BA's Loyalty Market Meltdown

The market has responded badly to BA’s changes – what can airlines learn?

Nothing beats the King James Bible for glorious English prose. Chapter 13, verse 18 of the Gospel of Luke is particularly memorable:

“There shall be weeping and gnashing of teeth, when ye shall see Abraham and Isaac and Jacob and all the prophets in the Kingdom of God, and you yourselves thrust out.”

Substitute “British Airways lounges” for “Kingdom of God” in the above and you have a good idea of the reaction to recent changes in the London-based airline’s Executive Club loyalty programme.

Nobody wants to miss out on swanky sofas or precious perks, especially when you know that Abraham, Isaac and the rest are living it large. And BA made things worse by promising that their changes were “simple”, when in fact they were anything but.

So within 24 hours of the news there were more than 500 posts and 50,000 views on FlyerTalk, a bulletin board, and 300 comments on Head for Points, the blog for premium-flying miles and points collectors travellers in the UK. Gnashing of teeth indeed…

At first glance, all of this seems to be a bit of an over-reaction. And I am not going to criticise the decision, which may in fact be fair and sensible over the long-term. But I think the whole kerfuffle highlights a number of issues which persist in airline loyalty, despite progress in recent years.

How is the Executive Club set up?

BA flyers earn “Avios” and “tier points” (TP) when they travel with an Executive Club number in their booking.

Avios are the currency, redeemable for flights and other products (see here and here). Once paid out according to a mix of distance flown, cabin and booking class, they are now divvied up based on ticket price and membership level.

It is those membership levels that are achieved with TP. The more you fly and the bigger the seat, the more TP you earn and the easier it is to earn a shiny card.

Take a longhaul return in First once a month or two shorthauls in Club (biz) a week and you will have access to the fabulous Concorde Room at Heathrow Terminal 5, normally available only to first class passengers.

Four flights a year in World Traveller Plus (premium economy) will let you use the Club check-in desks.

In the middle lie various other benefits. Some are nebulous, like special phone numbers and priority boarding. Others like free bags and complimentary seat selection are genuine money-savers, if you use them.

Most prized of all is lounge access.

I researched how passengers perceive lounges when I was at Qatar Airways. A key finding was that lounge access tends to be the first airline benefit travellers receive in their flying career.

For most young travellers, flying regularly in economy without lounge access comes before flying in biz or first class with access. So people look fondly on the lounges as they remember the warm fuzzy feeling of their loyalty being rewarded for the first time.

Psychology tricks passengers into thinking that lounges are more valuable than they actually are. Which should be like a magic money tree for airline loyalty engineers. Until they mess things up…

What changed?

Up to now the clock on collecting TP is reset for different travellers at different times. My year end is 8-Feb, tomorrow if you are reading this on publication day!

From 1-Apr-2025 every member will have their TP reset on that date. As BA have explained things and for complex reasons presented on other sites, it looks like those with year ends later in the calendar will lose time with a shiny card.

What are BA’s members saying?

Here are the words of a few worried posters from Head for Points.

NorthernLass asks:

“So does this effectively mean that everyone will lose x months of status, depending on their current membership date?”

Ian says:

“Oh my goodness. My TP year is 8 Oct. I’ve booked 1500 TP of travel between 8 Oct 24 and 30 Nov 24, which means I’d be Gold until 30 Nov 2026. All planned and booked. Now they change it so I only get it until 31 Mar 26, I think. Seems unfair they can change this like this.”

And PETER writes:

“This is really bad timing for me. I was literally just in the process of booking a TP run during March 24 to get me gold, which would have lasted until end October 25 (8 Sept earning year-end currently). If I understand this correctly my gold will now only last until end April 25, some 6 months less as the March 24 flights will not count “double” in the transition period.”

Trevor sums up everything nicely:

“The previous 16 pages of comment highlight what a shambles it is for BA to tear up the rule book with so little notice. Then replace the rule book with ambiguity.

I think it is the speed of the change, rather than change itself, that has caught everyone by surprise, messed up future planning and caused upset. If BA had given notice this was happening from April 2025 we would all have had some time for thought.

Instead we have reference to an undefined “transition period” and everyone’s earning period effectively reset to 1st April 2024 to 31st March 2025 with little over a month’s notice. BA is clearly not concerned about reputational damage from its actions.”

These people and customers like them are frequent travellers, or at least regularly fly on BA year-in-year-out. They spend their own money buying expensive seats that would otherwise go unsold. They love the Qatar Airways Qsuite (see article) when they fly to Asia but credit miles & points to BA’s frequent flyer programme as it is more appropriately tailored to their home country, so BA earns money from their flying while getting to sell even more seats.

They participate in lucrative co-brand opportunities. IAG Loyalty, owned alongside BA by parent company IAG, earns commission when they buy non-flying services such as banking and retail.

At the opportunity cost level, they are probably BA’s most profitable, although not highest revenue, customers. Their opinion matters and airlines should take heed of their “sounding brass and tinkling cymbal” (more King James, 1 Corinthians 13:1!).

That BA sparked such a bad reaction in the marketplace shows that the airline is out of touch and has a poor understanding of their best non-corporate customers.

Why is everyone upset?

People have planned their travel to align with their status renewal year. Ian has committed to BA and expected that his travel would keep his card shiny for longer than it may be. Ian could have flown on somebody else had he known.

I would guess that NorthernLass is probably worried about future travels and reconsidering her options when she should be looking forward to giving BA money for her next trip. A real own goal for the airline.

PETER has been planning to buy extra flights (a TP run) to qualify. For self-funded status chasers like PETER, free seat selection, extra bags and a lounge upgrade on a few visits can add up to great value in the mind of the consumer.

Some travellers like PETER will already have bought and paid for their extra flights. BA has let them down and will get away scot free under the “we may change the programme at any time” clause.

Adding insult to injury, Head for Points readers seem to have voted for BA and IAG to win many awards at a gala shindig the other week, according to my LinkedIn feed. Ask some of BA’s best customers now and I bet they would like to claw those awards back.

What could BA and other airlines do better?

The first thing BA got wrong was the year end date. 1-Apr is slap bang in the middle of easter – three of the next ten easters fall in March. Passengers who travel around easter may (re)qualify for status in one year but not others. BA will lose many over the long term.

It looks like the date was chosen by accountants as it is aligned with the financial year. What customers might think was clearly not taken into account.

1-Feb or even 8-Jan after Christmas & new year would have been better. Or 1-Oct/8-Sep after the northern summer holidays. Maybe even 1-Jun after the business travel season and before the summer could have been a candidate. The end of the tax year has nothing to do with travel.

BA’s second mess up was in communication. The e-mail telling everyone about the change says “we’re changing your Tier Point collection period to make things a little simpler”. The market response shows it was anything but. It has all the hallmarks of something designed and extensively discussed by a committee in an ivory tower.

The third gremlin was timing. BA think they are being generous by offering effectively a year’s grace period. But it turns out that is not enough – as suggested by Trevor, they really needed two.

Doing those three things differently would have been sensible tactics. But they are really addressing the symptoms not the cause. What needs to change at airlines like BA and others is the stake-holding that staff and ordinary decision-makers have in travel and loyalty with their own carrier.

When airline staff travel for work they do so using the airline’s own zero fares. They do not earn Avios or TP and are probably grateful just to have a Club seat, or indeed anything other than a jump seat, since who gets the nicer places to sit is determined by a combination of seniority and length of tenure.

If airlines like really want to understand their customers, they need to become customers themselves. They need to know what it means to plan, collect points and make aspirational redemptions. It is not enough to ask NorthernLass, Ian, PETER & Trevor what they think in focus groups. Airline managers need to BE themselves like their travellers.

Here is a three point plan to make that happen:

1. Every commercial manager must fly once a year on a revenue ticket in every cabin, paying for the ticket themselves and reclaiming through expenses – let them feel the pain of seeing the expensive fares hit their credit card statement but also let them see the rewards start to flow and enjoy planning to use them for their own family’s holidays

2. Duty travel should earn Avios and TP, just like for regular business travellers, with either participation in the standard frequent flyer programme or a special (better, not worse!) programme for the airline’s staff

3. Abandon the “industry discount” ID00/90/50 model and offer a staff discount against the regular fare instead offering full commercial benefits – to be fair to BA, I believe they already have something similar called the “hotline” and they should build on that. Other airlines should too.

oliver AT ransonpricing DOT com