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Iberia’s new ‘earn Avios based on your spend’ scheme gets messy before it starts

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Iberia Plus, the Avios-based loyalty scheme for British Airways’s sister airline Iberia, recently announced a massive overhaul of its Avios earning structure.

Effective from this month, the Avios you earn will no longer be based on the cabin you fly and the distance you travel

From some time in November, the Avios you earn will be based exclusively on what you spend and your elite status. Iberia has also announced that British Airways will move to the same model in 2023.

British Airways to change how you earn Avios

Full details can be found on this page of the Iberia website.

British Airways claimed in the official press release, that this will:

unlock even more opportunities for our Members to earn Avios when they fly.”

In truth, it represents a sharp cut in Avios earned for most people, except for those on fully flexible tickets which are generally paid for by their employer.

What is changing with Iberia Plus?

One alleged selling point for the new arrangement is that it is simple. The number of Avios you earn per Euro is based on your status in the Iberia Plus programme.

In fact, Iberia claims that members actually wanted to earn fewer Avios when they fly:

In future it will be clearer and simpler, the way you like things.

A base level member earns 5 Avios per €1, whilst an elite member will earn up to 8 Avios per €1.

Take a look here:

It’s so simple, Iberia is already having to mess with it

It isn’t simple at all, of course, because Iberia is basing your earnings on the NET cost of your ticket, after taxes and external surcharges have been deducted.

This information is tucked away and makes it very difficult to know in advance how many Avios you will earn.

After all, taxes and external surcharges can make up 90% of the cost of an inflexible Economy ticket but only 5% of a fully flexible Business ticket.

Iberia has already realised that this arrangement doesn’t work

The new ‘earn based on what you spend’ method is great, it seems, except when it isn’t.

Flights to Latin America will earn more Avios

The only routes where Iberia faces real competition, long haul, are those to Latin America.

The airline has now realised that 5 Avios per €1, after stripping out the taxes, is going to be so weak that customers will defect to other airlines.

It has announced that flights to Latin America (Central America, South America, Caribbean) will NOT follow the chart above.

Instead, there will be a separate chart which is 2 Avios ‘bigger’. This means that it starts at 7 Avios per €1 and goes up to 10 Avios per €1.

Flights between Madrid and Barcelona will earn more Avios

High speed rail is tough competition for flights between Madrid and Barcelona. This is despite Iberia offering a ‘turn up and go’ shuttle service where you are not tied to a particular flight.

In an attempt to keep passengers from defecting, this route has also been removed from the main earning chart.

There will be a separate chart which is 1 Avios ‘bigger’, running from 6 Avios to 9 Avios per €1.

British Airways to change how you earn Avios

It still might not be enough, given the cutting of elite bonuses

Part of the problem with Iberia’s new scheme is that it is alienating elite flyers by cutting elite bonuses.

Historically, you got a bonus of 25%, 50% or 100% of Avios earned based on your status.

If you do the maths on the numbers above, working from a base level of 5 Avios per €1, elite status bonuses have been cut to 20%, 40% and 60%. Because stuffing your top tier members is the way to go ….

We said this model doesn’t work, and Iberia is helpfully proving it

This model of earning Avios has been used by other airlines and is generally agreed to be a dud. The only exceptions are Finance Directors, who can easily understand how the cost of miles is linked to the money coming in and so like the idea.

Those who think more carefully about these things usually don’t agree. This is because you are rewarding the wrong people most highly.

The people who are flying on £10,000 fully flexible business class fares to New York are the ones who are laughing all the way to the mileage bank. However, with few exceptions, these are corporate travellers whose choice of airline is made by their employer. You could give these people zero miles and it wouldn’t impact the money that their employer spends with the airline.

Similarly, it is (duh) the fullest flights which charge the highest prices. Because these flights are ALREADY full, it makes no sense to spend most of your loyalty budget rewarding the people who fly on them. Those seats would sell anyway, multiple times over. I didn’t see anyone offering incentives to buy Peter Kay tickets last week.

On similar logic, fares are higher on routes where there is no competition – but on routes where there IS competition, and where fares are lower, the lure of Avios is more important. Weirdly, you will now be rewarded more for flying expensive routes where only British Airways or Iberia could have got you there. You will earn fewer Avios on competitive routes where you can choose between carriers.

This final point (competitive routes have cheaper fares) is why Iberia has now been forced to abandon its ‘simple’ chart and increase the Avios earned where it is fighting for passengers (Latin America and Madrid to Barcelona) in order to keep people flying.

The only upside from this, apart from some amusement that Iberia already seems to realise that it has messed up, is that the problems should be ironed out before British Airways goes the same way. It wouldn’t surprise me, for example, to see a higher elite bonus when BA announces its plans.

You can find out more about the Iberia changes on its website here.


HFP-Barclaycard-Avios-Card

How to earn Avios from UK credit cards (December 2022)

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

In February 2022, Barclaycard launched two exciting new Barclaycard Avios Mastercard cards with a bonus of up to 25,000 Avios. You can apply here.

You qualify for the bonus on these cards even if you have a British Airways American Express card:

Barclaycard Avios Plus card

Barclaycard Avios Plus Mastercard

25,000 Avios for signing up and an upgrade voucher for spending £10,000 Read our full review

Barclaycard Avios card

Barclaycard Avios Mastercard

5,000 Avios for signing up and an upgrade voucher for spending £20,000 Read our full review

There are two official British Airways American Express cards with attractive sign-up bonuses:

British Airways American Express Premium Plus

25,000 Avios and the UK’s most valuable card perk – the 2-4-1 voucher Read our full review

British Airways American Express

5,000 Avios for signing up and an Economy 2-4-1 voucher for spending £12,000 Read our full review

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

American Express Preferred Rewards Gold

Your best beginner’s card – 20,000 points, FREE for a year & four airport lounge passes Read our full review

The Platinum Card from American Express

30,000 points and unbeatable travel benefits – for a fee Read our full review

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, along with a sign-up bonus worth 10,500 Avios.

Capital On Tap Business Rewards Visa

10,500 points bonus – the most generous Avios Visa 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 and has a 30,000 Avios sign-up bonus.

British Airways Accelerating Business American Express

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

There are also generous bonuses on the two American Express Business cards, with the points converting at 1:1 into Avios. These cards are open to sole traders as well as limited companies.

American Express Business Platinum

40,000 points sign-up bonus and a £200 Amex Travel credit every year Read our full review

American Express Business Gold

20,000 points sign-up bonus and free for a year 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.

Comments (117)

  • Mikeact says:

    If BA alone have around 13 million members, how many of these are serious Avios collectors…..do the majority have a few Avios tucked away, never to be used ?
    Thinking back to the AirMiles days, I for one still have a couple of thousand paper vouchers
    obviously unused and obsolete. I guess that suits BA/IAG….the more Avios that will never used suits them just fine. And the majority of BA customers will probably never be aware of any changes and couldn’t care less anyway, they will still fly regardless.

    • BA Flyer IHG Stayer says:

      Dont forget that most of those small collectors will likely lose those avios after 3 years of no activity and that suits IAG nicely as they fall off the balance sheet

    • Chrisasaurus says:

      Arguably not; anyone who has their balance reset is given a compelling event to try another airline on their next booking and is shown that the Avios have no value to them as they won’t get to use them. (I presume the reason for the Virgin Red move for VS was that it allows virgin miles to appeal to flyers who will never meet the high bar for a VS redemption.)

      The lure of loyalty points will always have an influence on human decision making but reminding customers every few years that they’ll never see any value from them doesn’t make a huge amount of sense, particularly if as you say they weren’t going to use them anyway and could have been mostly written down by the airline accordingly.

  • Ian says:

    A niche winner here is residents of the islands as we receive 75% discount off the fare before taxes. As a data point my last PMI-MAD rtn earned me 750 avios (250 minimum + 125 oro bonus each way) for a flight that cost (originally) 114€ ex tax, which would now receive 798pts. However I actually only paid €27 for the flight so get an effective earning bonus of 29 pts per € spent!

  • PH says:

    Suddenly lots of corporate travellers find themselves needing to fly on the most expensive days/times, with more flexible tickets and checked bags on short-haul…an uptick in ‘override policy exceptions’

  • STUART says:

    In the last week my BA Avios rewards for 2023 bookings (Jan/Feb/Mar) have just decreased ! Example : As a BA Silver my LHR-SOF in Club was showing 5064 avios reward, is now showing 3798 ! Also have ATH / EDI / 4 x SOF – all reduced in the last week. Would this be the new system kicking in to the BA side ??

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