If you view the loyalty program only through the lens of offering access to that airline's flights, sure, BA might not have much of an incentive to address the perception issue. I haven't dug through BA's financials to see what disclosure they might offer, but the airline itself is usually only one of many channels through which loyalty points get sold. Credit card partners are typically the biggest or 2nd biggest (after the airline itself) purchasers of points. Then there are all the other partners - car rentals, hotels, retail, e-store, etc. A certain portion of the customer base is fairly locked in because they're frequent flyers on the airline, but most points are sold to FOTSGs and other partners whose customers may just want to redeem for air travel, or even travel in general, and not care so much about whose aircraft they'll be flying on. So even if Avios are the only way to redeem for BA metal, they're competing against other airlines' loyalty programs most directly, 3rd party loyalty programs like Air Miles, as well as more diverse options like cash back credit cards. I don't know much about the competitive situation in the UK, and if they bought Air Miles UK, maybe there are no coalition programs, but are there things like the RBC Avion or CIBC Aventura cards out there? Or other coalition loyalty programs that might not be partners with BA but would offer the ability to redeem on VS, LH, etc? Then there are things like shopping via Rakuten or some other portal instead of the Avios e-store. So lots of sources of competition for selling loyalty points, even if none of them may offer the ability to redeem on BA.

I would also be willing to bet that the gimmicky nature of these points-only flights attracts a lot of press coverage, i.e. free media exposure to advertise that it's not as hard to redeem Avios as people think. Cheaper than buying ads in the Daily Mail!

When Aeroplan was doing these flights, I do think there was a strong perception that it was getting very hard to redeem one's points, because many people would just get no results, or very poor ones (lots of stops + long layovers), because they had a lot of marketing materials around countering that perception. The Distinction Exclusive flights fit right in with that theme, which is why I wasn't kidding when I suggested earlier that the cost might have come out of the marketing budget. Based on some conversations I've had with people who had some knowledge of these things, around the time Aeroplan started doing those flights, they had WS Rewards (launched in 2010) growing and eating market share (and WS was also gaining strength as a competitor), and there was concern about how much business Avion was picking up. Both of those programs offered a simpler proposition for customers - WSD are simply dollar for dollar against ticket prices, so you can always use them (well, almost - you need a minimum of $15 per pax (per direction too, I think?) to be able to redeem), and Avion points could be redeemed for any flight. Aimia was also somewhat hamstrung by the relationship with AC, which only had to release a certain number of seats every month at the base price (which is what they used to offer Fixed Price rewards). Points issuance was growing faster than AC's capacity, which inevitably meant it was getting harder and harder to redeem points, compounding availability issues. Hence the introduction of Market Price and marketing initiatives like Distinction Exclusive flights.

Today, I think the competitive landscape is very different. WS has been retreating, and Avion-type cards lost some lustre as people started to realize that (a) the caps on the maximum ticket value and (b) the need to pay YQ/YR in addition to taxes made the value proposition less attractive than they had initially thought. AC is still the 900-pound gorilla in the Canadian market. AC's total control over Aeroplan also gives them way more flexibility than Aimia had. They can play with the dynamic pricing formula, or if they want to attack it through marketing, they can offer promos where you get discounted redemptions, or a partial rebate after flying, both of which they've done, or they could release some big chunks of X space and send out a few e-mail blasts about the huge number of seats they've just released at very cheap points cost (which I think they've done on a more limited basis). I doubt that they need the press coverage boost that might be provided by some points-only flights.

I had the same issue, couldn't find anything until [MENTION=302102]yvr76[/MENTION] pulled up that old e-mail.