Sunday 4 September 2011

Avios says adios to BA Exec, IB Plus and Airmiles

Avios sml
Loyalty is making headlines again.  With Airmiles announcing that it's to rebrand to Avios, there has been a media feeding frenzy discussing everything from the u-turn on taxes and potential devaluation through to the re-branding and how long it might last.
Overall the publicity seems to have been negative but then this is to be expected; Airmiles is a well loved brand but has become a little like Woolworths before it's demise - everybody of a certain age knows about it and many remember it fondly, however actual usage has declined over time from it's height in the late 80's and early 90's with only 2m active members now out of the 8m total.
Renaming it will feel like the end of an era for many.  However people mellow over time and get used to change, even for every day brands like Norwich Union (Aviva) or Marathon (Snickers).
While most of the mainstream commentary though is focusing on the fact that Avios is replacing Airmiles, what's interesting is that it's also replacing the BA Exec club and Iberia Plus, now all part of International Airlines Group (IAG).  Both of these frequent flyer programmes will retain their current branding, but the underlying currency (whether that's BA Miles or IB Puntos) will change to Avios.
This is also not just an alignment of currency name, it's also an alignment of the currency itself.  BA have been quoted on Flyertalk as saying:-
We realise that we may have members in the Executive Club, the Avios reward programme or in Iberia Plus so we are developing a new tool called Combine my Avios which will allow you to combine some or all of your balances into one or the other programmes
This is actually quite an interesting step.  By combining Airmiles UK, BA Exec and IB Plus into a single currency they have instantly created an international loyalty programme - albeit heavily biased to the UK and Spain.  If this was just BA and Iberia combining then you could argue it was more of a consolidation of schemes in the same way Northwest and Delta programmes combined.
The inclusion of Airmiles UK though which is not a frequent flyer programme and is instead a more traditional coalition programme suggests an ambition for the currency to be used wider.
This is backed up by Andrew Swaffield, Managing Director of the Mileage Company who runs Avios when he was quoted in Business Traveller Magazine as saying:-
[The intention of the new programme was to] "create a new shared global reward currency to provide benefits for all three members"
While the main focus of discussion is still around how members perceive the change in benefits with the introduction of Avios I suspect the real discussion is yet to be had about the potential impact of a new, global reward currency with around 17m members (Iberia Plus 4.2m, BA Exec 4.5m and Airmiles UK 8m).


Anonymous said...

It is disgusting that the decision was made to give such little notice. Many customers have been saving airmiles for years and exchanging Tesco vouchers that could have been spent in store, for Airmiles that will now be effectively worthless since taxes make up the majority of the cost of a long haul flight.

Mark Sage said...

It's never great when scheme rules change, especially if this is seen to be devaluing your hard earned currency. However, it's worth remembering that the inclusion of taxes in Airmiles redemption was only made back in October 2008 (and miles were adjusted up to account for this), before then taxes had to be paid separately in cash as they will be now. I suspect this is more for alignment reasons with BA/IB than anything else, but it's not good for long haul.

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