Avios are changing. British Airways announced this morning a number of new rules and policies surrounding both earning and redemption for the loyalty scheme which will take effect on 28 April 2015. These changes, especially for the price-sensitive passenger, do not look particularly good. Perhaps the best news, at least for US-based Avios aficionados, is that the rules on partner economy class redemption have not changed. This means the short hop awards still price at 4500 points when operated by a partner. But there are all sorts of other changes afoot.
Avios Earn Rates
For folks who earn Avios by actually flying on BA-operated flights the news is mixed. If low fares are your thing then expect much lower earning rates; flexible fares will see an increase in earn rates for Premium Economy, Business and First Class flights. Even the “lowest” premium economy fares will see a hit in earning rates, though they do stay at 100% so essentially on par with full-fare economy. The lowest three fare buckets,. Q, O & G, will now earn only 25% credit in the Avios program. Another six, mid-range fares (K, L, M, N, S, V) will earn at 50% of miles flown. Full fare (Y, B, H) will remain at 100%.
Minimum points per segment have also adjusted in parallel with the new percentages.
And so have tier bonus earning rates.
A BAEC Gold member flying on flexible long haul first class fares sees a 33% increase in earning rate (300%->400%) while a Silver flying on a cheap short flight could potentially see earnings cut significantly (200%->75% plus lower minimums). Heathrow to Amsterdam at the lowest fare used to earn a BAEC Silver 1000 Avios; the new earning schedule puts that flight at 188 Avios earnt, an 81% reduction.
Avios Burn Rates
Here’s where things get complicated. As mentioned in the intro the rules do not change for partner economy redemption so that’s relatively easy to handle. But there are a number of other changes in the award chart which simply complicate the program. There are now peak and off-peak awards which apply for flights operated by BA and Iberia. A quick scan of the calendar suggests ~133 days in the year are peak while the other 2/3s are off peak.
There is also a shift in the way award costs are calculated for premium cabins. Today the multiplier is linear: Premium Economy = 1.5x Economy; Business = 2x & First = 3x. That changes under the new rules. For “Band 4” and above – basically anything which involves changing continents – the multipliers are now 2x/3x/4x. Business class awards just became 50% more expensive on long-haul flights. For off-peak dates it looks like business class awards are “only” 25% more expensive versus the old chart.
And remember where I said above that partner economy awards didn’t change? That’s true, but the premium cabin awards on partners did change. Partner awards always price at peak rates now so using Avios for premium cabin travel between continents, even on partner airlines, just got a whole lot more expensive. And this includes perhaps one of the best “sweet spot” awards in the chart: BOS-DUB/SNN in business class on Aer Lingus will be 37.5k, not 25k after 28 April 2015.
Other changes for redemptions include removing the “free” domestic add-on segment via LHR for regional redemptions (e.g. MAN-LHR-BUD is now 2 awards, not just 1, though it remains free for long-haul awards). Upgrades will also be more widely available, including from many discount coach fares, but the costs of those upgrades will increase as the price difference in the award charts also affects upgrade pricing. Today moving up from premium economy to business class for a New York – London flight is a 10,000 Avios award based on the difference in price between the Club World award (40k) and the World Traveler Plus award (30k). The new rates are 60k & 40k, respectively, which means upgrades are doubling in cost. It is not clear if the peak/off-peak pricing also applies to upgrades but, if it does, the news could be even worse. The spread between WTP & CW off-peak is actually 24k, not just 20k.
Guaranteed Award Seats
Harkening back to the days of yore, when award seats were loaded into inventory when the schedules opened, British Airways is promising a minimum number of award seats will be available on every flight the company operates.
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.
If your schedule is set and you have the points in your account then booking at 355 days out is, once again, the smart play. This is not the case with many other programs.
Winners & Losers
It is hard to say that there are any real “winners” with these changes. The closest I can get to that is people who didn’t get completely screwed with the new charts. And that mostly includes Avios fans who earn via partner accrual (generally CCs) and redeem for short-haul economy class awards. If that’s you then you’re doing just fine. If you happen to travel between London and the Continent and can time your trips for the new off-peak awards you might even do better as those awards are a bit cheaper. And if you fly on flexible premium cabin fares the earning rates got a bit better as well, though it is hard to say that those increases will offset the higher redemption rates for comparable travel. The concept of off-peak awards sounds great until you realize that even the off-peak rates are higher than the old rates in many cases. It is that sort of hurt.
Most everyone else loses in one form or another. Upgrades are more expensive. Premium cabin flights are (mostly) more expensive. Earning rates on low fares are cut. Elite bonus earning for mid-tier elites is cut. There is no shortage of bad news mixed in to these announcements.
And when the best news you can come up with is that some people didn’t get screwed that’s usually a rough day.
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I am an AA plat with 3 JFK-India flights this year booked in deep discount economy – O class – and was planning to credit to AA to get the 100% bonus.
Will AA’s accural for BA also change? Ticks booked before April 28 are safe for AA accrual too?
These changes only apply to flights credited to the Avios/Executive Club program. AA has not announced new earn rates for BA metal. Yet. There is no guarantee one way or the other whether AA will change the earning rates or not.
But you appear to be safe for now.
Does the following change have any material significance? “As part of an IAG group reorganisation … British Airways has agreed that Avios Group (AGL) Limited will now be responsible for issuing Avios points to Executive Club Members”
@trojan: the earning for your flights will almost certainly remain the same, as AA is unlikely to change that on short notice — expect some major changes announced in late 2015 however, once the merger with US Airways is complete. It’s going to be painful!
And of course the obscene fuel surcharges remain, even when oil is well below the average price of the last decade…
@paul, the “fuel” surcharge never had anything to do with “fuel”. As you say, it’s “obscene”, and amounts to saying, “We lie about our prices and think you’re too dumb to know it since we call it something.” Actually, BA now calls it “carrier imposed surcharge”, which really means “We lie about our prices and think you’re too dumb to know it since we call it something.” Never fly BA metal on an award, except intra-Europe, and redeem instead on partners like AA and LAN that don’t lie about their prices.
Thanks for getting into the detail and not pretending there’s an upside – I’m a big loser with this as I’m Silver on BA (use it mostly for OW lounge access) and when I redeem my miles it’s more often for the upgrade from WT+ to CW and I still have two TT vouchers. I rarely fly US domestically so the short haul redemptions have no value to me – it’s the biz class awards on partners like Aer Lingus, LAN, Cathay. with the change it seems that I may be fighting for the two seats on each flight when there used to be many more. I’m still trying to get over the loss of Star Alliance/US redemptions in my Philly Hub and now this. Waiting to see what the AA credit from BA (I tix) will be as my PHL-LHR options are BA or US – maybe the credit will be better for me over there?
How is this for loyalty?
You will now be able to fly 17 round trips from London to Johannesburg (5640 miles one way), and if flying in the lowest Economy class, you would still not get Silver.
The perception is that all companies fly their employees in Business Class, this just not the case, a vast number are cost conscious (or just tight) who are regular travellers, but will now suffer even further as rewards are reduced.
I spend most of my time away on business, away from home, one of the few ‘perks’ is the ability to use those miles and points for a decent holiday. So is it time to change my airline or change my job?
I second the post by Munchie. I always have to fly economy for business travel through my employers and yes the points helped towards a holiday. I can probably wave goodbye to all that now!!