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IAG planning ‘consistent elite tiers’ across BA, Iberia and Aer Lingus – what does this mean?

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Once a year, International Airlines Group – the parent company for British Airways, Aer Lingus, Iberia, LEVEL and Vueling – runs a ‘Capital Markets Day’.

This is aimed at the banks and institutions that hold the debt and bonds issued by the group, but the event has always been shared more widely. It is the single most important piece of information sharing that IAG does all year, with the heads of all of the IAG business units presenting.

To be honest, it probably wishes that it hadn’t bothered. The shares fell by 4% at one point, wiping £300m off the value of the group, as investors failed to be impressed by what they heard.

IAG planning 'consistent elite tiers' across BA, Iberia and Aer Lingus

We will do a separate article this week about the British Airways slides.

What was the Avios news from the Capital Markets Day?

There isn’t a lot in the IAG Loyalty / Avios part which regular readers of HfP won’t already know. You may be intrigued to know that fewer than 40% of Avios are awarded from flying these days.

What is interesting is slide 69 which says that you can expect, at some point:

  • ‘single Avios balance’
  • ‘improved benefits’
  • ‘cross airline recognition’
  • ‘consistent elite tiers’

It isn’t entirely clear what this means, but if we go back 6-7 years there was a plan (foiled by IAG’s IT capabilities) to turn Avios into a Miles & More-style structure.

With Miles & More, there is a single status platform used across Lufthansa, SWISS, Austrian, Brussels etc. You also have a single points balance. All of your status and points activity takes place on miles-and-more.com and not on any of the airline websites.

Moving to a ‘single Avios balance’ would have some benefits. It would save the faff of moving points between BA, Qatar Airways, Finnair, Aer Lingus / Vueling and Iberia for a start. Something which should be simple – such as using your Avios to pay for a Vueling flight on the Vueling website – is currently very messy indeed.

What does ‘consistent elite tiers’ mean?

There are two ways of reading this.

One is that each airline would simply rename its existing tiers so that Aer Lingus and Iberia top tier status is called the same thing as top-tier British Airways status. Everything else, including the different ways of earning status, remains the same.

The more radical approach would be to have a standardised way of earning status across IAG. This would require, for example, each airline to have the same thresholds for Gold, Silver etc and to earn the same number of points per flight. It could also be tied in with a move to earning status based on spending and not flights.

The snag here is that what works for one IAG airline wouldn’t work for another. Aer Lingus has a greater focus on low cost and short haul flights, for example, so any status model which heavily rewarded spending or long haul flying would wipe out their elite base.

The other snag is that, irrespective of what happens across IAG, it cannot force Finnair and Qatar Airways to adopt the same status-earning model. There is little point aligning how you earn status across some Avios-issuing airlines and not others.

Is Aer Lingus going back into oneworld?

‘Cross airline recognition’ is another interesting one. Remember that this presentation was given in the same week that we reported that BA elites would no longer get lounge access in Shannon and Cork when flying Aer Lingus.

‘Cross airline recognition’ would imply that a British Airways Gold member would get the same benefits as an Aer Lingus elite member – including lounge access.

The easiest way of achieving this would be for Aer Lingus to go back into the oneworld alliance, which also solves the issue of BA and Iberia flyers earning status credit when flying on Aer Lingus.

IAG planning 'consistent elite tiers' across BA, Iberia and Aer Lingus

Coming in 2024 ….

The presentation also told us what to expect from IAG Loyalty / Avios in 2024. Look out for:

  • BA allowing you to use ‘part pay with Avios’ to pay for 100% of a flight, as Aer Lingus and Vueling already do, rather than forcing you to pay the taxes and charges element with cash
  • more ‘Avios only’ flights, with the other IAG airlines also trialling it
  • Iberia launching ‘Reward Flight Saver’, which could actually be bad news given how low the taxes and charges on Iberia redemptions are now
  • a ‘new and improved’ hotel and car rental redemption proposition, which will hopefully get you a better deal than 0.5p per Avios

PS. Avios collectors are not rational

What is slightly worrying about the slides is that it shows that many Avios collectors are – how can I put this politely? – not economically rational.

We have written before – and it is confirmed in the slides – that allowing people to use Avios to reduce the cost of a BA Holidays package has been hugely successful. 20% of all bookings are now being part-paid with points. This is despite the fact that this is the worst possible use of Avios (0.44p per point for large volumes), especially compared to using them for a premium cabin flight redemption (1p+ per Avios).

We are also told that 80% of Avios redemptions involve the customer choosing one of the ‘more Avios, less cash’ options. On long haul this makes sense, but on short haul you make a big mistake by choosing the £1 taxes option. The £35 (Economy) or £50 (Business) taxes and charges option is usually the best, often by a large margin, assuming you value an Avios at 1p.

This is why marketing is an art and not a science. If you try to run a business on the boring principles of being better / faster / cheaper than the competition then you won’t necessarily succeed, because people are weird.

PPS. How old do you think Avios collectors are?

Here’s one interesting fact about Avios from the slides. This is the current age split of Avios collectors (and this includes Qatar Airways Privilege Club members, who will skew younger than average due to demographics):

  • 22% are under 34 years old
  • 22% are 34-44 years old
  • 39% are 45-64 years old
  • 17% are over 65 years old

How to earn Avios from UK credit cards

How to earn Avios from UK credit cards (February 2025)

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

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

Barclaycard Avios card

Barclaycard Avios Mastercard

Get 5,000 Avios for signing up and an upgrade voucher at £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

30,000 Avios and the famous annual 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 £15,000 Read our full review

You can also get generous sign-up bonuses by applying for American Express cards which earn Membership Rewards points. These points convert at 1:1 into Avios.

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

50,000 bonus points and great travel benefits – for a large 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, and the standard card is FREE. Capital on Tap cards also have no FX fees.

Capital on Tap Visa

NO annual fee, NO FX fees and points worth 1 Avios per £1 Read our full review

Capital on Tap Pro Visa

10,500 points (=10,500 Avios) plus good benefits Read our full review

There is also a British Airways American Express card for small businesses:

British Airways American Express Accelerating Business

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

50,000 points when you sign-up and an annual £200 Amex Travel credit 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 (112)

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

  • r* says:

    You just know this isnt going to end well. Taxes will no doubt increase on non-ba airlines (or the option to pay the old number of pts will go) and if its a unified platform, what will happen to the partners which can currently only be booked via qatar for example.

  • Charlie says:

    The irrationality of Avios users is what is so good (from IAG’s perspective) about the scheme. Everyone thinks they’re “clever”, whether people getting 0.44p per Avios on BA Holidays, Tier Point runners going to extremes to get status that they will – in reality – hardly ever use (else they would just get the status by actually flying), or highly-paid HfP users spending a lot of time signing up to Red by Dufry to get £2.50 worth of Avios for their efforts.

    I’m sure if HfP users costed their time on the effort of collecting Avios, in many cases it’s totally irrational too.

  • A says:

    Anyone else still is massive negative Iberia plus balance and frightened of the day this might happen? Anyone?

    • Andrew. says:

      Haven’t you distanced yourself from the data to inhibit data matching?

      Changed the email address, amended the mobile number to a disposable one, changed the residential address, maybe even changed your name (if allowed) to your drag name?

    • Yorkieflyer says:

      Nope, I spent them as one should have done in Iberia

    • Alex Sm says:

      Yes… it was supposed to disappear after 3 years of inactivity but alas no…

  • Mark says:

    “The £35 (Economy) or £50 (Business) taxes and charges option is usually the best, often by a large margin, assuming you value an Avios at 1p.”

    Actually, these days the highest cash option is often the best on short haul. That is assuming that you’re not using Barclays upgrade (where £1 is the only option) or Amex 2for1 voucher.

    • Toppcat says:

      Yes – this has been my experience across a number of SH bookings recently too. It seems that something has changed in the algorithm.

    • AJA says:

      I agree. I do the comparison valuing the Avios at 1p and then add the cash component. Surprisingly on a recent CE shorthaul redemption the £1 + maximum Avios was the cheapest option. And even on my longhaul redemption to Singapore the 2nd option to spend more Avios and pay less in cash was better value than the midpoint option that corresponded closest to the old rules.

      • AJA says:

        Which is the opposite experience to you. Seems there’s no longer a standard rule.

  • Ian says:

    I just paid for two Avios tickets in business to Europe for a pound.

    I also used a voucher.

    So 30,000 Avios plus a pound is fine for me for two adults.

    But then I have well over a million and simply will not spend them otherwise.

    Maybe I got poor value, but the companion voucher would probably have expired otherwise next year and the money is better off in my pocket.

    So whilst I agree better value could be had, often spending very little can also be wise.

    • polly says:

      Gosh, if we had over a million still, (we had after covid) would probably do the same now. In fact we did last year to get the kids to Bergerac from LCY. Next year they’re on FR from STN! Plus, l used the £1 option with the Barclays UGV for a December 22nd out and 24th back DUB CE. It is Xmas, and my sisters 60th birthday.

    • Steve says:

      Have to agree with your overall position here, I don’t see how anyone can criticise an individual who is particularly Avios rich, although I suspect the presentation doesn’t allow for this degree of nuance as those utilising Avios in this way.

    • camille55 says:

      Completely agree. Recently got 9 Avios to Europe, using a couple of vouchers that would have otherwise expired, which cost whatever in Avios plus £1 each. We spent the notional saving of would otherwise have been spent (£50-£1) on food and (lots of!) wine. 🙂

      I regard that as subjective ‘better value’ than, say, 2 long haul with crazy YQ.

  • Barry Shooter says:

    It must be better to use Avios whenever you can and save real money rather than hope Avios flights will be available when you want them to be and just end up with loads of unspent Avios.

  • Andrew J says:

    Why does the section about economic rationality cause you worry?

    • Rob says:

      Your life is based on the idea that people are rational and accept economic incentives. The Govt whacks up interest rates because you’re meant to cut your spending and stick money in the bank – but do you?

      If people are not economically rationale then the basis for all economic and monetary theory is wrong.

      • The Original David says:

        See also democracy – the electorate are meant to make a thorough evaluation of the government’s performance across all aspects of life and decide if they’ve done a good job overall. In reality, most of the population would struggle to name 3 members of the cabinet.

      • Andrew. says:

        There’s the new rationale though.

        You buy a new car, as you know with inflation it’s going to cost 10% more next year, but with a triple lock pension your repayments are going to be relatively a quarter less by the third year of the PCP deal.

      • WaynedP says:

        Good, astute question.

        Rob’s response might pass Economics 101 exam question when I was an undergraduate, but fails in our post-Modern world today.

        Brexit referendum outcome clearly demonstrated that rational economic decision-making ranks poorly in a post-modern plebiscite.

        Nowadays populism and personality increasingly trump perspicacity without any (immediate) accountability.

        Fascinating, but too deep and OT for really detailed analysis here.

        • Nick says:

          @Rob so people’s grasp of economics is about as strong as your grasp of how interest rates are set. The BoE is independent, not govt-controlled.

          Sorry, but couldn’t resist 😄

          • Rob says:

            Given that I sat on the board of a big PE fund for years you’ll just have to trust me that I do know how it works 🙂

          • BA Flyer IHG Stayer says:

            It’s only independent via Act of Parliament which can be repealed.

            Government still appoints the Governor and Board and sets the overall policy framework the Bank acts within.

            So still a heavy element of Government control.

        • BBbetter says:

          Brexit was more ‘misguided’ than irrational. People were misled to believe benefits from less EU immigration would outweigh the costs of exiting.

          • WaynedP says:

            Wilfully and willingly misguided, judging by the frequency and volume of the “Project Fear” propaganda that was employed each time a valid economic argument against Brexit was raised.

            That’s textbook irrational behaviour in my books.

      • Panda Mick says:

        Don’t quite know how to put this to you @Rob, but “the basis for all economic and monetary theory is wrong.”

        It’s been wrong for decades

        An example: A bunch of people in an office somewhere (Vienna, maybe) decide that the cost of oil should go up triggers….

        Inflation, because the “perceived” cost of goods will go up as a consequence (even though the underlying cost of getting the oil out of the ground to the consumer hasn’t actually changed), which leads to

        Interest rates rise, because of the stupid belief that it’s people buying essentials that needs to be curbed (this is imbecilic at best), which leads to

        Recession.

        All of the above is traditional theory, correct?

        Instead, could we have not reduced the amount of tax on fuel to have kept inflation down to sensible levels, and raised tax on non-essentials like luxury goods, which fall outside of the scope of how inflation is measured?

        • Rob says:

          We’ve just tried ‘taxing luxury goods’ by removing VAT reclaim for tourists. That went well didn’t it ….

          • AJA says:

            To be fair that strategy wasn’t aimed at the UK taxpayer while raising interest rates is.

            And it failed because tourists realised that the cost of buying stuff in the UK was just too expensive without the VAT reclaim. All that allowing tourists to reclaim the VAT does is just about make it worthwhile.

          • Panda Mick says:

            You could argue that, with the Xenophobic Govt that we have, it was an easy win, and wouldn’t touch the wealth of the typical tory voter

        • Will says:

          Wasn’t part of OFGEMS recent price cap announcement a statistic that the average uk household is using less energy and as such they are going to be reducing the amount of energy which constitutes their average bill next year?

          That would suggest that increasing price does reduce consumption, even if not linearly.

          • Andrew says:

            It’s not necessarilly down to price. Electricity usage is going down partly due to increased efficiencies. Light bulbs used to use 100W, now they use 5W. Fridges, hoovers, washing machines, TVs and pretty much everything is vastly more efficient than it was 10 or 20 years ago.

          • His Holyness says:

            I agree Panda Mick, with 672k net migration, it doesn’t get more xenophobic than that.

      • The Savage Squirrel says:

        “The Govt whacks up interest rates because you’re meant to cut your spending and stick money in the bank”

        Well not really; you’re looking at it through the lens of your own position. The vast majority of the impact is on people in a different financial situation to yourself – for them, interest rates go up so their mortgage goes up so they simply have less money than they would have had otherwise to use in other ways, no matter what they do – so behavioural choice doesn’t really come into it at that point.
        The major problem with that effect is the huge delay in changes in policy having any effect as the vast majority of mortgage lenders are on fixed deals. Maybe there should be a tax charge on fixed deals to encourage people towards trackers and so increase the BoE’s ability to implement economic policy; are tracker mortgages more beneficial than fixed-rate to the country in terms of overall economic policy? Who knows. Well there’s a tangent to points/miles for a Tuesday 😀

        • Andrew J says:

          A similar question over rational behaviour could be applied to the lengths people will go to in order to be a few quid up on a deal, which don’t always justify the time spent doing so. There’s a lot of that discussed on this website.

      • Luke says:

        I’m pretty sure that we could critique the rationality of most of your consumer purchases. (And Economics as a discipline increasingly recognises that “rationality” needs to be taken very broadly).

      • RV says:

        There’s a big issue about information asymmetry when it comes to loyalty/rewards though.

        Saying most people are not “rational” carries a big assumption that the wider public has the same level of knowledge about the value of avios that the average HfP reader has (or actually cares about it), and can make informed/rational decisions.

        Personal preference also comes into play here, and becomes evident on package holidays. I actually take pleasure in organising holidays, and try to save on tickets so I can spend on better hotels/experiences. That also turns out to be a much cheaper way to plan a holiday vs package holidays (most of the times). However I completely understand that this is not everyone’s cup of tea and some people would rather pay the premium (even in the form of avios) to get a package holiday booked for them.

        So yeah, discussing rational decisions with high levels of information asymmetry amongst users is quite complicated in my view.

  • Tom says:

    ‘Show us the ****ing money’. Have IAG become a bit more professional since that slide appeared?

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