April 24, 2024

British Airways Is Changing How You Earn Aviation From Airplanes

British Airways is moving to a system where you earn Avios, the points currency used to fuel the loyalty program, based on how much you spend rather than how far you fly.

Air travel is a highly emotional endeavor and that is true even when things go smoothly. It may not be new, but flying is still ambitious and vital for many reasons.

For a long time, the way people earned British Airways Executive Club miles and rewards while flying was actually based on the distance flown. It came with the emotional element of greater reward for longer journeys, even if it wasn’t entirely logical.

Especially since the advent of the internet, increased airline competition and new sales technology, especially since earnings metrics are constantly being questioned. This is a world where one can fly from London to Australia for £450/$550, but fly from London to Geneva for £600/$784.

British Airways Moves To Spend Based Plane Earnings: Background

The first programs to move to “spending based” earnings were in the United States with programs like Delta and none of them changed course, and many are involved. That list already includes European programs such as Air France/KLM’s ‘Flying Blue’.

Spend-based earnings rather than distance-based earnings create a tighter relationship between spend points and rewards. If you ask any loyalty program leader, you’ll always hear that unlocking more reward seats for members with points is a concern. Better economy around the points helps with that.

It’s fair to say that it’s more transactional and feels less warm and fuzzy than the emotional connection of flying long distances to earn more points, but it’s also fair to say that it rewards better people who fly shorter distances more often, and people may still fly long distances. earn more rewards this way. Let’s jump in.

Fares Fly Under New British Airways Program

Any flights booked from October 18, 2023 who will earn based on spending rather than distance. And yes, any flights booked before that date, even for travel after that date, will earn as they do now.

To be clear, the metrics for earning elite status are currently unchanged and only play into Avios points earned that can be spent on rewards.

From October 18, 2023, British Airways Executive Club members will earn Avios based on the following rates per pound spent, which will also have local currency equivalents elsewhere.

The new Avios earning rates are subject to carrier fees and charges but not government charged fees. Hopefully British Airways will do a good job of showing how many Avios you’ll earn in the sales flow, so you don’t have to do any math.

  • Blue members will receive 6 Kites per £1 spent
  • Bronze members will receive 7 Airplanes per £1 spent
  • Cash members will receive 8 Kites for every £1 spent
  • Gold members will receive 9 Kites per £1 spent

The best way to evaluate loyalty changes is through practical real-world examples. There will always be red herring situations, though factually speaking British Airways will issue more points to members through this new system rather than fewer.

Take a trip to Geneva recently

For the lowest fare, which can still be expensive, London to Geneva currently earns 125 Avios each way. Yes, a round trip would earn a respectable 250 Avios. Even the most expensive economy fares earn just 500 Avios each way, for 1000 round trips.

Even a base ‘Blue’ member paying £100 each way would earn somewhere around the current high Avios total for the economy cabin. Geneva fares often go into the £275 one-way during peak holiday periods, meaning original Avios members would earn significantly more under the new system than before.

The £275 example would fetch around 1500 Avios each way which easily beats the current highs. A Gold member could do very well at 9 Avios per £ spent.

Picture by: Nick Morrish/British Airways

Winners and Losers

Spending based earnings is a much more familiar concept than many people make this out to be. Blogs including this one shout all the time about the benefits of rewards credit cards. It won’t take a genius to figure out that these are spending-based earning tools.

Spend X, get Y Avios.

The IS American Express British Airways Premium Card has offered as many as 70,000 points as a welcome bonus in the UK this year and has defined earning rates. All partner hotels, Uber partnerships and online e-store purchases are also spend-based earnings.

Take the Booking.com promo of 10 flights per £1 spent on hotels through BA and you have an equivalent program with new earnings based on British Airways spend on flights.

For many flight distances there will be some winners and losers in the new program based on spend, but again, British Airways, IAG Loyalty and Avios will issue more points to support this program, meaning more are being rewarded more people, more.

Net Winners

Inflexible travelers with fixed dates who often buy high fares will win with these changes. They will earn more Avios. These are likely to include families on school holiday schedules, business travelers and high-end leisure customers.

In general, basic members will be more rewarded than before for short-haul travel. Elite Bronze, Silver and Gold members will have better spending.

Marginal Wins and Losses

Customers who typically fly longer distances such as London – New York as their main route, will gain some and lose some. New York is one of the “cheaper” routes for longer distances, with fares sometimes dropping to as low as £350 round trip these days, or £1500 in business class.

With high government taxes this way, like other ways in the US, the earnings may actually change. Currently a “Blue” member would earn 1729 Avios each way to New York on most economy fares at the moment.

Looking at an exact fee of £505, only £310 of that fee is government taxes. A blue member would earn 1510 Avios for this flight round trip, which is an unfortunate reduction in earnings.

In business classI recently flew London-New York because Gold ball and earned 17,290 round trip Avios. At a rate of 9 Planes per £1 spent, a business class ticket would earn me £2,300 more Avios, hitting exactly 18,000.

And this is a key distinction: at present, there is no point in spending more. It doesn’t matter if I paid £1500 for a business class ticket and you paid £7,0000 — we are rewarded the same. In the new programif you spend £7,000 on a ticket as a Gold member, you will earn 63,000 Planes on a flight you previously earned 17,290.

Potential Losers

I certainly wouldn’t take the satisfaction of calling the most spreadsheet pedantic among Flyertalk losers, but they are probably targets here. People who fly almost entirely on error fees will earn fewer points than they currently earn on distance-based flights.

Since these types of fees usually cost less than .0001% of customers, it’s not really something to consider for most. Don’t get me wrong, I love generous fare, but I’m not fat enough to think I deserve the highest level for enjoying them.

Spending Based Earnings: Sustainable Economics?

The fuel and crew required between London and Geneva is nowhere near the cost required to fly between London and Sydney, but as previously stated, it could be cheaper to fly to Sydney and you would earn more points at the moment. That immediately puts a strain on the economics of loyalty programs across the business for no logical reason.

US airlines have used spend-based earnings to invest in loyalty benefits better than those available in other markets, mainly because there is better accountability for customer value. Points are issued without question. It’s a bit “show me the money” (barf)but it’s also much easier for finance teams to see the value that loyalty brings in real terms.

There will always be a fair bit missing from the “good old days” of loyalty being an open-ended game without perfect logic, but there is also excitement about programs performing better and delivering on their value promise.

It could be argued that better technology, more valuable perks and the availability of more seats is much more exciting than the previous “game”, however ambitious and treacherous it felt.

However, as you can see, British Airways is moving to spend based earnings starting October 18th, and from that day forward there will be a direct relationship between what you spend with the airline and what you earn, as you already do with credit card rewards, e. -purchases and store partnerships.

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