I can’t imagine they are taking a balance sheet liability at that valuation.

    * assuming $15m/.28-$15m = $38.6m paid out to customers. $38.6m/2.23bn = $0.017

  • DavidK says:
    1 Jun1 June 11:04

    So there is a serious prospect of a devaluation?

    • Terry says:
      1 Jun1 June 11:45

      Just a click bait headline…

      • Rob says:
        1 Jun1 June 12:31

        The BA board has already signed off on the devaluation as I understand it, it was due to be done at the April board meeting. The IT implementation appears to be an issue though. As the ex-Avios CEO is the guy running Etihad Guest now I think you have a feel for what it will be.

    • Roberto says:
      1 Jun1 June 11:46

      Well they can just “print” some more of course like the government does in the form of quantitive easing but that does effectivly devalue avios.

      Whilst I agree its not the same as Sterling , no bank rates or such like, Avios are a form of currency and does have an arbitrary value which will surley change based on an extra 2 billion plus in circulation. How ? – I have no idea.!!

      • callum says:
        1 Jun1 June 12:04

        It may make it slightly harder to find redemptions on AA and Alaska, I wouldn’t imagine the small amounts given per person would result in an enormous difference to the valuation though.

        • Alan says:
          1 Jun1 June 17:05

          Yes, I was thinking that too – I don’t think it’s quite as simple as the printing money analogy as it’s not as liquid an asset.

    • Rob says:
      1 Jun1 June 12:32

      See other reply. BA board has already approved it.

      • Rockstar says:
        1 Jun1 June 12:48

        In your opinion, when do you think that these devaluations would affect the redemption chart and by how much?

        • Rob says:
          1 Jun1 June 13:52

          No idea. No idea either whether earning or spending comes off worst.

      • Alan says:
        1 Jun1 June 13:10

        Any details??

      • Drennan Duplooy says:
        1 Jun1 June 16:32

        Any thoughts on how much notice we’d be given, re the recent overnight no warning situation?

  • william merrett says:
    1 Jun1 June 12:03

    97 billion avios issued in 2013, certainly not pocket change but relatively small numbers in the grand scheme of things.

    All in all good that BA have been held accountable for the charges, they should at least be properly named.

    • the real harry1 says:
      1 Jun1 June 19:59

      so BA is issuing £970 million (or more these days) of Avios a year? @1p valuation

      who needs crypto-currencies when you own a printing press & an airline points scheme?

  • ChrisC says:
    1 Jun1 June 14:09

    “devaluation alert” in the title but no mention of one on the article and if there is any details.

    I thought this site was above doing click bait a la the Daily Mail

    someone in the comments did mention it ‘issues’ I wonder if these are related to the ongoing problems with being unable to do a proper avios reward search on some routes and cabins.

    • Rob says:
      1 Jun1 June 14:46

      It is relatively clear that to anyone with GCSE Economics that printing money leads to inflation and devaluation ……

      • callum says:
        1 Jun1 June 14:57

        Well, printing excessive amounts leads to inflation and devaluation. If you never printed any money then there would be a whole different load of issues!

        I’m not sure a one-off issue of up to 1-2% more Avios than would normally be issued really affects inflation or devaluation

      • Drennan Duplooy says:
        1 Jun1 June 16:08

        All good responses, Rob. Might be a good blog topic on how this might affect UK redemptions and within what timescale etc.

      • ChrisC says:
        1 Jun1 June 16:49

        no need to be rude.

        the number being issued is hardly excessive when considered against the number issued either in a single year and a rounding error over a number of years

        YOU could have written more on the supposed devaluation but you didn’t just left it there in the headline.

      • thomas howard says:
        1 Jun1 June 18:38

        Then it produces inflation in whatever asset you choose to store it. The major central banks have printed trillions since 2007/8 and consumer price inflation has remained low. Stock markets and house prices, however, have exploded.

      • Charlie T. says:
        1 Jun1 June 23:18

        Inflation has indeed been low but it has been a helluvalot higher than the deflation that would have occurred had the printing presses not been turned on.

  • Jim says:
    1 Jun1 June 14:31

    In addition to the question of whether a UK law firm might bring a case a more interesting question might be a general USA case based on fuel surcharges without justification

  • Lady London says:
    1 Jun1 June 15:05

    I don’t mean to be rude, but is everyone really that dense?

    Guys, listen up.

    • Drennan Duplooy says:
      1 Jun1 June 16:17

      How very rude of you, Lady London ;-)). Any tips on where to move those large Avios stashes?

      • Lady London says:
        2 Jun2 June 17:53

        Spend them quick if you possibly can.

        If you can’t spend them on flights then there are things you can move them to that have been well covered by Rob here – although those – like hotel points – seem to be lower value than flights.

        Remember Tesco seems to be unwinding any decent collection or conversion offers that they had, and selling off everything too. I’ve just had a cheesy letter from them that Tesco opticions “has joined another family” or something.

        If anyone needs any more hints then coverage here and elsewhere in the past six months or so… well I can’t help anymore really. I’ve been burned so many times in the past I’m now slowly learning to spot the signs and hints myself!

        • Mr(s) Entitled says:
          2 Jun2 June 23:02

          With the caveat that you should spend them wisely over quickly.

          Wasting a ton of avios to go somewhere you didnt really want to go vs spending more post devaluation to go somwhere you want. Without knowing what or when the devaluation is it is a hard call to make.

          While I do state further below that earn and burn is the best way, that is more of a mentality that makes sense over the long-term. Burning now for the sake of it is knee jerk.

    • Brian W says:
      2 Jun2 June 01:37

      Perhaps you could “lay it on a plate for us LL”? Above your station is an understatement.

  • AndyW says:
    1 Jun1 June 16:13

    This may be somewhat naive, but handing out a load of avios as compensation, and then immediately devaluing said compensation, sounds like somewhat shaky ground. Common sense would be to wait just long enough so that no one links the two, though this is BA of course.

    • Drennan Duplooy says:
      1 Jun1 June 16:26

      What they give with one hand, they take away with another. Ruthless new head honcho in charge also, to Rob’s point.

This article is closed to new comments. Feel free to ask your question in the HfP forums.

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