Forums › Frequent flyer programs › British Airways Executive Club › BAEC changes – “2 yrs in the making” and based on “extensive modelling”?
BAEC changes – “2 yrs in the making” and based on “extensive modelling”?
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Recent telegraph article on the GFL attempt by a customer (see other thread) , mentions this at the bottom of the article which I found hilarious:
“A spokesman for British Airways said: “The new British Airways Club has been nearly two years in the making. The changes we’re making are based on extensive modelling of our customers’ behaviour and a lot of research into how this model works for other airlines around the world, to make sure we’re getting the balance right.
“We’ll continue to monitor this while adapting to changing needs and habits. A large number of our customers will benefit from these changes and we’re confident that this is a better way of truly rewarding their loyalty.””
Really? I’m sure they looked at some options, but hard to believe this whole set of changes was well-thought-out and based on science.
Yes it’s just the usual corporate marketing fluff. “A large number of our customers will benefit from these changes and we’re confident that this is a better way of truly rewarding their loyalty.” A large number could mean anything and could still be a minority of customers.
Rob seemed to mention them potentially rolling this back? As far as I am aware they are only going to dig their heels in further with removing dynamic Avios once the PR storm subsides (which has apparently taken them massively by surprise!). Does feel like there’s been the same couple of articles regurgitated around every major paper in the UK, which can’t be a nice read for their media monitoring agency!
Is mostly not about the bad PR. Bad PR is fleeting, and it’s not like British Airways previously had a stellar reputation that is now sullied.
The much bigger issue is that in many of the comments people have made credible statements that they plan to take their business elsewhere. The blokes over at Waterside are perhaps only now realising how much of their margins were driven by their loyalty program as opposed to “quality” of their product or some other nonsense.
The much bigger issue is that in many of the comments people have made credible statements that they plan to take their business elsewhere. The blokes over at Waterside are perhaps only now realising how much of their margins were driven by their loyalty program as opposed to “quality” of their product or some other nonsense.
Will be interesting to see if this does hit the bottom line and what impact that has?
The much bigger issue is that in many of the comments people have made credible statements that they plan to take their business elsewhere. The blokes over at Waterside are perhaps only now realising how much of their margins were driven by their loyalty program as opposed to “quality” of their product or some other nonsense.
Will be interesting to see if this does hit the bottom line and what impact that has?
got to imagine that some routes are going to be particularly impacted, Sofia springs to mind, lots of club seats will have been acquired by tier point chasers over previous years. Club loads will surely drop on some routes and what impact does that have on viability of those routes?? This is obviously speculation as I don’t have any insight into the actual figures.
But statusless passengers may now buy CE vs ET for the perks. So it’s a more complicated situation
A mate who would know told me today that the BA sale, which just ended, did not go as well as expected.
The ‘extensive modelling’ didn’t go as far as realising that if Iberia came out with a lower spend target AND continued to offer segment based qualification then BA would have a problem ….
@Rob, did you see January’s consumer confidence figures? I suspect that’s the explanation for your mate’s sale conundrum.
A mate who would know told me today that the BA sale, which just ended, did not go as well as expected.
The ‘extensive modelling’ didn’t go as far as realising that if Iberia came out with a lower spend target AND continued to offer segment based qualification then BA would have a problem ….
Well, from a consumer point of view one might argue that the sale didn’t offer any especially spectacular discounts! At least, not on the routes and in the cabins where this consumer was looking. This was no Amazon Prime Day sale with 50% off routes I’d never even realised I needed to take.
Maybe CE to Sofia will be a bargain in the next sale… but will it be as popular as historically?
@Rob, does Iberia have a high degree of autonomy in how it runs its own FF club, or does being part of IAG mean it needs to toe the line, potentially even closely aligned with BA?I thought these companies paid lots of money to consultants to identify such eventualities and also strategies to mitigate them?!
@NorthernLass, remind me why the “extensive modelling” would do anything other than prove that tier-point runners have a negative value to BA if they spend £1K for two years of lounge access on short haul flights.
Some customers are best jettisoned. It was good while it lasted, but it’s donenow. Get over it.
A mate who would know told me today that the BA sale, which just ended, did not go as well as expected.
The ‘extensive modelling’ didn’t go as far as realising that if Iberia came out with a lower spend target AND continued to offer segment based qualification then BA would have a problem ….
In a situation that is likely replicated across the City, in my workplace amongst those who care about points/status (which is not all travelers), any preference for traveling BA over other airlines on shorthaul (largely economy) has evaporated. It’s now all down to schedule, airport and to some extent price–which often will still mean BA, but it will also lead to more careful consideration of other options.
I am planning a few business trips, and am actively thinking if I can work in enough flights to let my BA status stagnate at recently reacquired Bronze and instead boost my *A status (historically my backup to BA – I still have *A Silver) or even SkyTeam status (where I have not had status in ~12 years). Even that Ryanair flight from Stansted doesn’t look so bad, with a shorter airport transfer time, better return flight time, and I can buy an extra legroom seat and FastTrack for less than the price differential to a network carrier.
I thought these companies paid lots of money to consultants to identify such eventualities and also strategies to mitigate them?!
Time to hire some consultants to figure out what the first consultants got wrong.
Time to hire some consultants to figure out what the first consultants got wrong.
You mean replace the KPMG graduates with EY graduates? 🙂
Sorry if I sound cynical but the rationale behind the changes to the BAEC can be summed up in two sentences:
– Short sighted cost cutting
– Keeping the “riff raff” out of the lounges@jj, I think you’ll find that I was “over it” before the vast majority of commentators on here. As a northerner (the clue is in the name), I’m far less tied to BA/LHR than most.
But you’ve either completely misunderstood or just wanted to get some sort (completely misdirected) dig in; I was asking how, if the consultants command such high fees, do they manage to miss fairly obvious consequences of their proposals? Apologies if it wasn’t simple enough!
A mate who would know told me today that the BA sale, which just ended, did not go as well as expected.
The ‘extensive modelling’ didn’t go as far as realising that if Iberia came out with a lower spend target AND continued to offer segment based qualification then BA would have a problem ….
People are skint and BA appear to have gone all in on travel to the US, which is fairly unattractive for a number of reasons.
A mate who would know told me today that the BA sale, which just ended, did not go as well as expected.
The ‘extensive modelling’ didn’t go as far as realising that if Iberia came out with a lower spend target AND continued to offer segment based qualification then BA would have a problem ….
People are skint and BA appear to have gone all in on travel to the US, which is fairly unattractive for a number of reasons.
Indeed and there is one very unattractive reason why I cancelled two US bookings for this year (and there won’t be anymore for 4 years).
One was an avios flight so was prepared to eat the £35 fee and the other was a BA holiday where there had been a flight cancellation so that enabled getting my deposit back (though I’d have been prepared to eat that £ 250 if I had to).
I do have one US trip next month but I’m not prepared to eat the cash loss though if BA did cancel one of the flights in the next 3 weeks I’d be very grateful !
once the PR storm subsides (which has apparently taken them massively by surprise!).
It wouldn’t have been a surprise if they straight up said they want to cut costs and reduce crowding at lounges.
Instead they hid behind marketing fluff like ‘we listened to you’ which is the most annoying part.
Or they could have said ‘we listened to the highest spenders’.But you’ve either completely misunderstood or just wanted to get some sort (completely misdirected) dig in; I was asking how, if the consultants command such high fees, do they manage to miss fairly obvious consequences of their proposals? Apologies if it wasn’t simple enough!
Because they don’t know how exec club works in any great detail. They don’t understand things like soft landings (and their importance to people) or how the scheme generates loyalty (and income) to BA and how people would plan bookings around earning status and points. Basically they don’t understand people.
And they don’t talk to the people who know the scheme in detail and that’s the likes of the exec club phone agents and their direct supervisors. They only talk to management and often they don’t have a clue about the ins and outs.
If an airline without a loyalty scheme was starting one now then earning status via cash spend would be the way forward as it won’t hack off a huge number of your customers because this it would be a new thing,
@Rob – does that mean that Iberia will continue to have segment qualification? Surely any consultant with a brain would realise that a current BAEC member who qualifies for bronze or silver status by this route would change to IBPL? Could IBPL cope with a huge influx of new members, or any other OW programme?
@jj, I think you’ll find that I was “over it” before the vast majority of commentators on here. As a northerner (the clue is in the name), I’m far less tied to BA/LHR than most.
But you’ve either completely misunderstood or just wanted to get some sort (completely misdirected) dig in; I was asking how, if the consultants command such high fees, do they manage to miss fairly obvious consequences of their proposals? Apologies if it wasn’t simple enough!
@NortherLass, apologies if it sounded as if I was having a dig. That wasn’t my intention at all, so maybe I need to be more careful how I word things.
I think that the consultants’ modelling will have fully predicted that a proportion of customers will switch to low cost carriers. But, while some of those customers may fly quite frequently, many will have very little commercial value to BA.
I will never forget the time in 2006 when I ran a model over my then CCO’s largest sales account and discovered that the source of business was loss making over a 2-3 year horizon. To his credit, he played hardball and terminated the relationship when they refused to accept better pricing, losing about 15% of his sales revenue. By 2009, all of our competitors had gone out of business, but we were thriving. As the old saying goes, sales are vanity, but profit is sanity.
@jj, I think you’ll find that I was “over it” before the vast majority of commentators on here. As a northerner (the clue is in the name), I’m far less tied to BA/LHR than most.
But you’ve either completely misunderstood or just wanted to get some sort (completely misdirected) dig in; I was asking how, if the consultants command such high fees, do they manage to miss fairly obvious consequences of their proposals? Apologies if it wasn’t simple enough!
@NortherLass, apologies if it sounded as if I was having a dig. That wasn’t my intention at all, so maybe I need to be more careful how I word things.
I think that the consultants’ modelling will have fully predicted that a proportion of customers will switch to low cost carriers. But, while some of those customers may fly quite frequently, many will have very little commercial value to BA.
I will never forget the time in 2006 when I ran a model over my then CCO’s largest sales account and discovered that the source of business was loss making over a 2-3 year horizon. To his credit, he played hardball and terminated the relationship when they refused to accept better pricing, losing about 15% of his sales revenue. By 2009, all of our competitors had gone out of business, but we were thriving. As the old saying goes, sales are vanity, but profit is sanity.
would love to see the underlying data used re. BAEC changes. The total outlay for someone achieving status ‘on the cheap’ and then additional flights to benefit from lounge access, vs the revenue generated from the flights etc. how much did the average status holder cost BA from each lounge visit? £10-20??
would love to see the underlying data used re. BAEC changes. The total outlay for someone achieving status ‘on the cheap’ and then additional flights to benefit from lounge access, vs the revenue generated from the flights etc. how much did the average status holder cost BA from each lounge visit? £10-20??
Recent article on OMAAT says, “Based on what I’ve heard (and these are ballpark figures), you can generally expect that access to a business class lounge belonging to a major alliance will be billed at somewhere around $50 per person, and a contract or Priority Pass lounge will be billed at somewhere around $30 per person. Meanwhile for first class lounges, the reimbursement rate could even be a bit higher than that.”
So a Silver return trip in Economy costs BA about $100. Plus a lost opportunity to earn baggage fees or seat reservation fees. Plus the cost of upsetting high-yielding customers who face a queue at check-in. Nine times out of ten, the fare will be loss making.
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