British Airways has just released details of its move to revenue based Avios earning.
We knew this was coming – it was announced a year ago, with Iberia switching in November 2022. We actually had the world exclusive on this back in March 2018 when Alex Cruz discussed it in an interview with a Hong Kong-based reporter which ended up being published by us.
It hasn’t worked too well for Iberia, with carve outs already put in place to stop passengers defecting to other carriers on some routes. It remains to be seen if similar carve outs will be required here.
Full details can be found on this page of the British Airways website.
British Airways claims in the official press release that:
“This is a simpler and more transparent system”
This is not true, because earning is based on the fare you pay excluding third party taxes and charges – a sum which 99% of passengers don’t know.
In reality, 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.
The only upside for non-status passengers is that you will now earn Avios for money spent on seat selection fees and additional baggage fees.
However, to be fair, British Airways says in the press release that the change is being made as the result of customer feedback. You have only yourself to blame.
When do the Avios earning changes come into effect?
The changes kick in for tickets booked from 18th October.
Any travel booked before 18th October will earn at the existing rates.
What is changing with British Airways Executive Club?
One alleged selling point for the new arrangement is that it is simple. The number of Avios you earn per £ is based on your status in the British Airways Executive Club programme.
A base level Blue member earns 6 Avios per £1, whilst an elite member will earn up to 9 Avios per £1.
Take a look here:
Your elite status bonus has been cut
Part of the problem with the new structure is that it is alienating elite flyers by cutting elite bonuses.
Historically you received the following elite status bonus (based on miles flown):
- Bronze – 25%
- Silver – 50%
- Gold – 100%
These will be cut for tickets booked from 18th October to:
- Bronze – 17%
- Silver – 33%
- Gold – 50%
To be fair, the actual change will vary by cabin flown because the current elite status bonus does not apply to the cabin bonus. On the other hand, on a cheap short haul flight the majority of your earnings as an elite currently come from the cabin bonus.
A system so simple its impossible to know what you earn
As happened with the Iberia changes, British Airways is basing your earnings on the NET cost of your ticket, after taxes and external surcharges have been deducted.
(Iberia initially tried to deduct its own surcharges too but had to row back on that within hours.)
This makes it very difficult to know in advance how many Avios you will earn. Taxes and external surcharges make up a large part of the cost of an inflexible Economy ticket but only a tiny part of a fully flexible Business ticket.
For example, a £39 one way ticket to Manchester has a base fare, adding back the ‘carrier imposed surcharge’, of just £16.50. You earn Avios based on 40% of what you spend.
An £8,072 one way flexible business class ticket to New York has a base fare of £7,795. You earn Avios based on 97% of what you spend.
It gets even more confusing ….
To make things even *ahem* simpler, it appears that some tickets including those booked as part of a BA Holidays package will continue to earn under the current mileage- and cabin-based scheme:
“…. some tickets where the fare paid isn’t disclosed or isn’t available, including flights booked as part of a British Airways Holidays package, will continue collecting Avios based on a percentage of how many miles you fly and the cabin you fly in (no minimum Avios apply).”
Interestingly status bonuses will be cut compared to what you would earn now which is perhaps the clearest indication of what these changes are meant to deliver:
“Executive Club Bronze, Silver and Gold members will collect 15%, 30% or 50% extra Avios on top of the base flight award.”
What can I do if I don’t like these changes?
There is, of course, an easy way to avoid these changes – credit your flight to another airline programme.
The response of Qatar Airways here will be key. If Qatar Privilege Club continues to award Avios based on cabin class and distance, you may earn more Avios by crediting your flight to a Qatar account. It only takes a few seconds to move them back to British Airways Executive Club.
The issue is that you won’t earn British Airways tier points this way. If you don’t care – either because you’ve already retained status or know you’ll never manage it – then opening a Qatar Privilege Club account may be the way to go.
Will we see carve outs of certain routes as Iberia did?
The new ‘earn based on what you spend’ method is great, it seems, except when it isn’t.
Iberia has had to create two carve outs based on routes where it has strong competition:
- routes to Latin America earn from 7 Avios per €1 instead of from 5 Avios per €1
- flights between Madrid and Barcelona earn from 6 Avios per €1 instead of from 5 Avios per €1
Let’s see if there are similar carve-outs on routes where British Airways is under most pressure.
What is wrong with this model of earning Avios?
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.
(Flyers can’t easily understand the Avios they earn, because it is based on the ‘ex taxes and surcharges’ cost of your flight, a number which no-one knows. You can see who the new system is designed to please.)
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.
This earning model also excludes corporate rebates. Most big companies get a rebate from the airline at the end of the year if they hit spend targets. That £10,000 ticket? A chunk is likely to be repaid. This leads to an even bigger over-rewarding of people travelling on corporate tickets.
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 don’t see anyone offering incentives to buy Taylor Swift concert tickets.
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 could get you there. You will earn fewer Avios on competitive routes where you can choose between carriers.
Remember that the changes kick in for flights booked from 18th October.
Remember that you can share your thoughts in the comments below.
How to earn Avios from UK credit cards (September 2023)
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:
There are two official British Airways American Express cards with attractive sign-up bonuses:
You can also get generous sign-up bonuses by applying for American Express cards which earn Membership Rewards points.
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.
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.
EDIT: Applications for this card are temporarily suspended due to IT issues with the British Airways On Business SME loyalty scheme.
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.
Click here to read our detailed summary of all UK credit cards which earn Avios. This includes both personal and small business cards.