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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.

  • Anon says:
    18 Jul18 July 12:04

    Does it now start to make sense to shift primary frequent flyer accounts to another One World airline (e.g. Qatar or American) even if based in the UK? Switching the 4 minimum BA flights required for status to another airline now looks more attractive given higher Avios earnings. You will already get better hard products, and there is currently low attractiveness for UK passengers to go to destinations where BA has advantages in scheduling (particularly the US being too expensive for most now).

    • JDB says:
      18 Jul18 July 12:08

      American already awards miles based on the cash fare (as do Delta and United). This system is also used by AF/KLM so don’t see this greatly affects the competitive landscape, nor indeed is it quite as dramatic or as negative as portrayed by some.

    • Rui N. says:
      18 Jul18 July 12:15

      Just get a credit card like normal people and get most of your miles that way.

    • Rob says:
      18 Jul18 July 12:18

      That’s nothing to do with this really. Arguably elite status is more important than Avios, and its easier to earn elite status via BAEC for most people.

      American Airlines miles may seem attractive but wait until you see what they cost for UK to EU redemptions or when you try to find a 241 voucher via a credit, convert Nectar points, earn from a UK credit card etc.

      • Sharka says:
        18 Jul18 July 12:29

        AA is better for some redemptions: just not short-haul European flights. You can also earn status by purchasing items through their shopping portal and earning Loyalty Points, which offers some interesting opportunities. However, all schemes seem to be being changed, and not for the better.

      • Anon says:
        18 Jul18 July 12:32

        Qatar Airways uses Avios (that you will now earn at a better rate) so you can still get enough for all your UK earned Barclays / Amex vouchers. You can transfer them to BAEC and then to other IAG airlines to redeem off whatever rewards chart you want.

        You get two years to earn status and I don’t think there are minimum sectors? To get Privilege Club Gold (Silver / Sapphire equivalent) you need 270 QPoints a year or 540 QPoints in two years. A return business ticket to Singapore from London for example would give you 170 (including a stop in Doha). And travelling to Doha for 80 QPoints return is similar timewise to a 160 TP flight somewhere in Europe. Achieving status seems as easy as getting BA Silver once you factor in the 4 flights on BA metal needed?

        • Londonsteve says:
          19 Jul19 July 09:57

          I think we also need to factor in the cost. Qatar with Doha as the end destination is famously expensive and you’d need three returns to earn 240 plus some economy short hauls (for example on BA) credited to Qatar PC. I’d bet the 3 returns to DOH in J will cost a lot more than 4 returns to an 80 TP destination on BA.

      • meta says:
        18 Jul18 July 14:49

        I value AA miles for Etihad, JAL redemptions. They cost less than BA plus you can hold awards for three days and there are no cancellation fees.

      • BA Flyer IHG Stayer says:
        18 Jul18 July 15:01

        And domestically AA status does not automatically mean you get lounge access.

        • Sharka says:
          18 Jul18 July 19:04

          Yes, but you can get that through having a business class or first class ticket and there are Amex lounges at most major airports that are usually better than the AA lounges. The AA status works out well if you usually fly with BA from London!

    • John says:
      18 Jul18 July 12:49

      American Airlines has changed and is now actually fairly hard if you don’t live in the US (where you can earn miles via their shopping portal/credit cards/etc).
      I’ve put through one return business class long haul from Ireland to the US this year, plus 3 longer business class returns in Europe (Turkey, Greece, etc), and I’m still 10k short of their lowest status tier. Any previous year I’d have qualified with 5k miles to spare…

      • Marcw says:
        18 Jul18 July 12:59

        AA hotels – although they’ve just devalued this a couple of days ago (literally).

      • Sharka says:
        18 Jul18 July 19:05

        You could buy a Motley Fool subscription for 5,000 or more Loyalty Points through the AAdvantage Shopping Portal (plus miles as well): some creative purchases would get you status for little spend.

        • John says:
          19 Jul19 July 17:16

          You know what, I’ll have a browse. Given the anti-EEA/UK restrictions it might have limited usefulness, but I won’t know until I try.
          Thank you!

  • Niall says:
    18 Jul18 July 12:13

    I am BA gold and have been on and off. I am a frequent flyer, doing maybe 100 flights a year. I do very much fly economy and the difference between being good and getting 25% + 100% vs 25% is big. 625 avios/£6.25 worth on each LHR-BHD, almost 2,250/£22.50 on each LGW/LHR-TFS but this will likely become 150/£1.50 and 450/£4.50. The ok avios earnings is probably the biggest way I mentally justify using BA so regularly. Moving to this will cost me the best part of £1,000 worth of avios per year.

    Time to dig out the notes I dweebily made on Alaska Airlines and American Airlines. They are interesting!

    • Marcw says:
      18 Jul18 July 12:17

      You should also consider ways of spending miles/points too.

      • Niall says:
        18 Jul18 July 12:55

        Ohh I have especially on Alaska. Plus uncertainty in where mileageplan is going etc. I did an accidentally long post on this in the forum after Iberia announced. I’m hoping Rob/Rhys will do more on other frequent flyer plans now!

        • Marcw says:
          18 Jul18 July 13:14

          You’re missing the point – you need to account for the whole aviosphere, how to earn and how to burn. Mileage plan might be good, bits it’s extremely difficult to earn non-flying miles in the UK. So… Maybe that F award you were planning goes into the dust bin because by the time you’ve accrued the right amount of miles 1) the ariline doesn’t fly F on the target route; 2) the program has devalued overnight their award chart.

          • Niall says:
            18 Jul18 July 14:35

            Again, I’m not missing that point at all. Or many other things that are considerations here. My very brief post was by no means even trying to be compressive. Perhaps read my post in the forum. I’m not leaving BA/avios. The 2-4-1 voucher and avios sources are useful. But I accrue a lot of miles and a lot from flying. I believe that I can switch to crediting flights to another non avios program and benefit.

  • pigeon says:
    18 Jul18 July 12:17

    I’ve seen corporate deals (with US carriers) where earnings are distance rather than revenue based. For, eg, transatlantic business class, this is less favourable for the employees. If BA were smart, it would do it for corporate bookings too.

  • Andrew J says:
    18 Jul18 July 12:20

    Just to clarify – flights booked before 18 Oct but flown after that date will earn at current rates?

  • Gareth says:
    18 Jul18 July 12:21

    As a gold for life, occasional leisure traveller, who only uses BA on club world long haul , cheapest tickets. Just looked at trip I’m planning , £3k £500 taxes, so £2500 X 9 , 23000 avios almost identical to the old system.

    But as you said if this system had been in place when I earned my 80000 tier points on some else’s dime. I’d be literally millions of avios better of.

    • Rob says:
      18 Jul18 July 12:29

      Oh yes … I mean, when Hyatt flew me to NYC last October for a conference, the fare (I went on VS through choice) was just over £10,000, so probably £9,800-ish excluding taxes. Under this new system I’d have earned 88,200 Avios. Those 88,200 Avios convert to – at worse – £587 of Sainsburys / Nectar / eBay credit.

      As a Virgin Gold I earned 44,250 points.

  • GeoffreyB says:
    18 Jul18 July 12:25

    If it’s the accountant who come up with these schemes, then the marketing types who come up with the “simpler” garbage are as bad.

    • Bagoly says:
      18 Jul18 July 15:22

      An alternative is that this started out as an intention to simplify.
      Then some of the implications were realised, which led to adding complications.
      But nobody had the guts to point out that those changes made the original idea invalid.

    • Sarah says:
      18 Jul18 July 15:43

      As someone who works in marketing I am pretty certain that the person who came up with this bright idea said to them, guys we’re making some changes which are going to have a negative impact on most people, and in particular our most frequent flyers. What can you do to put a positive spin on it? There is no way that this isn’t a carefully thought out devaluation.

      • GeoffreyB says:
        18 Jul18 July 17:50

        Yes that’s likely the case but id like to think they’d come up with some better spin than this nonsense

  • Indy500 says:
    18 Jul18 July 12:34

    So much information and opinion! So I have AA flights booked for next May, do I understand these will still be awarded on mileage basis?

  • Harry says:
    18 Jul18 July 12:38

    Would it be an idea to report them to trading standards for false advertising? Advertising this as an improvement is utterly scandalous.

    • Rob says:
      18 Jul18 July 12:42

      It is an improvement for some people, but more losers than winners I suspect (and the winners, as per the article, don’t spend their own money on tickets).

      • Marcw says:
        18 Jul18 July 12:57

        I think most of short haul pax will benefit with the new scheme.

        • G says:
          18 Jul18 July 13:31

          Short haul pax on either the lowest HBO fares (usually less than £100-£120 qualifying spend); or corporate travellers on fully flexible Y/B/H fares are the winners.

          The vast majority are the losers here. Regrettably.

        • James says:
          18 Jul18 July 13:56

          Istanbul in Business would need a fare of £964 for the same Avios. Fares are normally £350-£550 excluding summer peak and the bump on prices this year. This is a huge devaluation for many normal routings.

          • Marcw says:
            18 Jul18 July 15:18

            Business class travellers are the minority of short haul travellers.

          • Rob says:
            18 Jul18 July 15:23

            Given that BA is running 12 rows of Club on most flights now (48 seats) its not that small a minority.

    • JDB says:
      18 Jul18 July 12:53

      BA has not explicitly worded this as an “improvement” and even if they had you would struggle with any claim for misleading advertising. Also, the email is actually rather carefully worded :-

      “We’re constantly improving the British Airways Executive Club for our Members, which is why we’re making a change to the way you collect Avios on flights.”

      “Improving” is carefully separated from the specific change.

    • StanTheMan says:
      18 Jul18 July 14:15

      I’ve told you a million times, do not exaggerate.

    • BA Flyer IHG Stayer says:
      18 Jul18 July 15:03

      I look forward to you reporting back what they say after you’ve called them.

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

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