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British Airways moves to ‘earn Avios based on your spend’ – are you a winner or a loser?

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British Airways has just released details of its move to revenue based Avios earning.

We knew this was coming – it was announced a year ago, with Iberia switching in November 2022. We actually had the world exclusive on this back in March 2018 when Alex Cruz discussed it in an interview with a Hong Kong-based reporter which ended up being published by us.

It hasn’t worked too well for Iberia, with carve outs already put in place to stop passengers defecting to other carriers on some routes. It remains to be seen if similar carve outs will be required here.

Full details can be found on this page of the British Airways website.

British Airways claims in the official press release that:

“This is a simpler and more transparent system”

This is not true, because earning is based on the fare you pay excluding third party taxes and charges – a sum which 99% of passengers don’t know.

In reality, it represents a sharp cut in Avios earned for most people, except for those on fully flexible tickets which are generally paid for by their employer.

The only upside for non-status passengers is that you will now earn Avios for money spent on seat selection fees and additional baggage fees.

However, to be fair, British Airways says in the press release that the change is being made as the result of customer feedback. You have only yourself to blame.

When do the Avios earning changes come into effect?

The changes kick in for tickets booked from 18th October.

Any travel booked before 18th October will earn at the existing rates.

What is changing with British Airways Executive Club?

One alleged selling point for the new arrangement is that it is simple. The number of Avios you earn per £ is based on your status in the British Airways Executive Club programme.

A base level Blue member earns 6 Avios per £1, whilst an elite member will earn up to 9 Avios per £1.

Take a look here:

Your elite status bonus has been cut

Part of the problem with the new structure is that it is alienating elite flyers by cutting elite bonuses.

Historically you received the following elite status bonus (based on miles flown):

  • Bronze – 25%
  • Silver – 50%
  • Gold – 100%

These will be cut for tickets booked from 18th October to:

  • Bronze – 17%
  • Silver – 33%
  • Gold – 50%

To be fair, the actual change will vary by cabin flown because the current elite status bonus does not apply to the cabin bonus. On the other hand, on a cheap short haul flight the majority of your earnings as an elite currently come from the cabin bonus.

A system so simple its impossible to know what you earn

As happened with the Iberia changes, British Airways is basing your earnings on the NET cost of your ticket, after taxes and external surcharges have been deducted.

(Iberia initially tried to deduct its own surcharges too but had to row back on that within hours.)

This makes it very difficult to know in advance how many Avios you will earn. Taxes and external surcharges make up a large part of the cost of an inflexible Economy ticket but only a tiny part of a fully flexible Business ticket.

For example, a £39 one way ticket to Manchester has a base fare, adding back the ‘carrier imposed surcharge’, of just £16.50. You earn Avios based on 40% of what you spend.

An £8,072 one way flexible business class ticket to New York has a base fare of £7,795. You earn Avios based on 97% of what you spend.

It gets even more confusing ….

To make things even *ahem* simpler, it appears that some tickets including those booked as part of a BA Holidays package will continue to earn under the current mileage- and cabin-based scheme:

“…. some tickets where the fare paid isn’t disclosed or isn’t available, including flights booked as part of a British Airways Holidays package, will continue collecting Avios based on a percentage of how many miles you fly and the cabin you fly in (no minimum Avios apply).”

Interestingly status bonuses will be cut compared to what you would earn now which is perhaps the clearest indication of what these changes are meant to deliver:

“Executive Club Bronze, Silver and Gold members will collect 15%, 30% or 50% extra Avios on top of the base flight award.”

British Airways to change how you earn Avios

What can I do if I don’t like these changes?

There is, of course, an easy way to avoid these changes – credit your flight to another airline programme.

The response of Qatar Airways here will be key. If Qatar Airways Privilege Club continues to award Avios based on cabin class and distance, you may earn more Avios by crediting your flight to a Qatar account. It only takes a few seconds to move them back to British Airways Executive Club.

The issue is that you won’t earn British Airways tier points this way. If you don’t care – either because you’ve already retained status or know you’ll never manage it – then opening a Qatar Airways Privilege Club account may be the way to go.

Will we see carve outs of certain routes as Iberia did?

The new ‘earn based on what you spend’ method is great, it seems, except when it isn’t.

Iberia has had to create two carve outs based on routes where it has strong competition:

  • routes to Latin America earn from 7 Avios per €1 instead of from 5 Avios per €1
  • flights between Madrid and Barcelona earn from 6 Avios per €1 instead of from 5 Avios per €1

Let’s see if there are similar carve-outs on routes where British Airways is under most pressure.

What is wrong with this model of earning Avios?

This model of earning Avios has been used by other airlines and is generally agreed to be a dud. The only exceptions are Finance Directors, who can easily understand how the cost of miles is linked to the money coming in and so like the idea.

(Flyers can’t easily understand the Avios they earn, because it is based on the ‘ex taxes and surcharges’ cost of your flight, a number which no-one knows. You can see who the new system is designed to please.)

Those who think more carefully about these things usually don’t agree. This is because you are rewarding the wrong people most highly.

The people who are flying on £10,000 fully flexible business class fares to New York are the ones who are laughing all the way to the mileage bank. However, with few exceptions, these are corporate travellers whose choice of airline is made by their employer. You could give these people zero miles and it wouldn’t impact the money that their employer spends with the airline.

This earning model also excludes corporate rebates. Most big companies get a rebate from the airline at the end of the year if they hit spend targets. That £10,000 ticket? A chunk is likely to be repaid. This leads to an even bigger over-rewarding of people travelling on corporate tickets.

Similarly, it is (duh) the fullest flights which charge the highest prices. Because these flights are ALREADY full, it makes no sense to spend most of your loyalty budget rewarding the people who fly on them. Those seats would sell anyway, multiple times over. I don’t see anyone offering incentives to buy Taylor Swift concert tickets.

On similar logic, fares are higher on routes where there is no competition – but on routes where there IS competition, and where fares are lower, the lure of Avios is more important. Weirdly, you will now be rewarded more for flying expensive routes where only British Airways could get you there. You will earn fewer Avios on competitive routes where you can choose between carriers.

You can find out more about the British Airways Executive Club changes on its website here.

Remember that the changes kick in for flights booked from 18th October.

Remember that you can share your thoughts in the comments below.

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Category

British Airways and Avios

Comments (432)

This article is closed to new comments. Feel free to ask your question in the HfP forums.

  • Paul Moulange says:
    19 Jul19 July 08:53

    I re-worked two of my current bookings (breaking down fare, BA charges and other non-airline charges) and would have lost between a half and two-thirds of my Avios. Glad they were booked on the old system!

  • Andrew. says:
    19 Jul19 July 09:21

    When you get points in a Supermarket, there’s none of the nonsense about them being allocated on pre-VAT pricing.

    How can BA (and the other airlines) get away with only allocating points on a relatively small proportion of the fare that isn’t immediately clear to the consumer? Yes you can click through and get the breakdown, but at the very least, it’s not in the spirit of consumer legislation.

    Maybe BA will upgrade their IT and tell people exactly how many Avios they will earn at each price point. (sniggers).

    • His Holyness says:
      19 Jul19 July 12:26

      That’s a good point, especially if you consider alcohol due to the massive duty in the price.

    • RussellH says:
      19 Jul19 July 13:40

      While supermarket + credit card points ARE awarded on the basis of VAT inclusive pricing, hotel points have always been awarded on the VAT-exclusive price.

      And when it comes to supermarkets, the majority of most people’s purchases are zero-rated for VAT anyway (in the UK).

    • BA Flyer IHG Stayer says:
      19 Jul19 July 14:12

      It’s their scheme and they can set the rules for it!

      Not a question of “getting away with it”

      At lease they are including their surcharges in the calculation. Otherwise there would be an awful lot more £1 base fares and massively increased surcharges,

      • Rhys says:
        19 Jul19 July 14:15

        Say what you want about revenue-based earning, this implementation is not ‘clear and transparent’ as BA claim it is.

        Andrew is right – if you want to make it easy to understand, then Avios should be awarded on the final paid amount. That might necessitate different rates of earning but it is easy to understand.

  • Colin says:
    19 Jul19 July 09:22

    I wonder if the value of your BA base fare (Avios earning part) will drop and other charges become an even greater part of your ticket. Of course it will.

    • Rhys says:
      19 Jul19 July 09:28

      To be fair, BA is including its fare AND carrier-imposed surcharges as Avios eligible. I don’t think BA can voluntarily tax itself more or ask airports to charge it more…

      • dougzz99 says:
        19 Jul19 July 11:44

        I think you’re just seeing the industry in the light they’d like, with the ‘to be fair’. When I buy a lettuce in Sainsbury’s they award Nectar on the price of the lettuce. They don’t knock 1p off for their lease costs on the property, and another 1p for their commercial taxes, they award on the full price. Airlines have constructed this convoluted mess that leads to the price you pay, there’s real taxes like APD, but everything else is the cost of doing business, breaking things out seems very much an airline game, albeit hotels and several other things are now treading the same path to varying degrees.

  • Ken says:
    19 Jul19 July 09:31

    In the domestic example BA earns £16.50 and gives 40% back to a gold member.
    They also give them lounge access.

    How do you run a viable business on those numbers ?

    • James C says:
      19 Jul19 July 09:41

      Agree. But they’ll be coming for your lounge access next…

      • Jack says:
        19 Jul19 July 11:28

        No they won’t be people need to stop saying this avios is completely different to status

      • Dubious says:
        19 Jul19 July 11:37

        The slippery slope has just got a bit steeper!

      • BA Flyer IHG Stayer says:
        19 Jul19 July 14:32

        For ages people on here and BA FT board have suggested that silver and golds shouldn’t get lounge access when flying economy to make the lounges less busy, Some have even suggested that BA opens a lounge specifically for those people!

        BA has done nothing to change that because they know it really would cause outrage and people really would never fly BA again – as opposed to those that say that but still get on BA planes!

    • Odd says:
      19 Jul19 July 09:46

      Pretty sure you don’t earn 660 avios (40% of 16.50 at 1 cent per avios value) on the domestic example..

    • Ryan says:
      19 Jul19 July 10:22

      It said you earn avoid on 40% of spend, not giving back 40%…

      • ken says:
        19 Jul19 July 10:57

        OK, If we assume an avios value of 1p, they are giving back 625 Avios to a Gold member on the cheapest fare bucket, so £6.25 which is 38.8% of revenue.
        You aren’t getting ancilliary revenue (seat selection, luggage).

        Doesn’t take the much maligned Finance Director to question whether this customer is making a marginal loss.

    • Richie says:
      19 Jul19 July 10:32

      There’s buckets of revenue that’s been received from the Gold achieving 1500 TPs recently.

      • ken says:
        19 Jul19 July 11:37

        Might have earned Gold primarily by flying other carriers.
        Might be lifetime Gold, retired and happy to fly short haul in economy. I know plenty like that.
        Might have achieved Gold through business in which they had no or little choice.

        • Richie says:
          19 Jul19 July 13:14

          They could always play around with the eligible flights criteria.

    • baec_newbie says:
      19 Jul19 July 15:00

      Because in all likelihood, BA will have received several thousand pounds in revenue for the passenger to become a Gold member.

      There won’t be many Gold members who constantly take cheap flights like these, so if the cost of buying that person’s loyalty is losing a bit of profit on occasion, you’d have thought it worth it.

      Evidently IAG don’t agree with that logic.

      • Ken says:
        19 Jul19 July 16:07

        For long haul, I’d agree.

        But let’s be honest Club Europe is a bit of a joke. Unless row 1 or exit seats you don’t get any extra legroom.
        Empty seat next to you ? Sure it’s better but it’s not worth much on a 90 minute flight.

      • Niall says:
        19 Jul19 July 18:14

        I was just going to type the same thing as baec_newbie!

        I could get a £16.50 flight and earn my £6.25 of avios (if this is the cost to them). I could go to the lounge and down a bottle of champagne and eat a load of food. I could select the nicest seats that would otherwise be paid for.

        But… my average spend on flights is higher than this minimum/worst case for BA, I spent thousands getting to gold, as a very regular traveller I don’t spent much time at once in the lounge, BA will have a great deal on champagne for the marketing benefits and I probably wouldn’t have a bottle, it doesn’t cost BA 1p an avios, I wouldn’t pay for seat selection if not free and i think most agree those fees are silly, so they aren’t losing that money.

        Your FD Ken is questioning if they will always make profit on every flight for a frequent flyer (and thinks they should)?

        I spend on BA to achieve status. If exec club didn’t exist then the additional cost would mean I wouldn’t chose them quite a lot of the time.

        I know this isn’t the end of exec club and loyalty benefits, but this is a change which hits their frequent flyers worse than irregular ones. Look at the multipliers, 1 extra avios per £ for golds vs silver. Compare this to 100% of base miles vs 50% now. Take this too far and you will have no loyalty.

        Having said this, you never know… maybe BA are right. Maybe most golds don’t consider this bonus avios perk at all. Maybe it won’t change much! Maybe their just giving away loyalty benefits in general to people who would fly with them anyway because they have a monopoly on routes or people just love than faultless BA service 😉 in which case you should question where this heading and if loyalty benefits will remain.

  • Gillian Wilson says:
    19 Jul19 July 09:55

    How will this apply to Qatar flights booked for November? I have assigned our BA accounts to these to get the tier points so will we get the current rates?

    • Rob says:
      19 Jul19 July 10:47

      No change at all, this is BA only.

      • G says:
        19 Jul19 July 12:07

        What about marketed by BA, i.e 125 stock?

        • Alex says:
          19 Jul19 July 14:09

          To be very pedantic, but “marketed by BA” and “BA stock” are not the same thing. There are three different concepts: operating carrier, marketing carrier and ticketing carrier.
          A flight marketed by BA is any flight whose number contains “BA”, e.g. “BA 061”. A ticket for this flight may be issued by another carrier, thus the ticket number won’t start with 125.

        • BA Flyer IHG Stayer says:
          19 Jul19 July 14:14

          If it’s on 125 stock then it’s a BA booking so their rules apply,

        • James C says:
          19 Jul19 July 14:21

          But if you’ve bought your ticket and it’s ticketed before October 18th even if travel is after that date then the old regime applies.

  • LittleNick says:
    19 Jul19 July 09:59

    Ok just analysed my two club europe return flights with BA this year with the avios earned against what I would have earned under new model.
    First CE return trip was as a lowly blue. LON-BHD Return in Club gained 1500 avios. However based on fare less the Gov/Airport charged amounted to £128.50, then x 6 would have been 771 avios for the entire trip. So just over 50% of the avios I earned.
    Second Trip: LHR-BUD & SOF-LHR (Outbound as Blue, Return as Bronze but presumably it would be status at time of booking for the entire trip so multiplier would have been 6x not 7x for earnings by revenue). Avios earned for trip 3601
    Avios earned by revenue: Fare less Taxes/3rd party charges (incl. Lounge VAT) amounts to 278, x 6 = 1668. This is less than 50% currently earned! Very annoying indeed! Cheap CE flights which I purchase the most of I’m clearly worse off.
    To me feels like penny pinching by BA/IAG

    • JDB says:
      19 Jul19 July 10:11

      @LittleNick – the Avios you earn and benefits (save seat selection) are based on the date of travel, not date of booking.

      The example you give of cheap CE flights to BUD/SOF illustrate why the change is being made. Those flights are, in reality, currently being over rewarded. I shall be sorry to those excess Avios go, but I can see the commercial rationale.

      • LittleNick says:
        19 Jul19 July 10:30

        Ok So I may have gained a few more Avios for the SOF-LHR leg but that was cheaper than the LHR-BUD leg. I can’t remember exactly what the split of the fare was between LHR-BUD/SOF-LHR as the ticket doesn’t detail this, not sure there’s a way to find out?
        But a very marginal increase for being bronze. It is clear price-sensitive leisure travellers are being penalised which has returned to pre-covid demand (so penalising those that I would argue are pretty important to BA right now, good way to reward a large chunk of customers!) and business travel has not returned to Pre-covid demand levels and it might be some while before it does. Is this their way to incentivise them? Personally being 2662 avios less is not an insignificant amount for me. Ok maybe a bit less because I could not factor in bronze for the SOF-LHR leg on earnings.

        • Dubious says:
          19 Jul19 July 12:11

          “the ticket doesn’t detail this, not sure there’s a way to find out?”

          You probably need the ‘e-ticket receipt’. You might need to request or download it.

          • LittleNick says:
            19 Jul19 July 14:42

            @Dubious Yes I was referring to the e-ticket email, but it does not break it down by each leg just the fare for the entire trip so I could not calculate the avios earned as a bronze on the return leg.

        • BA Flyer IHG Stayer says:
          19 Jul19 July 14:17

          When booking there are “fare breakdown” options in both the app and website. Clock on those and the details appear.

          After October people should start looking (and recording) the figures listed there to be able to calculate the avios earnings (unless BA IT is changed to show it when logged in)

  • VinZ says:
    19 Jul19 July 10:12

    The only upside to this, I seem to understand, is that when you upgrade a reward flight at the airport for example, you would get avios, right? Because that’s money spent on the ticket? Is that correct?

    • LittleNick says:
      19 Jul19 July 10:31

      I don’t think so as underlying is a reward

      • VinZ says:
        19 Jul19 July 10:38

        Oh really? Well, then it’s definitely a change for the worst!

        • Dubious says:
          19 Jul19 July 11:33

          Do you get TPs in that situation today?

          • James C says:
            19 Jul19 July 14:30

            No. Not on an Avios booking- tbh I didn’t think you could upgrade Avios bookings with cash at all. You do earn TP and Avios in the higher cabin on a revenue fare which you AUP provided it’s BA metal (you don’t pay on other OW inc AA).

    • Rob says:
      19 Jul19 July 10:47

      Remains to be seen – I suspect not because it’s not reissued as a revenue ticket.

    • Scandinavian Traveler says:
      19 Jul19 July 18:39

      You will (at least if that counts as a “promotional upgrade”). This is what it says on the website:

      “If I’ve booked a reward ticket, can I still collect Avios on pre-purchased seats, bags and promotional upgrades?

      Yes, any qualifying add-ons purchased on a reward booking from 18 October 2023 will collect Avios based on the total eligible spend.”

  • Neverturnright says:
    19 Jul19 July 10:35

    Although this appears as unnecessarily rewarding higher spenders whose companies are footing the bill, they’ve probably calculated that a lot of those people never actually manage to use all of their avios whereas I’d imagine the broader population has a higher % utilisation via more time for leisure travel. I am moderately avios rich (low 7 figures) and probably “benefit” from this change but many of my 241s ultimately go expired and I never manage to use all of them especially since kids and more work travel due to seniority

    • James C says:
      19 Jul19 July 15:00

      Think you might over estimate the understanding of Avios amongst most travellers otherwise people wouldn’t be using pay with Avios on Speedbird Cafe, £1 Reward Saver Pricing or buying wine with Avios through Wine Flyer. Lots of people with small balances from occasional flying (even more with these changes) that BA will happily help them unload at derisory rates. And then they’ll also be people with no intention of ever stepping for on a plane accruing Avios to convert into Nectar points.

      You’ll get through your stockpile when the kids are a bit older and you start doing long haul leisure with them I’d have thought.

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