We aren't talking about airfares though, we are talking about redemptions. You buy airfares with money, and so (broadly speaking) airlines know they must compete with other airlines' airfares or people will go for other airlines. That competition limits any price increase.

OTOH with redemptions there is no competition. The FF scheme has you over a barrel as the miles you've accrued aren't fungible. The only limit to the price increases they can institute are reputational, i.e. do they want to trash their FF scheme's reputation?

BA in particular also guarantees to make a certain number of seats available for redemption, and has published redemption charts. The same cannot be said for airfares, where there is no guarantee of any particular fare class being made available, which are only published indirectly (to travel agents and GDSs).

The two situations aren't remotely comparable.

Indeed - that's the kind of argument I would expect BA to make against any legal claim.

There has been no sudden change (e.g. an overnight hike in APD) that requires this change, it is entirely IAG initiated. As such they would be straining credibility to claim they couldn't give at least some notice, even if only a few weeks or a month.

The little insider information we do have suggests this isn't the cause. If it is, though, then surely the answer is to change the cancellation fee structure so that you have to "cure" the difference to the £35 fee if you want your Avios back.