Originally Posted by
nordic
The whole point of Avios system is to move the Avios freelancer between the programmes at the rate of 1:1. I don’t remember which company earns on IB but not on BA. The trick is to give the IB number on booking and then move the Avios to BA. But only the reward Avios move, not the tier points. Why would AY be a new member with totally different rules of the Avios ecosystem.
Yeah I get that. I think I'm having issues formulating my line of thought here.
If there is a free, unlimited 1:1 exchange between BAEC and AY+ (which I agree is reasonable to believe) then there is a value problem.
Fact:
GBP:EUR ≈ 1 : 1,17
BAEC Gold earns 9 avios/GBP ≈ 7,7 avios / euro
Example (everything with fictive, made up numbers):
Let's say the average BAEC Gold spends 10 000 € and earns 77 000 avios. He does this flying a typical BA-coded flight LHR-EU, and does 20 returns/year (500€ a piece).
Then we have average platinum basic member who also spends 10 000 € flying HEL-EU. Finnair tickets faces lower taxes, so every actual € spent on Finnair will generate more spend ex taxes. Further more AY has such a great revenue management (or maybe a loyal following that are willing to spend more) so they can charge higher end prices for the same type of trip. Higher total price combined with lower taxes makes the net spending much higher. 10k Eur thus only needs 16 return flights (625€ a piece) to generate the same 77k avios.
BAEC and AY+ won't share avilability and they probably won't share redemtion charts. This is how Finnair plans to control how avios earned with AY stays with AY. (I'm very sure they didn't join avios just to create big payouts to IAG).
Now - on paper 90k has the same value, an avios is an avios is an avios? In reality, they won't. I'm thinking Finnair and BA both have a target like "10 r/t should generate around 1 award flight". The 90k avios on BAEC should then cover 2 r/t awards, while the same 90k avios in AY+ should conver 1,6 r/t awards. So Finnair then corrects the redemotion side by raising the price.
Now the savvy member starts to move avios from AY+ to BAEC, beacuse their avios will redeem more there and AY wil be forced to pay IAG real life cash monies.
Also, as BAEC has so much more redemption possibilities and so much better availability, so even if they sync'ed earnings (taking into account taxes, average prices, Purchasing power, exchange rates and what not), the availability will drive savvy members to move avios out of AY+
This is the problem I'm speculating about. The quote indicated Finnair is going to protect "their eco-system" by setting (and resetting) earn/burn but it is so complex that they will fail. Thus there will be incentive to move avios around in a way they didn't anticipated.
Eg within days of QR going avios and allowing BAEC and QRPC accounts to be combined, all premium awards were gone from QR, after a massive influx of Avios from BAEC. QR might be happy because they got pay from BA and BA might be slighly sad about it. But the biggest loser is of course the average QRPC member whose points now can't buy a premium award on "their own" airline anymore.