British Airways Considering Revenue-Based Loyalty Program
This afternoon, TPG sat down with new British Airways CEO Alex Cruz. Based on reader feedback, one of the most pressing questions was about fuel surcharges: Why does British Airways continue to charge excessively high fuel surcharges on award tickets when fuel costs are so low?
While he didn't directly answer this question, he used it to pivot to another very interesting topic — the future of the Executive Club (Avios) program:
The solution to all of this is the setup that I had previously at Vueling where the actual earning of points was value-based (value of the ticket) and the redemption was actually value-based (based on the actual price of the ticket at that time). And I think that, at some point, at BA we're going to have to start thinking about that. So you eliminate the consideration of the taxes and fees and everything else, you look at the total price and based on that price is the number of Avios.
Cruz continued that it's "stupid" that Avios holders aren't able to book a British Airways flight with Avios if there's an available seat. So, it seems like British Airways is considering the Southwest Rapid Rewards or Virgin America Elevate style of points earning and redeeming. You'd earn Avios based on the amount you paid, and then you can redeem those Avios for any flight that has an available seat. The award price would simply be based on the cash price of the ticket.
There's both pros and cons to this style of program. For sure, it makes earning and redeeming a lot simpler; there'd be no flight miles to calculate or award charts to consult. Your Avios would be available for any flight that has a seat, no matter if the flight is tomorrow or just before a major holiday. And, your Avios would have a set value, and hopefully that value is set higher than some of British Airways' current revenue-based redemption options. In some sense, there's a lot to like about a program like this.
However, it'd take the "fun" out of the program. With all Avios having a set value, there would be few (if any) ways to maximize your Avios. The transatlantic sweet spots would no longer be sweet. You wouldn't be able to get up to 7 cents of value per Avios on non-US short-haul flights. And, last-minute bookings would likely be charged at last-minute ticket pricing, when there could've been a low-cost saver award under the current system.
For now, time will tell how — or even if — British Airways would implement a revenue-based program.
In case you missed the interview, below is the full video. Cruz starts talking about the revenue-based program about 24 minutes in.
Would you want the British Airways Avios program to go revenue-based?
TPG featured card
at American Express's secure site
Terms & restrictions apply. See rates & fees.
| 4X | Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 4X | Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 5X | New! Earn 5X Membership Rewards® points on prepaid hotel stays booked through AmexTravel.com or the Amex Travel App. |
| 3X | Earn 3X Membership Rewards® points on flights booked through AmexTravel.com, the Amex Travel App, or purchased directly from airlines. |
| 2X | Earn 2X Membership Rewards® points on prepaid car rentals booked through AmexTravel.com or the Amex Travel App and cruises booked and paid through AmexTravel.com. |
| 1X | Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases. |
Pros
- Valuable dining and food-related credits
- Flexible rewards with airline and hotel transfer partners
- Multiple travel and purchase protections
- No foreign transaction fees
- Access to Amex Offers for additional savings (enrollment required)
Cons
- Not as useful for those living outside the U.S.
- Some may have trouble using Uber and other dining credits
- You may be eligible for as high as 100,000 Membership Rewards® Points after you spend $8,000 in eligible purchases on your new Card in your first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply to know if you’re approved and find out your exact welcome offer amount – all with no credit score impact. If you’re approved and choose to accept the Card, your score may be impacted.
- Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- New! Earn 5X Membership Rewards® points on prepaid hotel stays booked through AmexTravel.com or the Amex Travel App.
- Earn 3X Membership Rewards® points on flights booked through AmexTravel.com, the Amex Travel App, or purchased directly from airlines.
- Earn 2X Membership Rewards® points on prepaid car rentals booked through AmexTravel.com or the Amex Travel App and cruises booked and paid through AmexTravel.com.
- Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
- Pay It® lets you tap in the American Express® App to quickly pay for small purchase amounts throughout the month and still earn rewards the way you usually do. Plan It® gives you the option to split up big purchases into equal monthly payments with a fixed fee. You’ll know upfront exactly how much you’ll pay.
- Updated! $120 Dining Credit: Earn up to a total of $10 in statement credits monthly when you pay with the Gold Card at Grubhub (including Seamless), Buffalo Wild Wings, Five Guys, The Cheesecake Factory, and Wonder. This can be an annual savings of up to $120. Enrollment required.
- $100 Resy Credit: Get up to $100 in statement credits each calendar year at over 10,000 qualifying U.S. Resy restaurants after you pay for eligible purchases with the American Express® Gold Card. That’s up to $50 in statement credits semi-annually. Enrollment required.
- $84 Dunkin' Credit: Earn up to $7 in monthly statement credits after you pay with the American Express® Gold Card at U.S. Dunkin’ locations. Enrollment required.
- $120 Uber Cash on Gold: Enjoy up to $120 in Uber Cash annually with your Gold Card. Just add your Card to your Uber account and you'll get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an Amex Card for your transaction.
- New! As an American Express® Gold Card Member, you can enjoy complimentary Hertz Five Star® Status. Enjoy benefits like skipping the counter at select locations, adding an additional driver at no additional cost*, and vehicle upgrades**. Benefit enrollment and Hertz Gold+ registration are required. *Additional drivers must meet standard rental qualifications and must be a spouse or domestic partner to qualify as complimentary. Other additional drivers subject to fees. **Benefits are subject to availability and vary by location. Additional Hertz program Terms and Conditions including age restrictions apply.
- Take advantage of a $100 credit towards eligible charges* at over 1,300 upscale hotels worldwide when you book The Hotel Collection through AmexTravel.com or the Amex Travel App **. *Eligible charges vary by property. **The Hotel Collection requires a two-night minimum stay.
- Book your travel through the Amex Travel App with added peace of mind – backed by American Express® service and support. Only for American Express® Card Members.
- Whenever you need us, we're here. Our Member Services team will ensure you are taken care of. From lost Card replacement to statement questions, we are available to help 24/7.
- No Foreign Transaction Fees.
- Annual Fee is $325.
- Terms Apply.