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Head for Points was able to obtain unpublished text from an interview BA’s CEO, Alex Cruz, gave to the South China Morning Post. The long and short of it was the revelation that many of us aren’t surprised by, but is still disappointing, that BA will turn revenue based sometime this year. What’s even more frightening are the comments he made that Avios would potentially have a fixed value for redemption. It’s bad enough that flights wouldn’t earn miles based on mileage flown, but to have mileage redemptions at a fixed cost completely undermines the current structure of their program. Gone will be the days of uber valuable 4500 Avios short haul tickets, instead replaced with getting a measly $45 off the ticket price ( or whatever arbitrary value they assign.) Here’s the piece of text that cracks on the egg on BA’s plans.
From Cruz:
So at the moment we have seen how a number of airlines around the world have changed the way in which they collect points and redeem points to be much more value driven. If the ticket costs £1,000 you get more points than if your ticket cost £100.
Also, at the time of redeeming, finding more flights available for different amount of miles. I think we are definitely going to go in that direction.
One of the key instruments which I hope we will completely redevelop by the end of the year is the “Pay with Avios” concept. I got a short-haul ticket for my son the day before yesterday and I used 2,500 Avios to discount it by £20. As a consumer, I was looking at it and I wasn’t given an option to buy the whole ticket or pay half of the price. What I really wanted was a slider. I am willing to pay £30, “how many points will you take?”. So moving it up and down. That is the direction we are heading in.
Thoughts:
I can totally understand why Cruz is taking the airline in this direction, but why is the board allowing it…Now? He ran Vueling and has been accused of eroding the Queen’s airline by taking it in the direction of just another low cost carrier. GSTP even wrote an open letter to him – so its no surprise he’d take on the mold of Southwest, the question is the timing and the goal of the airline.
Currently British Airways offers one of the worst business class products of any major carrier in the world. The only reason that I’d choose them over a competitor is price and the amazing bonus that Alaska is currently offering on their flights, so I could in turn, use Alaska miles to fly on an airline whose product is superior. But, at some point, Alaska will eliminate the big bonus ( especially if BA decimates their own program), and the price factor isn’t really, well, a factor. Most times, flights can be purchased through aggregators that offer many airlines at roughly the same price. I choose BA and endure the worse business class in the hopes of upgrading to First, but more importantly to earn big bonuses.
But, I’m not the market that BA would be targeting. Programs that give more miles based on spend are positioning themselves to reward the big spender, and should, in theory, have a great premium product, right? Cruz is intimating that BA would be targeting the high spend business traveller. BA is a friend to the financial services market, and you’ll often see their planes en route to NY, SFO, SIN, HKG or the UAE filled with bankers. But…much of the uncertainty around Brexit would lead one to believe that the financial services industry could get poached by Paris or even Germany. If that’s the case…BA would suddenly be thrust into a position to compete against airlines servicing the same routes with better premium products and loyalty programs.
It reminds me of Hyatt and AA in the past few years. Many people chose to fly AA and stay at Hyatt because of the loyalty program. I’m not saying that BA’s is as advantageous as those were at the time, but a complete obliteration of the program we know is a huge devaluation when there isn’t any product enhancement to offset it. If this was the ultimate goal, I would have thought BA would leverage that decision on a super badass business class that premium customers would prefer to fly…that isn’t the case.
What do you think?
Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities.
Chase Sapphire Preferred® Card
Welcome Offer
Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening.
Annual Fee
$95
Points Earned
Transferrable Chase Ultimate Rewards
- 5x on all travel purchased through Chase Travel℠
- 3x on dining, including eligible delivery services for takeout & dining out
- 3x on select streaming services
- 3x on online grocery purchases
- (excluding Target, Walmart and wholesale clubs)
- $50 Annual Chase Travel Hotel Credit via Chase Travel℠
- The begins immediately for new cardmembers and after your account anniversary for existing cardmembers
- 2x on all other travel
- 10% Anniversary Bonus
- Every year you keep the card, your total spend will yield a 10% points bonus. If you spend $10k in a year, you’ll get 1k bonus points
- Chase Sapphire Preferred continues to redeem at 1.25c in the Chase Travel℠ and the slew of other benefits remain in tact including Auto Rental Collision Damage Waiver ( primary ), purchase protections, etc.
- Points are transferrable to 14 Ultimate Rewards partners
- Redeem in Chase Travel℠ for 1.25 cents per point
- No foreign transaction fees
- Suite of Travel and Purchase Coverage
- Auto Rental Collision Damage Waiver is my favorite
- Get complimentary access to DashPass which unlocks $0 delivery fees and lower service fees for a minimum of one year when you activate by December 31, 2027.
- $95 Annual Fee
We keep an up to date spreadsheet that lists the best ever offers: You can find that spreadsheet here.
Historically 80k is a very, very good offer and hit in both 2022 and 2023. In 2021, we saw the offer hit an all time high of 100k. Who knows if that will ever come back.
Main Cast:
Cards that earn flexible points and should be used on the bulk of your purchases.
Supporting Cast:
Cards that earn fixed points in the currency of the airline/hotel and can not be transferred at attractive rates. These cards yield benefits that make it worth keeping, but not necessarily worth putting a lot of your everyday spend on.
The Chase Sapphire Preferred® is exceptional starter card and offers transferrable Ultimate Rewards, and pairs well with other Chase cards.
If you carry this card alongside Chase’s cashback cards like the Chase Freedom Flex® and Chase Freedom Unlimited® or the business versions: Ink Business Cash® , Ink Business Unlimited® you can combine the points into Preferred account and transfer into hotel and airline partners
Annual fee is quite low at $95 a year + you get a 10% anniversary bonus on points + $50 hotel credit in Chase travel.
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