Airline miles are already yet another tale of the rich getting richer. Many airlines have fixed the amount of miles you earn either literally or figuratively to how much you pay for a ticket, not how many hours you sit in a plane, or how many miles you actually fly. We’ve collectively come to stomach this phenomenon over the years on the basis that redemptions, that wonderful moment when you get to finally use your miles will still be worth saving for. There is something special at the end of the tunnel. Alex Cruz, British Airways “cost cutting” CEO, unveiled his vision for the future of the Avios (frequent flyer miles) program, and it’s terrifying.
Alex Cruz Just Directly Mentioned A Desire For Revenue Based Redemptions…
Revenue based redemptions would mean that the amount of miles you’ll need for your free ticket would be directly correlated to the price. For example, if the retail sticker on a First Class ticket with British Airways is $5,000, you may need 500,000 miles, versus the present 68,000 one way, regardless of retail price. The natural order of the world dictates that some people will earn miles faster than others. It’s no biggie. Someone flying weekly and spending 200k a year on an Amex card is going to earn more miles than someone flying once a year. As such, the person earning tons of miles through continued loyalty will take more free first class flights using miles than the once a year flyer, but it’s not out of the question for that once a year flyer to save up enough miles for that same special “first class” privilege. This would virtually abolish that, offering only the folks who already pay for these pricey tickets the opportunity to earn enough miles to actually redeem for one.
Here’s His Exact Quote For Reference…
“The solution to all of this is the setup that I had previously at Vueling where the actual earning of points was value-based (value of the ticket) and the redemption was actually value-based (based on the actual price of the ticket at that time). And I think that, at some point, at BA we’re going to have to start thinking about that. So you eliminate the consideration of the taxes and fees and everything else, you look at the total price and based on that price is the number of Avios.” This gem of information came from a one on one interview conversation with another points blogger, who I will credit at the bottom of the post, since he enjoys offering that level of courtesy to everyone else. It’s only fair.
Is There Any Benefit To A Revenue Based Redemption Program?
Absolutely. It’s just that a basis for value goes out the window, there are no more “sweet” spots and there’s no “maximizing”. The benefits come in the form of simplicity. You’d no longer need to find availability for a flight, every flight bookable with cash would be bookable with miles. There would be no charts or calculations for upgrades or free tickets, you’d just be shown a price in miles that correlates to the price in cash and one minor upside is that fuel surcharges would disappear. It would become “miles” for dummies, which is attractive to many, but the rates would make it virtually impossible for any traveler to extract the special kind of experience that creates a desire for loyalty. I care about loyalty whether airlines care about my loyalty or not.
What Should I Do? I Don’t Like The Sound Of This!
These are just expressions of desire for the future. High value customers, those who fly up front and expect a high level of service and attention for their $50,000 plus dollars of airline tickets each year continue to seek greener pastures (other airlines) under Alex Cruz’s cost cutting measures, and there’s no guarantee he’d be around long enough to enact these ideas. If he does maintain confidence with IAG shareholders and executives this leaves a very sour taste. I would personally begin looking to bank miles into far more rewarding OneWorld programs such as American Airlines or Japan Airlines, who I’d argue offers the strongest program with a few very interesting additional partners outside of OneWorld, including Emirates…