Decoding Airline Loyalty: Are Rewards Truly Worth It?

Swift summary

• British Airways (BA) recently revamped its frequent-flyer scheme, renaming “Executive Club” to “The club.”
• The updated loyalty program now awards Tier points per £1 spent on the basic fare (excluding taxes/fees), making elite perks more expensive to achieve.
• Achieving Bronze status under the new setup requires spending at least £3,500 annually. Previously, elite Gold status was attainable for less than £3,000 with strategic ticket purchasing.
• Frequent flyers expressed dissatisfaction over increased costs and diminished benefits, with many exploring alternatives such as airline loyalty transfers via platforms like Status Match.
• Airlines globally are restructuring their loyalty programs post-COVID; this includes Iberia, Qantas, and lufthansa.
• BA’s parent company IAG disclosed meaningful profits (£420 million in 2024) from Avios operations alone due to strong margins in its loyalty subsidiary compared to airline operations.
• Alternative ways for infrequent flyers to earn rewards include credit card bonuses, retail partnerships, surveys, Uber rides, and voucher conversions.

Indian Opinion analysis

The overhaul of British Airways’ frequent-flyer scheme reflects a larger trend among airlines worldwide post-COVID: prioritizing profitability within their customer engagement models. By aligning tier points with direct spending rather than travel distances or ticket classifications alone, BA signals a shift toward rewarding high expenditure rather than frequent flying-potentially deterring cost-conscious customers.

For India-a growing market feeding into global aviation-this move may prompt reevaluation among outbound travelers who frequently enough leverage international schemes for better flight value.Indian consumers tend to be highly price-sensitive yet actively engaged in leveraging rewards-based systems through credit cards or aggregated travel apps like MakeMyTrip; hence alternative entry-level benefits like retail-linked point accumulation may resonate here.

However, partnerships impacting redemption flexibility-like Avios integration across airlines including Qatar Airways-and scalability of similar schemes by regional carriers could set precedents within Asia-Pacific’s competitive aviation sector. It remains key for all stakeholders reliant on frequent-flyer appeal not just to sustain participation but also maintain affordability amidst evolving business dynamics.

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