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BA has just announced it will be making some (presumably significant) changes to its Avios pricing for award flights on partner airlines… but it’s not sharing what those changes actually are yet.
Here’s the announcement in full:
“From 30 May 2019, we’ll be changing our Avios prices on reward flights with the following partner airlines: Alaska Airlines, Air Italy, American Airlines, Cathay Pacific, Finnair, Japan Airlines, LATAM, Malaysia Airlines, Qantas, Qatar Airways, S7, Sri Lankan and Royal Jordanian Airlines.
The price of Avios upgrades on American Airlines only will also be changing from 30 May 2019. You will pay the difference between the Avios prices of your booked cabin and your upgraded cabin.
Don’t worry if you have an existing Avios booking with one of these airlines. It’s still valid and you can make changes or cancel it if you need to*. Our new Avios prices will apply to any changes or new bookings you make after 30 May 2019.
There will be no change to our Avios prices for reward flights and upgrades with British Airways, Aer Lingus, Iberia or Vueling. The Avios prices for our other services are also unaffected, so you can continue to benefit from spending your Avios on our wide range of hotels, car hire and experiences.”
As you can see, there are no details there at all, apart from that the change will apply to all non-IAG partners and will be introduced on 30th May 2019. Lack of detail is almost always a bad sign when it comes to loyalty programmes (if they were making a positive change, they’d want you to know about it), so it’s reasonable to think the changes will be negative.
This seems very much like a way for BA to say they’ve given advance notice, while trying to limit the size of the stampede of partner redemptions that would happen if the full details were released. Obviously I hope we’ll get more info very soon, but I wouldn’t necessarily bet on it.
My favourite bit in the (completely useless) FAQs about the changes was this gem:
“Example taxes, fees and carrier charges on partner airlines at Wednesday 17 April 2019 for a return journey with outbound travel on 5 May 2019 and inbound on 12 May 2019 are:
Chicago (ORD) to La Guardia (LGA) on American Airlines £8.60 plus Avios
Hong Kong (HKG) to Taipei (TPE) on Cathay Pacific £63.40 plus Avios
Tokyo Haneda (HND) to Fukuoka (FUK) on Japan Airlines £4.60 plus Avios
Lima (LIM) to Cusco (CUZ) on LATAM £12 plus Avios
Kuala Lumpur (KUL) to Bangkok (BKK) on Malaysia Airlines £28.90 plus Avios
Sydney (SYD) to Melbourne (MEL) on Qantas £20.20 plus Avios
Doha (DOH) to Bangkok (BKK) on Qatar Airways £138.70 plus Avios
Moscow (DME) to St Petersburg (LED) on S7 £16.40 plus Avios
Male (MLE) to Colombo (CMB) on Sri Lankan £107 plus Avios
Dubai (DBX) to Amman (AMM) on Royal Jordanian £180.20 plus Avios”
A list of the taxes/fees for a bunch of example itineraries for dates before the changes kick in. Nothing about Avios at all (whether current or future prices) – very useful 😉 .
It’s difficult to know quite what to make of this announcement for a number of reasons (primarily the lack of detailed information), but here are my initial thoughts:
- Changing the partner redemption rates makes an already confusing programme even more difficult for people who aren’t obsessed with points/miles to know how many Avios they need for a free flight. That may sound like an odd thing to do from a marketing point of view, but I think we have to assume that it is intentional.
- BA doesn’t pay partner airlines much when members redeem for partner flights, so even if people are redeeming on partners more than BA anticipated, I can’t see how that makes a huge difference in itself.
- The one big difference at the moment between redeeming on partners as compared to BA itself (for long haul anyway) is that BA imposes big surcharges on its own flights that passengers often don’t have to pay if they redeem their Avios to fly with a partner. Is the aim to charge more Avios for partner flights in order to reflect that difference and make redeeming for BA flights seem more attractive by comparison? It’s possible.
- The problem with that argument is that BA makes a lot of money from selling Avios to credit card companies (and others) – and that’s a global business, with a heavy emphasis on the US market. If American credit card holders no longer see BA Avios as an attractive currency for flying domestically on American Airlines, for example, will they keep getting BA cards and transferring their Amex Points (etc) to BA Executive Club?
- I’m confused.
We knew that significant changes were going to be happening to Avios redemptions at some point, but this particular one has come out of left-field. Tinkering with the partner redemption rates just seems a very strange thing to do right now, when we know from investor presentations that the big strategic goal is the “Progressive introduction of Dynamic Pricing”.
Could it be the case that BA is going to introduce dynamic pricing for partner awards first, before doing so for BA flights? I suppose it’s possible, but that sounds like a very complicated way to do it.
Perhaps the new partner award pricing won’t be dynamic, but is instead being set up as a separate system – in preparation for the introduction of dynamic pricing on BA (and Iberia, Aer Lingus, etc) flights later this year. We’ll find out soon enough, but that’s my best guess right now.
In the meantime, if you were intending to redeem Avios on a partner airline, I would recommend doing so asap.
What do you think is going on here?