Why don’t BA sell dynamic pricing reward tickets?

[executiveclubber]

Inspired by the recent bait and switch leap in taxes, I’m curious from a business perspective why BA don’t go down American Airlines’ route of offering dynamically priced reward tickets. The current system often leads to fantastic value on last-minute shorthaul redemptions — but why would BA do this?

Sorry if the very thought raises your blood pressure 😄

[BA Flyer IHG Stayer]

Don’t give them ideas though they probably have thought about it already.

The current system has a simplicity and a constancy about it that dynamic pricing doesn’t and that’s an appealing feature.

[memesweeper]

Cost of implementation vs future benefit ?

The benefit is slim if your frequent flyers hate you

Last-minute fixed price Avios seats are still only really “bought” by leisure travellers, leaving sky high cash prices for business passengers and non-loyalists. Seems like a smart business move to me.

[BBbetter]

They already do in a limited way using peak and off peak redemptions.
If it’s full fledged revenue based, people will lose interest and stop buying avios.

[Ihar]

The business is very complex. Load factor is only one element. Plus USA short-haul is very different from UK/EU short-haul.

BA knows what an Avios is worth. What a reward flight is worth for customer loyalty. How you got your Avios. Probably know where and when you’re going to next before you do. And who with 😉

Basically what Amazon do!!!!

[Jon]

I’d be interested to know whether there’s any research/data out there about the business impact switching to revenue-based redemptions has made, for those airlines that have done it, eg on things like top-tier FFP membership retention, loyalty scheme value/profitability/effectiveness, volume and type of redemptions made, etc etc.

Over at Malaysia Airlines for example, my sense is that it has been an absolute disaster, at least from a customer perspective. Eg business class redemptions between KUL and LHR are now regularly in the 300-500k points ballpark – one way! – while earning rates have dropped significantly. And while they do intermittently offer fixed-price “Saver” redemptions, they recently made an unannounced and still-not-communicated massive devaluation to those. Unsurprisingly there’s plenty of dissatisfaction around, and anecdotally they’re haemorrhaging top-tier members. Their strategy, such as it is, appears to be to destroy long-term loyalty and whatever value was left in the FFP and turn it into a “lifestyle programme”. I hope it’s working well for the business (though I suspect it’s not) because it certainly isn’t working for us the customers.

I very much hope BA doesn’t follow suit!