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.
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.
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.