Bad news. British Airways and Iberia change Avios accumulation rules: will be revenue based
With a note on its website on October 31, Iberia announced that it will change the way it accumulates [...]
Iberia
British Airways
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With a note on its website on Oct. 31, Iberia has announced that it will change the way it accumulates points Avios for members of the loyalty program, and that in the coming months the same move will touch British Airways' Executive Club.
What changes
As is the case with many other loyalty programs, from ITA Airways' Volare to Air France/KLM's Flying Blue, there will be a shift from a gain calculated on the basis of distance traveled to a accumulation based on the cost of the ticket multiplied by the level of card held.
Above you can see how Iberia today announced the change. New members, or those without the status, will accumulate 5 to 8 Avios for every euro spent.
Good to remember also that the multiplier applies only to the cost of the ticket not the fees. As is also the case in other loyalty programs
Why this way of "rewarding" frequent flyers is wrong
This system is deeply flawed for a number of reasons. Paradoxically, one could end up accumulating less than 50 Avios by buying a basic economy ticket to fly to New York, less than you accumulate by responding to a survey. It may sound absurd, but a 400€ ticket often consists virtually only of taxes and surcharges, which are high with BA. So the fare share is likely to be marginal and produce a poor number of points.
Giving points based on spending does not reward FFs, rewards only big spenders who are probably not even interested in miles because they have unlimited spending capacity and do not even have the flexibility to book early using points and miles.
In the U.S., where this mode of accumulation originated first, companies make more money selling points to banks and credit card companies than they do "independently" with frequent flyers. In Europe, where co-branded cards are not a comparable reality, things work differently.
Those who pay for a 10-thousand-euro ticket probably travel at the company's expense, fly on planes that are already full, and do not seek the added value of miles. In contrast, those who travel looking for the best compromise between ticket price and schedule also value the accumulation of points as an extra benefit. These passengers might then be tempted to fly with another carrier or to credit the points to a partner, thus generating a loss for BA and IB in both cases.
In recent years, I have started to fly frequently with BA., also because finally there is a new business class, the Club World Suite, and because I pass through London Heathrow more and more often. I liked the certainty of gain of Tier points and Avios that I could calculate even before I bought the ticket.
This decision may prompt many users, including myself, to choose to credit flights to a different program, such as Qatar's Privilege Club or Finnair's frequent flyer, and in this way continue to earn points based on the distance flown and not on how much was spent on the ticket.
In this case I need to re-evaluate ITA Airwyas much-maligned Flying program., certainly the basic accumulation is done through a multiplier of the amount spent, but then there are other multipliers based on route, class, and cabin. Which programs such as Flying Blue, Miles&More, and BA's Executive Club will not have either.
Fly BA but credit on other carriers
Thanks to the system of aviation alliances passengers can take advantage of status benefits and accumulate points on their preferred program. Since companies do not pass data on ticket expenses to each other, cross accumulation will continue to be based on distances flown and related multipliers.
To give an example: in my recent trip to Kuala Lumpur with Saudia I chose to credit the points to my Flying Blue card, a ticket of less than 1000€ allowed me to accumulate 30k FB points, the same expense for the same flight with AF/KLM would have generated less than 8000 FB points.
In conclusion
Iberia's decision to change the rules of the game, unannounced since he announced it yesterday for today, is a bad sign. Other companies, see Lufthansa, have always given months if not years of notice allowing frequent flyers to decide how to manage their accumulations.
The fact that BA will also go down this same path is even worse because the British carrier's loyalty program was one of the best. My advice right now is to aim, if you hunt status, for an alternative program and, according to the rules of the program you choose, accumulate all your flights on the latter.
Personally, I am Gold with BA until October 2023 and I have a number of flights scheduled with this airline and other OneWorld carriers that I was thinking of crediting to my Executive Club card, but at the moment I am not so convinced. Now we just have to wait for BA's announcement and see if and how things will be different from what Iberia announced.
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