Magic01273

Correct. BA know that some people won't care too much about the changes. And they also know that large numbers of people have few options but to accept their offering - and that many more are generally too lazy to make good on their threats to take their money elsewhere - hence they know they can get away with the enhancements, slipping standards, ageing products and program devaluations. Many people do ultimately roll over and take it.

However that is probably one of the reasons why an apparently successful airline seems to have so many disgruntled customers - but still somehow manages to remain on-the-up.

And BA aren't alone in adopting that attitude. Many other companies also rely on their market dominance and/or a historical brand legacy they may have earned in the past - which may well allow them to erode their product, or rest on their laurals for a considerable time without too much impact.

But that pattern isn't one of commerce's infallible laws of physics. It didn't work for Nokia. It didn't work for Tesco. It didn't work for a large number of other companies that have fallen from on high. There is a breaking point at which more customers will make good on their resolve to walk away, and a business will almost certainly start to see signs of things slowing down as well as softening customer loyalty.

I'm not saying that time has come... I don't think these changes on their own are that significant. But taking these changes within the overall context of BA's products, services and their loyalty program...

Things can change quickly. It could only take the emergence of one or two key competitors, or existing competition adjusting their strategies and improving their products, changes in the economy - any number of factors.

I really hope that BA is making long term cost reductions in the form of improvements in efficiency, in addition to all the saves that impact customers and erode their product. Ultimately, with all the success we keep seeing in their numbers one could argue that we should be seeing BA regularly improving their product. Yet, oddly, it seems harder and harder to see much evidence of that...

EDIT - just to say, this post wasn't meant to sound quite so "the sky is falling down". It's not. It's just a general statement of hope that BA aren't being lazy about where they cut or invest in their business to makes saves.

irishguy28

Agreed...so what was the supposed loophole?

RobDBA

I'm not exactly wailing - I fully recognise that BA has the right to do what it wants and this has probably been fully costed and overall will acheive what they need it to.

And no, the 'devaluation' of Avios really isnt a huge concern, they were magic money thats lost a little of it's sparkle but there are still good deals to be had and more seats available.

However the tier point earning changes do seem designed to stop silver card holders like me (700 points last year my highest ever, all earnt down the back) from getting to silver and that hurts.

When you are flying 30 flights or so a year, knowing you can get to the airport in plenty of time and get through security relatively quickly and have a nice lounge to relax, have a drink, do some work, get some food etc is worth quite a lot of loyalty. I can see how given my spend this may have completly wiped our any margin they were making on me and people like me, but you can't expect that not to hurt.

I still prefer BA to most other options available to me but I wasnt loyal to them prior to the changes 4 years ago that gave me hope of silver and I won't be loyal to them in the future if it means my many hours of transiting airports each year are considerably less comfortable. That is a business decision for BA that I understand, but its one that hurts me and many others on here.

Globaliser

Exactly.

Three things seem to follow from yesterday's announcement:-

1. [*]
2. [*]

Like every other change to BAEC and BA generally, we will find things that we like about the new setup, even if there are things about the current setup that we will miss. It's not just Avios and awards. One of the most vivid recollections that I have was how the sky was going to fall in when some highly profitable long-haul routes were to be transferred to the short-haul hell-hole known as T1, and how this would be the worst business decision that BA ever made. Yet T1 and Zone R actually became one of the most loved features of flying BA - and we still talk nostalgically about it.

Gold77

If you do a paid MAN-LHR-CDG do you get credited 2 flights in terms of TP and Avios?

GUWonder

I used to spend many nights with Hilton hotels as my first preference for most of my hotel night needs, but as it devalued the program more and more, my business gravitated increasingly away from Hilton and to the benefit of other companies. I still have Hilton Gold status, and its benefits get used by me from time to time; but I only stay there when there are no better values around or other factors land me in a Hilton hotel. In other words, Hilton has lost a large chunk of my business but not all of it. Same thing goes for airlines. With this additional cut in benefits given to me for my repeat business, BA will lose some of my business it would otherwise get -- not that I expect it bothers the airline when capacity discipline and/or demand are such that the profitable customer is easily replaced by other customers.

paulwuk

On the wholea typical road warrior is good so less impActed. The euro warrior will still retain silver and the important lounge access from the 50 flight thing.

The loophole was you could have a 7 day stopover in London, which doubled the APD and I believe increased the heathrow tax, real cash going out of Ba.

But setting that aside, as who wants to go to London-

For man to Lisbon Ba would pay Ł13 apd, Ł13.80 Portugal tax, and Ł56.11 heathrow tax - Ł81. The RFS reduces this to a Ł11 subsidy

For LHR to Lisbon Ba pay 13+13.8+30.11, Ł56.11, which is a Ł21 subsidy

In business its Ł94 from Man, and Ł69 from LhR. A Ł19 subsidy from heathrow, but either a Ł9 subsidy from man, or more likely a zero subsidy (well be charged business rates on the domestic hop, which doesn't include a business cabin)

I don't think regional people mind so much about the extra Avios, I certainly don't - indeed prices have gone down in Europe, and earnings have gone up in WTP. It's the extra cash, especially as disproportionate that it is, is the kicker.
Couple with te CE enhancements and heathrow mess (including removal of fast track connections) means it's less worthwhile Choosing Ba.

The regions are suffering from the loss of BMI and now VS. Ireland will go the same way soon. That said its time to look at Avios.com options - man to mla for rfs rates, Ł35 in economy (Ł4 subsidy) and I assume Ł50 in business. Only loss is the reduction in hold luggage, this could be a blessing in disguise.

Globaliser

This is not meant to be having a go at you, but this example does illustrate the point. How can it be designed to stop Silvers getting to Silver, when there is no change to TP earning in the vast majority of economy classes? The only classes in which TP earning is being reduced are Q, O and G - which are almost by definition the least profitable classes. If you need to keep Silver with the same level of flying, just lift your usual booking class by one or two levels.

paul4040

Spot on. I don't see the point in stockpiling points of any kind when I don't set the rules on how they're used.

Churn, earn and burn.

Magic01273

My only issue with this is point 2. I'm not so sure the tier point changes do such a great job at targeting "unprofitable" customers. I might accept "less profitable" - but I don't believe that everyone that has been negatively impacted by the tier points changes (for example) is/was a fully loss-making customer to BA.

And whilst I'm not usually a fan of trite sayings - I cannot help but think of the old adage "look after the pennies and the pounds will take care of themselves" Their is a grain of truth in this, even for massive companies.

layz

Will ba.com make it easy to do so? They do offer when logged in (cheapest fare earning full tier points i.e. 20 on a shorthaul), will they let you also select the cheapest earning 50% tier points?

LupineChemist

At the end of the day it's IAG taking a strategy of not pursuing too much loyalty for travelers who typically fly short haul economy.

We'll see how it shakes out, but there are quite a few people who fly around Europe a lot, but maybe not excessively who will be losing out on a lot of benefits. There's no real upside other than a "thinning of the herd" a bit. So yeah, the redemption rate changes aren't all that bad (are much more reasonable for us at IB, thank [deity]) but it's not positive news for anyone and it's taking away a pretty big benefit to a large subset of people. They are of course free to pursue whatever strategy they want, but it will leave people feeling spurned and allowing basically now loyalty for short haul unless you already have status from either long haul business flying or just sheer number of segments.

Magic01273

I think you are being a bit too linear in terms of how you classify customers as profitable/unprofitable.

Silver can be tough to achieve with certain patterns of flying - even when you throw in a number of "profitable" flights/fare classes as well as a number of discount classes.

If you simply brand someone as an "unprofitable" customer because they happen to take one, two, three discount fares a year, you may very well be ignoring the fact that they may also be taking a number of other more profitable (yet small Tier-point-earning) fares.

In other words, you may well be making Silver unachievable for certain customers that are, actually, driving a healthy profit to BA despite their flying including *some* discount fares.

Gold77

You can also achieve silver by doing 50 BA flights a year irrespective of their fare class. Have they removed this feature?

irishguy28

I'm pretty certain that they have not removed that feature.