Is British Airways Going to Move to a Revenue-Based Frequent Flyer Program?

Earlier I wrote about whether American appears to be taking the best approach in integrating airlines first as part of its merger with US Airways and only then evaluating whether to make a shift similar to United and Delta in terms of awarding miles on the basis of money spent on tickets rather than miles flown.

In making the case that American should be moving quickly on IT investments (that he suggests would be in the tens or hundreds of millions of dollars!), he suggests that American needs to do this to keep up with joint business venture partner British Airways.

If anyone reading this were CEO for the day would you not have the topic on your plate right now? Or would you rather in two years, when you decide to move to a revenue-based program because your major European partner British Airways is doing so, spend a few hundred million dollars to redo the database and technologies?

Just as a I was wrong recently to predict that British Airways would necessarily follow Iberia’s lead how it structures its frequent flyer program — and Iberia and British Airways are co-owned by IAG and share a single rewards currency that can be transferred back and forth — I think it’s pretty clear that it’s possible to be joint venture partners across the Atlantic. American and British Airways have quite different programs now. Virgin Atlantic and its 49% owner Delta have very different programs as well.

Nonetheless, Randy seems to be suggesting that British Airways is making big database investments which wold support a revenue-based program and that they could be headed in that direction.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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  1. ….. Except BA already have a revenue based FFP on the spend side, called surcharges. Cannot see them killing that golden goose

  2. How are BA and aa programs “quite different.” You accrue based on distance and redeem for various trips. If you fly a lot, you get status, which gives you higher accruals and certain other benefits.

    The differences are minor, and somewhat just confirming with regional norms. Aa, like all US-carriers, are upgrade whores…BA, like Euro-carriers, are not. BA calcs the miles far per segment versus for just the net route….but these are relatively minor…the basic crux of the two programs is the same.

    What is so different?

  3. @Nybanker – BA adds fuel surcharges to all awards where they’re included in the fare of a paid ticket. BA prices awards separately for each segment. BA has a distance-based award chart while AA is region-based. AA has mileage-based elite qualification, gives confirmed international upgrades, unlimited domestic upgrades to top tier elites.

    In any case, there are plenty of other programs where the airlines are joint venture partners but the frequent flyer initiatives don’t align (UA, LH for instance).

  4. BA already has a pseudo-revenue based system (of sorts). Status is only achieved via Tier Points. Tier Points are accrued based on class of service. Higher the class, the more the Tier Points. Flying bum in seat miles do not count for anything beyond redemptions. Flying Economy/Coach will mean that you have a long long long way to get to the top tier (BA Gold) of the BA Executive Club.

  5. @Gary – One can also read it the other way around. Maybe AAdvantage will be closely aligning themselves to the BAEC model where earning for Status and Redeemable miles are separated and not linked with each other. It signal the end of the American Y class road warrior earning Executive Platinum status through bum in seat miles…

  6. Gary, AA knows the difference between settlers and pioneers. The pioneers are the ones with the arrows sticking out. Many times it is good to keep one’s powder dry for a spell, especially with this revenue-based mileage where AA loses nothing by waiting.

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