Skift Take
Loyalty programs are huge business for many airlines, with fierce competition for well-heeled frequent fliers. BA will be hoping these changes make its Avios scheme more attractive to existing and future customers.
British Airways has announced a big change to redemptions in its loyalty program. The airline is making every flight available to buy from just £1 ($1.25), plus Avios.
Until now, the lowest available ‘cash plus Avios’ price was dependent on multiple factors, meaning overall fare combinations varied considerably.
Operated by IAG Loyalty, Avios is the reward currency used by British Airways and other major airlines including Iberia, Qatar Airways, and Finnair. It also has partnerships with brands including American Express, Avis Budget Group, and Marriott.
Members of the Executive Club will now have the option to discount any British Airways flight to as little as £1, with the difference being paid in Avios. The incentive applies to seats throughout the aircraft from economy right up to first class.
Refining Frequent Flier Perks
In line with many of its competitors, such as Virgin Atlantic’s Flying Club, British Airways has long offered a part payment service.
This allows frequent fliers or other high spenders to lower the cash price of their booking by using more points. In addition to journeys operated by BA, it can also be used on American Airlines flights between the U.K. and the United States, as well as some codeshare services.
Colm Lacy, British Airways’ Chief Commercial Officer, said the decision was made after listening to feedback from Executive Club members. “We know that most of our customers choose the lowest cash amount when it comes to making Reward Flight bookings, so we anticipate this to be a popular option for those using Avios part payment too. Ultimately, our goal is to keep adding more choice and flexibility for members.”
The change does not impact BA’s popular ‘Reward Flight’ scheme. These will continue to be priced at a fixed rate, with a limited number available for each service.
British Airways Under Scrutiny
The development comes as British Airways continues a £7 billion ($8.9 billion) transformation program. Over the next two years, the flag carrier aims to overhaul its operation and enhance the passenger experience. It follows allegations that underinvestment and outsourcing have left the airline on the back foot.
Last month, the airline launched the latest phase of a major new advertising campaign. Its unorthodox format sparked controversy as well as critical acclaim.
Airline loyalty programs are nothing new, however, in recent years they have grown to become critical assets for many major airlines.
For example, American Airlines’ AAdvantage scheme and United Airlines’ MileagePlus program were recently valued at $24 billion and $22 billion, respectively. For its part, IAG Loyalty says there are more than 40 million Avios collectors worldwide.
Watch IAG Loyalty CCO Rob McDonald at the Skift Global Forum 2023:
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