All change on Avios: British Airways’ frequent-flyer scheme becomes all about the money

British Airways has announced the way that travellers earn frequent-flyer points will be transformed from October. No longer will passengers collect points according to the length of the flight – BA now says it’s all about the money, with Avios awarded per pound, not per mile.

The airline says it will be a “transparent, consistent and simplified way to collect Avios” and is based on “customers’ feedback”. But airline points experts disagree, with one labelling it a “dud”.

These are the key questions and answers about what it will mean.

A brief history of airline loyalty schemes

The oldest surviving frequent-flyer scheme is American Airlines’ AAdvantage loyalty programme. The basic concept remains the same: the more you travel with a particular carrier, the more you are rewarded for your loyalty. The airline hopes that you will choose it ahead of rivals – and, as a reward, fill a seat which would otherwise be empty and travel on a journey that you would otherwise not make.

Schemes have acquired many bells and whistles. Stay in the right hotel chain, rent a car from the right company and pay with the right credit card, and points can be accrued in their tens of thousands – then used on partner airlines and for many other experiences, from afternoon tea at Fortnum & Mason (Virgin Atlantic), a private tour of the British Museum and Tower of London (British Airways) to tickets for the 2023 Rugby World Cup in France (Emirates).

BA also operates “Avios-only” flights – where the only way you will get on board is by using your frequent-flyer points.

Avios? Surely you mean Air Miles?

That was the frequent-flyer currency that British Airways introduced in 1988 – but it was replaced 12 years ago by a new currency, Avios, which is now used by BA and its sister airlines, including Iberia of Spain and Aer Lingus of Ireland. The idea remains the same. It’s a loyalty scheme: you earn points by flying frequently and can exchange those points for yet more flights. And we’re talking here about a radical change in the way that passengers earn.

What’s changing – and when?

For tickets bought from 18 October, you will earn Avios for each pound you spend, not each mile you fly. The basic deal is that you’ll get six points per pound – but if you’re a more illustrious member of the British Airways Executive Club, which you join if you fly enough, that will increase according to your status.

Crucially it applies only on the base fare and airline surcharge, not fees and taxes. While you can instantly see how many miles you would be flying, it’s difficult to delve down and find out how much of your fare is taken up with taxes and charges.

So on a £54 fare from Gatwick to Malaga in October, you’ll earn points on only £23 of your spend. For a lowly Blue member that will give you 138 points. For tickets bought before October you would earn 255 points, equivalent to a quarter of the distance. So overall your earning power is halved. But at busy times, such as tomorrow when the fare is £264, you would earn 10 times as many points. Even then you would need to make that flight 35 times to earn enough for a return trip from London to New York.

In comparison, a business traveller in first class paying £15,790 return (of which £300 is taxes and charges) from London to New York who belongs to the Gold tier of the BA Executive Club will earn 139,410 Avios – almost enough for a “free” round trip on the same route, though slumming it in business class, and having to pay £350 for taxes on top.

BA says you’ll also earn on things like seat selection and excess baggage.

What is British Airways telling passengers?

The airline emphasises the change is based on “customer feedback”. The press release announcing the move is headlined: “British Airways simplifies and expands the way customers collect Avios on flights.” It promises “a transparent, consistent and simplified way to collect Avios”.

Ian Romanis, British Airways’ director of Retail and Customer Relationship Management, said: “We continue to listen to our customers’ feedback and ideas to evolve our Executive Club.

“This is a simpler and more transparent system offering more opportunities to collect Avios than ever before and rewarding loyalty based on customers’ cash spend.

“It’s a tried and tested model already used by a number of global airlines, including our sister airline Iberia.”

What do the experts say?

Rob Burgess, editor of the frequent-flyer news site, Head for Points, is scathing. He writes: “It represents a sharp cut in Avios earned for most people, except for those on fully flexible tickets which are generally paid for by their employer.

“This model of earning Avios has been used by other airlines and is generally agreed to be a dud. The only exceptions are finance directors, who can easily understand how the cost of miles is linked to the money coming in and so like the idea.

“Those who think more carefully about these things usually don’t agree. This is because you are rewarding the wrong people most highly.”

Aligning reward with spend might seem to makes sense, but Mr Burgess says: “The people who are flying on £10,000 fully flexible business class fares to New York are the ones who are laughing all the way to the mileage bank. However, with few exceptions, these are corporate travellers whose choice of airline is made by their employer. You could give these people zero miles and it wouldn’t impact the money that their employer spends with the airline.

“Weirdly, you will now be rewarded more for flying expensive routes where only British Airways could get you there. You will earn fewer Avios on competitive routes where you can choose between carriers.”

He speculates that British Airways could introduce what are called “carve-outs” – particular routes where rewards are increased. This already happens at Iberia, BA’s sister airline, which has upped the earnings on the Madrid-Barcelona route (where trains are ultra-competitive) and on routes to Latin America.

“The new ‘earn based on what you spend’ method is great, it seems, except when it isn’t,” says Mr Burgess. “Let’s see if there are similar carve-outs on routes where British Airways is under most pressure.”

Ben Schlappig of One Mile At At Time writes: “In the US it was terrible when airlines switched to revenue-based earning, because they otherwise awarded at least 100 per cent miles for all tickets; the change won’t be nearly as bad for British Airways passengers, where discounted tickets only earn Avios equal to 25 per cent of the distance flown. Some members will appreciate the ability to earn Avios on ancillaries, which weren’t previously rewarded.

“These revenue-based systems give business travellers on someone else’s dime a strong incentive to book the most expensive ticket possible, which is no doubt part of the motivation for a change like this.”

What’s the most efficient way for normal people to use Avios?

I use Avios for short-haul European fares where the cash fare is very high – typically for last-minute bookings. Tomorrow, for example, the lunchtime flight from London Heathrow to Nice is £536 for cash – but is available for just 5,250 Avios plus £17.50, making each point “worth” almost 10p. The usual assumption is roughly that an Avios is worth 1p.

You don’t need many points for these sorts of journeys, which is just as well. As I always travel on the cheapest possible tickets, I’m accustomed to earning only a pittance, so the change won’t make much difference. Like many people I mostly earn points by spending in the right places and using the right kind of credit card.

But environmentalists will say that to encourage even more flying, especially in ultra-damaging premium classes, is is madness at a time when we should be flying less.