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Earlier this week, analysts at UBS downgraded International Airlines Group (owner of British Airways, Iberia and Aer Lingus) to “Sell” and cut their price target to 350p.
They cited four headwinds: slowing profit growth, weaker yields on North Atlantic routes, a softer UK economic backdrop and recent changes to the Avios loyalty programme.
British Airways shorthaul seats, London Heathrow on 28 April 2014
(Picture by: Nick Morrish/British Airways)
Avios has long been central to British Airways’ appeal; any perception that the programme is less attractive could weigh heavily.
Bottom line
UBS’s downgrade highlights how sensitive airline valuations are to their loyalty programmes. Whether the downgrade makes BA reconsider some of the less popular recent changes is unlikely, but it’s worth paying attention to how the programme evolves.
I cannot see BA caring one jot sadly. I’ll be interested to see how busy the Galleries North and South lounges are on 1st May 2026 following the changes. Most of the Golds drop to Silver, and most of the Silvers drop to Bronze, so the lounge should theoretically be quieter?