Oh boy. British Airways has just announced some major changes to the Executive Club, which have implications both for earning and redeeming Avios.
These changes kick in for bookings made as of April 28, 2015. In other words, if you book before then you’ll still earn miles at the “old” accrual rates. And of course award tickets will be honored at the old rates as well.
British Airways describes these changes as follows:
From 28 April 2015, you’ll notice a difference to the way you earn and spend Avios with us. We’re making these changes to be able to offer more reward seats to you, and to ensure that the Executive Club continues to evolve and deliver a competitive and rewarding loyalty programme in the future.
Okay, so they’re not even pretending these changes are positive, which I appreciate, but rather are admitting this is what they need in order to stay competitive (presumably on the cost side, and not on the benefits side). 😉
So what are the changes?
Changes to earning British Airways Avios
There are lots of changes on the earnings side.
Fewer Avios for cheap fares, more Avios for expensive fares
While British Airways isn’t switching to a revenue based frequent flyer program, they are increasing the disparity in earnings rates based on fare classes. In other words, they want to reward you for booking expensive tickets, and reward you a lot less for booking cheap tickets.
Here’s the new chart for accruing Avios on British Airways flights:
As you can see, on the “premium” end, the earnings rates increase from 200% to 300%, while for discounted tickets they decrease from 100% to 25%.
I can certainly understand the move, and it does put them more in line with Air France/KLM FlyingBlue and Lufthansa Miles & More. But given the amount of low cost competition within Europe, it certainly decreases the value of being loyal to one of the network carriers for intra-Europe flying.
Minimum Avios per segment changing
This sort of goes hand-in-hand with the above, but basically the minimum number of Avios you earn per segment is changing as well. The “spread” is increasing, whereby on flexible first class tickets you go from earning 1,000 Avios minimum to a 1,500 Avios minimum, while for a discounted economy ticket you go from earning a 500 Avios minimum to a 125 Avios minimum.
Elite bonuses being cut
British Airways Gold, Silver, and Bronze members receive an elite bonus on all miles earned through flying. While the bonuses stay the same for Gold and Bronze members, the Silver bonus is being slashed in half. Executive Club Silver members will only receive a 50% elite bonus.
Club World London City earnings rates being cut
British Airways has a special Airbus A318 all business class service between London City and New York JFK. They’ve tried to make the product “special,” and one way they’ve done that is by awarding Avios for the flight as if it’s first class.
Under the new program, you’ll earn the same number of Avios for this flight as you would for any of their other London to New York flights in business class:
London City to New York JFK service
Members flying on our business class only service from London City to New York JFK will collect Avios and Tier Points at the business class rate instead of the first class rate as currently applies, which will bring our London City services into line with Heathrow and Gatwick. Combined with the changes to Avios rates described above, this will still result in a net increase to the amount of Avios you can collect on this service.
Changes to redeeming British Airways Avios
Given how many people collect BA Avios through means other than flying (like through credit cards and points transfers), this section is probably the most interesting to a majority of you.
New British Airways Avios award chart
British Airways is introducing a new award chart. Much like the old chart it’s distance based, though it has both peak and off-peak pricing.
As a point of reference, here’s the old award chart (prices shown are one-way):
Meanwhile here’s the new award chart, which has both peak and off-peak pricing:
British Airways Avios peak award calendar
In fairness, British Airways is being quite reasonable with their “peak” calendar. About eight months of the year are off peak, while four months of the year are considered “peak” season. Here’s the chart:
All partner awards will price at peak levels
This is possibly the most ridiculous part of these changes. Instead of pricing all partner awards at the off-peak level, they’re pricing them at the peak level year round. That’s ridiculous.
They’re not at all transparent about this as they don’t mention it in the changes, but rather only in the FAQs:
Are oneworld and other partner airlines also introducing peak and off-peak travel periods?
No. If you would like to redeem Avios to fly with British Airways airline partners you will need to use peak Avios pricing all year round. There will be no off-peak pricing available for reward flights with our airline partners.
The good news is that the cost of peak redemptions for short-haul awards are the same as the old award chart. So if you want to redeem Avios for travel on Alaska, American, or US Airways, you’ll continue to pay:
- 4,500 Avios for a one-way economy flight of 1-650 miles
- 7,500 Avios for a one-way economy flight of 651-1,151 miles
- 10,000 Avios for a one-way economy flight of 1,152-2,000 miles
However, the cost of first class is skyrocketing. So if you want to book first class within the US on Alaska, American, or US Airways, you’re going from paying 3x the number of miles required for economy to 4x the number of miles required for economy. That’s ridiculous.
Cost of awards on BA metal
These changes are bad almost across the board. Let me give a couple of examples:
US East Coast to London:
- Current award chart: 80,000 Avios roundtrip in business class and 120,000 Avios roundtrip in first class
- New award chart off-peak: 100,000 Avios roundtrip in business class and 136,000 Avios roundtrip in first class
- New award chart peak: 120,000 Avios roundtrip in business class and 160,000 Avios roundtrip in first class
US West Coast to London:
- Current award chart: 100,000 Avios roundtrip in business class and 150,000 Avios roundtrip in first class
- New award chart off-peak: 125,000 Avios roundtrip in business class and 170,000 Avios roundtrip in first class
- New award chart peak: 150,000 Avios roundtrip in business class and 200,000 Avios roundtrip in first class
So premium cabin redemptions are going up in price almost across the board, regardless of whether you’re booking peak or off-peak. The cost of economy redemptions aren’t impacted as much, though that has never been a good use of Avios for longhaul travel, given their hefty fuel surcharges.
No more free transfers within the UK
British Airways’ award chart is strictly distance based, and they typically charge you on a per segment basis.
However, they’ve long allowed a free transfer within the UK, so that you’re not penalized for originating in London. In other words, an Avios award for Manchester to London to Frankfurt would cost you as much as an award from London to Frankfurt.
British Airways will be eliminating this for short-haul flights, though will be keeping it for longhaul flights. Here’s how it’s described:
To bring the UK in line with the rest of the world, you will now be charged for any UK domestic connecting flights to and from the rest of Europe.
For example, when booking a reward flight from Manchester to Paris – which requires a connection in London – you are currently charged only for the London to Paris flights. From 28 April, you will be charged for the full journey, including the Manchester to London flights.
This calculates as follows (based on peak period pricing):
- current price – 9,000 Avios plus £35 Reward Flight Saver fee or taxes, fees and carrier charges
- new price – 18,000 Avios plus £70 Reward Flight Saver fee or taxes, fees and carrier charges
This change does not apply to UK Domestic connecting flights onto long haul flights, which will remain free of charge. For example, if you are flying to Manchester from Miami via London the Manchester to London flight is included in the reward price (50,000 Avios plus taxes, fees and carrier charges), which is the same as today.
British Airways is guaranteeing award space
Not all that interesting in practice, necessarily, but this is pretty cool:
We guarantee that more than 9 million reward seats will be available on our flights this year, with a minimum of two Club World/Club Europe and four World Traveller/Euro Traveller reward seats on all British Airways operated flights that are offered for sale on ba.com (excluding subsidiaries and franchises).
These minimum guaranteed reward seats will be made available 355 days before the flight and will remain available, if not booked, until 45 days before departure.
So when British Airways opens their schedule they’re promising that they’ll make at least two business class and four economy class award seats available per flight. I like that kind of “guarantee.”
Will BA make peak awards available to partners?
So here’s an interesting implication of the above. British Airways will now have peak dates and off-peak dates. My guess is that they’ll only make award space on off-peak dates available to partner airlines. In other words, chances are that you’ll only be able to redeem AAdvantage miles for travel on British Airways eight months of the year. That’s not necessarily a big deal for longhaul flights, but sucks for intra-Europe travel, since you can’t even pick up a connecting flight on British Airways as part of an AAdvantage award.
At least that’s my assumption, though I hope I’m wrong.
Bottom line on Executive Club changes
This change is pretty in line with what I expect from airlines in 2015:
- British Airways is being less rewarding to those on lower fares
- British Airways is being more rewarding to those on expensive fares
From their perspective, short of an outright revenue based program, this is the next best way they can encourage “profitable” behavior.
The award chart changes for travel on British Airway are unfortunate, though hardly unexpected or unreasonable compared to what partners charge.
And I think many of us were scared they would gut short-haul redemptions, given what an outrageously good value they are for travel within the US. But those values are mostly staying the same, so redeeming Avios for domestic US travel will continue to be a good deal.
However, for premium cabin partner redemptions this is a huge devaluation, unfortunately.
To sum it up, I think these changes are bad/horrible news for BA loyalists and casual points collectors, and overall bad news even for high revenue flyers (since the additional miles you earn for flying premium cabins will at best cover the increase in redemption costs).
How do you feel about the Executive Club program changes?
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