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Frequent Flyer Overhaul: How British Airways is Redefining Loyalty in the Skies

Jan 13

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Aircraft waiting on runway

British Airways (BA) has recently announced significant changes to its frequent flyer program, the Executive Club, set to take effect on April 1, 2025. These modifications have sparked considerable discussion among travelers and industry experts. To understand the implications of these changes, it’s essential to explore how frequent flyer programs operate, their benefits to corporate customers, and how they’ve evolved over the years. This blog focuses on the recently announced Frequent Flyer overhaul and how British Airways is redefining loyalty in the skies


Understanding Frequent Flyer Programs


Frequent flyer programs (FFPs) are loyalty schemes established by airlines to reward customers for their continued patronage. Members accumulate points or miles based on various factors, traditionally including the distance flown and the class of service. These accrued points can be redeemed for rewards such as free flights, seat upgrades, access to exclusive lounges, and other travel-related benefits.


Benefits to Corporate Customers


For corporate clients, FFPs offer several advantages:


Cost Savings: Accumulated points can be redeemed for flights or upgrades, reducing travel expenses.


Employee Satisfaction: Access to lounges and upgrades enhances the travel experience, contributing to employee well-being.


Travel Flexibility: Priority bookings and flexible ticket options allow for efficient travel planning.


Enhanced Partnerships: Collaborations between airlines and corporations can lead to tailored travel solutions and additional perks.


Evolution of Frequent Flyer Programs


The concept of rewarding customer loyalty in the airline industry dates back several decades. In the 1950s, United Airlines had a program that tracked customer patronage, offering plaques and promotional materials as rewards. The first points-based loyalty program was introduced in 1979 by Texas International Airlines, which tracked passenger mileage and rewarded members accordingly.


In 1981, major airlines like American Airlines and United Airlines launched mileage-based programs, allowing passengers to earn miles that could be redeemed for free flights and other rewards. These programs evolved over time, incorporating partnerships with hotels, car rental agencies, and credit card companies, expanding the avenues through which members could earn and redeem points.


British Airways’ Recent Changes


British Airways has announced a comprehensive overhaul of its Executive Club loyalty program, set to take effect on April 1, 2025. The program will be rebranded as “The British Airways Club,” introducing a revenue-based system for earning Tier Points. Members will earn one Tier Point for every eligible £1 spent, shifting the focus from distance travelled to the amount spent.


Additionally, the thresholds for achieving tier status will change significantly. To qualify for Bronze status, members will need to earn 3,500 Tier Points; for Silver, 7,500 Tier Points; and for Gold, 20,000 Tier Points. This represents a substantial increase from the current requirements, aligning with the new revenue-based earning structure.


The Tier Point Collection Year for all Executive Club Members will be standardized to start on April 1 and end on March 31 each year. This alignment aims to simplify the tracking of Tier Points and status progression for members.


Implications for Corporate Customers


The shift to a revenue-based model may have varied impacts on corporate clients:


High-Spending Corporations: Companies with substantial travel budgets may find it easier to attain higher tier statuses, unlocking premium benefits for their employees.


Small to Medium Enterprises (SMEs): SMEs with limited travel expenditures might face challenges in reaching the new, higher thresholds, potentially reducing their access to certain perks.


Travel Policy Adjustments: Corporations may need to reassess their travel policies to align with the new earning structures, ensuring they maximize the benefits available under the revised program.


Industry Trends and Future Outlook


British Airways is not alone in transitioning to a revenue-based loyalty program. Major airlines, including American Airlines and Delta, have implemented similar models, reflecting a broader industry trend towards rewarding higher spending over distance travelled. This shift aims to enhance profitability and cater to premium customers who contribute more significantly to airline revenues.


However, these changes have sparked debate among travellers. While they may benefit high-spending corporate clients, leisure travellers and smaller businesses express concerns about the increased difficulty in attaining elite statuses. The evolving landscape of frequent flyer programs suggests a continued emphasis on revenue-based models, with airlines seeking to balance profitability with customer loyalty.


Conclusion


The evolution of frequent flyer programs reflects the dynamic nature of the airline industry and its efforts to adapt to changing market conditions. British Airways’ recent changes to its Executive Club signify a shift towards revenue-based loyalty schemes, aligning with industry trends. While these programs continue to offer substantial benefits to corporate customers, particularly those with significant travel budgets, the increasing thresholds may pose challenges for smaller enterprises and leisure travellers. As the industry continues to evolve, both airlines and customers will need to navigate these changes to maintain mutually beneficial relationships.


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