British Airways is moving to a system where you’ll earn Avios, the points currency used to fuel the loyalty program, based on how much you spend rather than how far you fly.
Air travel is a particularly emotional endeavor and that’s even true when things go on time without a hitch. It may not be new, but flying is still aspirational and vital for so many reasons.
For a long time, the way people earned miles and rewards in the British Airways Executive Club when flying was based actually on the distance flown. It matched the emotional component of more reward for longer journeys, even if it wasn’t entirely logical.
Particularly since the invention of the internet, increased airline competition and new sales technology, distance became an increasingly questioned metric for earning. This is a world where someone can fly from London to Australia for £450/$550, but fly from London to Geneva for £600/$784.
British Airways Moving To Spend Based Avios Earning: Background
The first programs to switch over to “spend based” earning were in the U.S. with programs like Delta and none have shifted course, while many have joined. That list already includes European programs like Air France/KLM’s ‘Flying Blue’ as well as Miles & More from Lufthansa and Swiss.
Spend based earning rather than distance based earning creates a tighter relationship between spend and reward points dished out. If you ask any loyalty program leader, you’ll always hear that unlocking more reward seats for members with points is a key concern. Having better economics around the points helps that cause.
It’s fair to say it’s more transactional and feels less warm and fuzzy than the emotional relationship of flying long distances to earn more points, but it’s also fair to say that it better rewards people flying shorter distances more frequently, and people flying long distances may still earn more rewards this way. Let’s dive in.
Avios Earn Rates Under British Airways New Program
Any flights booked from October 18th, 2023 will earn based on spend rather than distance. And yeah, any flights booked before that date, even for travel after that date will earn as they currently do.
To be clear, metrics for earning elite status is unchanged for the time being and this solely impacts Avios points earned which can be spent for rewards.
From October 18th, 2023 British Airways Executive Club members will earn Avios based on the following rates per pound spend. For other currencies, total eligible spend will be converted into GBP.
Fare and carrier charges apply to the new Avios earn rates but government imposed charges do not. Hopefully British Airways will do a good job of displaying how many Avios you’ll earn in the sales flow, so you don’t have to do any math.
- Blue members will receive 6 Avios per qualifying* £1 spent
- Bronze members will receive 7 Avios per qualifying £1 spent
- Silver members will receive 8 Avios per qualifying £1 spent
- Gold members will receive 9 Avios per qualifying £1 spent
For a direct, apples to apples European comparison, Air France/KLM’s “Flying Blue” offers 4 points per euro spent for base members, and then 6,7 and 8 for elites. This makes British Airways changes more generous by at least one point per tier.
I find the best way to assess loyalty changes are through practical real world examples. There will always be red herring situations, but factually speaking British Airways will actually issue more points to members via this new system rather than fewer.
Take a recent trip to Geneva
On the lowest fare, which may still be quite expensive, London Geneva earns 125 Avios each way currently. Yes, a round trip would earn a measly 250 Avios. Even the most expensive economy fares only earn 500 Avios each way, for a total of 1000 round trip.
Under the new upcoming system, a base ‘Blue’ member paying just £100 each way would earn somewhere around the current high Avios total for the economy cabin. Geneva fares often trend into the £275 each way mark during key times which means base members would earn far move Avios under the new system than before.
The £275 example would yield 1500 circa Avios each way which easily surpasses the current highs. A Gold member at 9 Avios per £ spent could make off extremely well.
Winners And Losers
Spend based earn is a concept far more familiar than many people will make this out to be. Blogs including this one shout all the time about the merits of rewards credit cards. It doesn’t take a genius to figure out that these are spend based earn tools.
Spend X, get Y Avios.
The British Airways Premium American Express Card has offered as much as 70,000 points as a welcome bonus in the UK this year and has defined earn rates. All partner hotels, Uber partnerships and online e-store purchases are also spend based earn.
Take a Booking.com promo of 10 Avios per £1 spent on hotels via BA and you have an identical program to the new British Airways spend based earn for flights.
For many flight distances there will be some winners and losers in the new spend based program, but again, more points will be issued by British Airways, IAG Loyalty and Avios to support this program, which means more people are being rewarded, more.
Clear Winners
Inflexible travelers with fixed dates who often purchase high fares will mostly win out with these changes. They’ll earn more Avios. The more painful the ticket cost, the more Avios you’ll earn to soften the blow.That may likely include families on school holiday schedules, business travelers and premium leisure customers.
Generally speaking, base members will be more rewarded than they were before on short haul travel with fares at current levels or higher. Any elite Bronze, Silver and Gold members will have their spend better captured.
And though no one likes paying for ancillary purchases, ancillaries like seat selection, upgrades or other fees will also be eligible for Avios earning.
Marginal Wins And Losses
Customers who typically fly longer distances like a London – New York as their primary route will win some and lose some. New York is one of the “cheaper” routes of longer distance, with fares sometimes dipping as low as £350 round trip these days, or £1500 in business class.
With high government taxes on this route, like other US routes, the earning may really fluctuate. A “Blue” member would currently earn 1729 Avios each way to New York on most economy fares currently.
Looking at a £505 round trip fare, only £310 of that fare isn’t government taxes. A blue member would earn 1510 Avios for this flight round trip, which is an unfortunate dip in earning.
In business class, I recently flew London-New York as a Gold member and earned 17,290 Avios round trip. At a rate of 9 Avios per £1 spent, a £2,300 business class ticket would earn me more Avios, hitting exactly 18,000.
And this is a key distinction: currently, there’s no benefit to spending more. It doesn’t matter whether I paid £1500 for a business class ticket and you paid £7,0000 — we’re rewarded the same. In the new program, if you spend £7,000 on a ticket as a Gold member, you’ll earn 63,000 Avios for a flight you previously earned 17,290.
Potential Losers
I would certainly never derive pleasure from calling the most pedantic spreadsheet folks in the Flyertalk crowd losers, but they’re likely targets here. People flying almost exclusively on error fares will earn fewer points than they currently do with flights earning based on distance as they do currently.
Since these types of fare typically make it to less than .0001% of customers, it’s not something for most to really factor. Don’t get me wrong, I love a generous fare, but I am also not greedy enough to think I deserve to be top tier for enjoying them.
Those who book the lowest super sale short haul fares may also earn fewer Avios. Some like to use fares like £80 round trips as an example, but there are a lot fewer of those than there are realistic fares over £250 at the moment.
It’s not like there were big hauls of earning from these flights anyway. Pre-elite-status earnings typically topped out around 1,000 Avios round trip for most short haul routes. Hardly a primary avenue for significant points earning compared to credit card spend, wine clubs or e-store purchases.
Spend Based Earn: Sustainable Economics?
The fuel needed and crew required between London and Geneva is nowhere near the cost required to fly someone between London and Sydney, yet as previously noted, it might be cheaper to fly to Sydney and you would currently earn more points. That puts an immediate strain on loyalty program economics across the business for no logical reason.
U.S. airlines have used spend based earn to invest in better loyalty perks than those available in other markets, largely because there’s better accountability for customer value. Points are issued without question. It’s a bit “show me the money” (barf), but it’s also a lot easier for finance teams to see the value that loyalty brings in real terms.
There will always be a fair element of missing the “good ole days” of loyalty being an open ended game without perfect logic, but there’s also excitement around programs actually performing better and delivering on their value promise.
Having better tech, more valuable benefits and more seat availability is arguably far more exciting than the “game” of old, however aspirational and whimsical it felt.
However you feel, British Airways is moving to spend based earn starting October 18th, and from that day forward there will be a direct relationship to what you spend with the airline and what you earn, much like you already do with credit card rewards, e-store purchases and partnerships.
What’s the situation with Avios earned on partner airlines? Is that changing to spend based also?
Not yet – because BA dont know how much you paid for your ticket – so basically where possible buy 001- stock or 157- (AA or Qatar tickets) or utilise a OTA like Expedia.
Alternatively book a flight with a ‘one night’ accom/car and it becomes a BA holiday and will use the old chart too.
Low fares – not error fares – all suffer, so the Tier Point Runner ex-EU will lose out on the Avios earned. For now the Tier Points are unchanged.
However, the loss of the Gold bonus is significant and slaps Golds quite hard.
I suspect its more like a full-swing back handed b1tch slap for golds (unless you’re travelling on a corporate fare of course)
I’m not an excessive spreadsheet user and fly both for business and leisure, however, I can assure you that those in the ‘Losers’ category will constitute a great deal more than ‘less than .0001% of customers’. A few examples, based on a sample of this year’s (long haul) travels:
LHR-HK return (WT+) 16,213 avios Vs 7,847 (new set-up) – that’s a 52% drop
LHR-CDMX return (WT) 9,702 Vs 5,075 – 48% drop
LHR-NBO return (WT) 10,320 Vs 4,725 – 54% drop
I find those findings astounding.
Short haul-wise, in a similar manner to your Geneva example:
LHR-MAD return (WT – £250) 1,376 Vs 1,750 – a 27% increase with the new set-up.
Ouch.
Guillaume, love the analysis here. This is the best thing anyone can possibly do. Crunch the numbers for their own travels based on receipts from recent previous trips or by looking at upcoming fares during actual planned travel dates. matrix.itasoftware.com shows a breakdown of gov taxes to strip out when doing the math.
You’re not wrong that many will have routes where there are slashes. It’s just irresponsible to claim that “everyone” is going to eat “lose” on this and that’s why I spent more depth on the marginal section and shared a similar example of circa 50% drop. Everyone has different travel patterns and many do more short haul flying than long haul (I realize, not all). So in your example above, someone is perhaps losing on the longer trips but gaining more; and more frequently on shorter trips. Someone might be short on LHR-HKG Avios but make that back on intra EU flight volume. It’s just impossible to declare a pure win/lose situation without people doing the vital independent analysis you provided.
You’re approaching this exactly the right way and I wish everyone would be as sensible.
You do realize that 1GBP is worth more than 1 EUR, don’t you? You do get that right? So while the ratio may seem more genrous to you, it is in fact almost the exact same!:
” Blue members will receive 6 Avios per qualifying* £1 spent
Bronze members will receive 7 Avios per qualifying £1 spent
Silver members will receive 8 Avios per qualifying £1 spent
Gold members will receive 9 Avios per qualifying £1 spent
For a direct, apples to apples European comparison, Air France/KLM’s “Flying Blue” offers 4 points per euro spent for base members, and then 6,7 and 8 for elites. This makes British Airways changes more generous by at least one point per tier. “
The current GBP/EUR exchange rate don’t make it “in fact, almost the same”. Your point is close to valid for people purchasing BA tickets in Euros who have their currency converted based on GBP, but the apples to apples comparison I’m talking about is someone purchasing an AF/KLM ticket in Euros is getting rewarded at a rate of 4,6,7,8. Their fares aren’t lower because they’re in Euros versus GBP. A fare in market is a fare in market. So for each local program, it’s about reward rate and BA went higher than the others. That’s the apples – apples.
How much did BA pay you to write this “article”?
Precisely zero. Spend based has been proven to be effective in the US, where airlines offer far superior technology platforms (usable apps, instant changes, rich benefits) and BA was actually one of the few carriers not on the model yet.
“For the time being” is the operative phrase for Tier Point earning being unchanged. It may only be a matter of time until that morphs to a revenue-driven model. Airlines now ascribe value to a customer by money spent not miles flown. It may be safe to say that the “old days” of mileage runs/TP runs may soon be an “It was fun while it lasted” memory.
No Gilbert, the only people who win out are London based last minute corporate fliers, that pay ridiculous costs to fly mostly Transatlantic. These BTW are both a slowly dying breed (in my humble experience I would say that I observe no greater than 30% British passengers in Club in any TA flight that I take to/fr the US), the rest are from either the other end or CONNECTING through London from somewhere else. There is no advantage here for any BAEC Gold Card members in any class of service. You accuse another commenter of picking and choosing which flights to use as examples, when you yourself did the same exact thing! Even your ridiculous dismissal of my criticism of your innumerate GBP to EUR comparison you whisk away…….and actually shows that you do not know what you are talking about. Forget those two currencies. If someone buys their tickets in DOLLARS of NUC’s as BA actually prices most tickets NOT sold in the UK and around the world, one would come up with a GBP number, which is what BA would “reward” a person from. Similarly AF?Kl does the same, and they do it based on EUROS. So the amount of reward is almost the exact same 1 Euro is 86 pence, One GBP is is 1.16, and while rates change, over the last two decades, other than for about 2 days during the 2008 crisis the EUR has NEVER been worth more than a Pound. So instead of coming up with an inane excuse which hurts your credibility, just admit that you got it wrong. Talking about “a fare in the market” is quite simply ridiculous, especially when the airline(s) are in fact making about revenue. I suppose you thin it also the same when A US credit card give 1 point per dollar, and a UK credit card gives one point per GBP for the same airline under the same program too, right?
You’re so smart. I wish I understood basic exchange rates!
What’s the going rate for writing a shill piece?
You’d have to ask another blog. I haven’t been compensated in any way for this coverage. Fun fact, I don’t “sell” credit cards in the UK either, so I’m not compensated in that way either.
I just adore the fact that people can’t comprehend that my opinion is based on experience and actual understanding of the way these spend based programs have impacted programs, and that I couldn’t possibly just have a positive opinion here. Attacking a person rather than an issue is the lowest level of stupidity.
“I find the best way to assess loyalty changes are through practical real world examples. There will always be red herring situations, but factually speaking British Airways will actually issue more points to members via this new system rather than fewer.”
And at this point you lost all credibility. As a Gold I have just looked at 5upcoming trips and in all but 1 case I will lose Avios and quite a few. These are based on a relatively expensive CE (I win) 3 ex UK F tickets booked in a cheap A class and a CW booked in I.
Anybody who flies say MAN-LHR-XXX or EU-LON-XX will also lose out and no they aren’t all doing ex EU TP runs…
Your positive spin on this is embarassing.
The factual speaking comment isn’t to any one individual, but rather the overall number of points issued to flyers.
I’m sharing my perspective as someone who has watched this in the US, and in comparison to the rates of other EU programs with inferior earn rates. The US has more rewarding rates. This has been tried and tested in the US. It’s not perfect, far from, but neither is distance based. Distance based also sends many bad messages about incentive in the current climate. Like it or not, when economics are more closely monitored, it’s been shown in the US to actually create better benefits. Let’s hope that happens here.
Gilbert, did you really say, “The factual speaking comment isn’t to any one individual, but rather the overall number of points issued to flyers. ” Do you really have such a lack of understanding about how this is done? Here are a couple of facts for you, assemble them how you need:
1) Points and miles are worthless. Airlines and passengers assign different values to them, an airline may assign a nominal value of 2 cents per mile for tax purposes, i.e. if you win 1 million AA miles they will declare a value of $20k to the IRS. Fliers and bloggers such as yourself try and assign values based on usage, this is totally subjective and rarely anyone regularly surpasses that value, airlines like DL and probably soon to be BA have been trying to lower this to roughly 1 cent. Airlines also try and “sell” as many miles as they can to partners, the biggest being credit cards and the “floor” price in the industry has been anywhere between .8 and 1.3 cents over the last 2 decades.
I am sure you are familiar with all of the above at least in some shape or form. What you seem to not fully understand is that INTERNALLY airlines not only value these miles as mere fractions of a cent, but also have a HUGE spoilage rate, and in fact many airlines have “accounting ways” of bringing up and discounting these values as it seeks them.
Want to lower the “liabilities” (even though there are none as every airline has maintained the right to reset/change/cancel etc every facet of their programs), Then they set thresholds, every account with less than 10,000 or 20,000 miles is excluded, because one cannot use the miles for a flight (for example). On the opposite end, if they want to increase their liabilities and even an excuse to build reserves against possible future liabilities they can do the opposite, or any number of things.
The “overall number of points” means absolutely nothing, and is aviation speak to make the uninformed feel that they have some real insight into something that they barely understand.
There will be winners and there will be losers… Surely the net impact will be fewer avios awarded, other than those given in an attempt at service recovery.
However the basic service remains sub par for the fares charged.
Mr Doyle makes the right noises but the reality remains a hollowed out organisation with overly densified cabins, failed IT and nonfunctional customer service channels.
I’m aware that not before time IAG habe agreed to spemd enough to “fix” the IT, though in reality this seems to be culling functionality other than sales channels.
So, why tje changes now? More misplaced confidence in a bottomless captive market as a result of fortress Heathrow? Are yhe log promised levelling up changes going to happen sooner than anticipated?
Bloody Awfuls actual service remains uncompetitive, cabins are still not cleaned properly, the IT *still* sucks (both internal and customer facing), planes are still intentionally under-provisioned so that the advertised menu is not available, short notice cancellations continue, customer service channels don’t work; online, in person or over the phone when something goes wrong.
The minor sops to both consumer and employees to undo some of the savage damage done by ‘Slasher’ Walsh (and his against shareholders will golden farewell) and “the Cruzifier” may have earned Doyle some media coverage but having just announced £1.1 BILLION *half year* profits he’s doing the absolute minimum, whilst still squeezing other areas of the operation.
Wherever there’s a choice, the competition will almost always be better and always better value so #FlyAbBA