As I said earlier, I suspect people will pay cash more than use Avios.
If they really want to maintain their status, spending say £2.5k on a CW fare to JFK would work better than 80k Avios + £1k in fees / taxes / surcharges etc.
Running that through on a card that could earn TPs, and some might see this as a fairly good thing.

BAH wise, I much prefer booking hotels direct. As diamond with IHG, upgrades, lounge access, points earning etc. can be quite valuable.
Car hire I'm happy to book with BAH.
Maybe a night before a flight at say OSL where I don't have any particular status with Radisson.

Lite fare wise, I can survive not having access to some lounges.
Some are just complete crap anyway, or are fairly limited in offerings.
No issues getting a Boots meal deal, or maybe paying £35 for something if it was worth it.
Not the end of the world missing out on a curry dish, or a fishcake, or a curried pie + instant mash and Coke Zero in GC.