Will 2023 be the year of revenue-based collection and dynamic redemption on BA?
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So we suspect revenue based Avios collections are coming to BA this year: https://www.headforpoints.com/2022/11/21/earn-avios-based-on-cost-of-flight/
Now it looks like dynamic Avios pricing may join that “improvement”: https://www.paddleyourownkanoo.com/2023/05/13/british-airways-planning-major-changes-to-website-and-phone-app-to-address-frequent-flyer-complaints/
I guess it could make sense to bring them in together and deal with the backlash in one go?
I get the logic in terms of awarding fewer Avios for cheap flights, requiring more Avios for redemptions, whilst selling more to the Barclays and AmExes of this world. And you can sell it to the average Joe as an improvement as more award seats will become available.
What do we think? Can’t see this community being even remotely excited about it 🙃
I don’t see anything about avios pricing here?
In terms of improving the IT, which the article seems to be about, being able to make changes and cancellations to regional departures would very useful, as would being able to use the BAPP 241 in 2 halves!
Well, what else would you dynamically price? Surely they already dynamically price cash tickets?
You won’t see dynamic pricing per se. What you might see, potentially, is an Etihad Guest type structure whereby if a standard reward seat isn’t available, you are shown an Avios price based on cash cost x 0.5p.
No-one likes this though, and if you go to any industry conference you’ll find people laughting at the Flying Blue guys for doing it, because it demeans the value of the scheme. Better to show no seats than a seat at 1 million Avios even though (as Ben Lipsey who runs Flying Blue will always tell you) once a week or so someone does apparently pay 1m Flying Blue miles for a simple business class return.
You won’t see dynamic pricing per se. What you might see, potentially, is an Etihad Guest type structure whereby if a standard reward seat isn’t available, you are shown an Avios price based on cash cost x 0.5p.
No-one likes this though, and if you go to any industry conference you’ll find people laughting at the Flying Blue guys for doing it, because it demeans the value of the scheme. Better to show no seats than a seat at 1 million Avios even though (as Ben Lipsey who runs Flying Blue will always tell you) once a week or so someone does apparently pay 1m Flying Blue miles for a simple business class return.
Doesn’t AA dynamically price rewards?
You won’t see dynamic pricing per se. What you might see, potentially, is an Etihad Guest type structure whereby if a standard reward seat isn’t available, you are shown an Avios price based on cash cost x 0.5p.
No-one likes this though, and if you go to any industry conference you’ll find people laughting at the Flying Blue guys for doing it, because it demeans the value of the scheme. Better to show no seats than a seat at 1 million Avios even though (as Ben Lipsey who runs Flying Blue will always tell you) once a week or so someone does apparently pay 1m Flying Blue miles for a simple business class return.
Doesn’t AA dynamically price rewards?
For instance, JFK to BOS on AAdvantage on 7/Jun has flights at 7.5k, 8.5k and 12.5k depending on the time and desirability. I assumed this is where BA would wish to head towards.
The world is full of examples where those who were extremely knowledgeable in a specific area laughed at an idea as so obviously bad that it could not happen, yet top management and the bean counters who didn’t really understand that area pushed it through anyway…
For instance, JFK to BOS on AAdvantage on 7/Jun has flights at 7.5k, 8.5k and 12.5k depending on the time and desirability. I assumed this is where BA would wish to head towards.
An unsold flight (or hotel room) is worth £0. This is the argument for flat redemption pricing. If a flight is going to be full, release fewer seats. As long as you’re just releasing the inventory that would otherwise be unsold, you don’t need to mess about with redemption pricing.
An unsold flight (or hotel room) is worth £0. This is the argument for flat redemption pricing. If a flight is going to be full, release fewer seats. As long as you’re just releasing the inventory that would otherwise be unsold, you don’t need to mess about with redemption pricing.
But there is money to be made from this approach, plus balance sheet liabilities can be written off quicker – as your Flying Blue example shows. And IAG loves making money above all else 🙂
IF BA was going to do dynamic redemption’s which I do not think they will it would have been done by now even before any changes to the website. One person does not know all that goes on beyond the scenes at BA. It is in BA and IAG’s interest to make redemption competitive especially on short haul routes with the amount of competition on some routes. What they may do as Rob has said is release the standard number of avios seats and using data on how full the flight is, add more avois seats at a higher rate. Airlines operate to make money and the more seats full whether by avios or not achieves this so it would not be in BA’S interest to move to dynamic redemption. This article refers more to the IT and a intention perhaps to move to dynamic pricing in other areas ie flights if not already . Very few if any airlines do dynamic redemption as they know that it does not work
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