I am sure you're right about the latter - that BA think their new setup will be better for them. I mean, it would be madness if they did this thinking otherwise. What I am less convinced about is that this belief is based on strict rationality and careful number counting. I have seen too many really poor business decisions over the decades, by small and big businesses and anywhere in between, to have too much faith in how well thought out it all is.
On the first point - I am not entirely in agreement. The new structure is, in fact, telling a chunk of people that they're no longer going to be offered an incentive to keep giving BA their business. Some probably will continue to fly BA, of course, but the question we can't answer today is whether overall BA will be winning out of this. I struggle to see how they could, but then again I don't have all their facts and I don't run an airline. What I can be certain of is that the new structure has removed my incentives to give my business to BA.

Perhaps, but I perceive it differently: to me, the loyalty programme was about filling up those empty seats, it does not exclude having higher paying customers or indeed trying to lure more of them on board. Using the LP incentives to fill up empty seats is a direct win to their bottom line after all.

On the other hand, fate is a fickle mistress. It is entirely possible that last years big profit contributor might hit headwinds and reef the sails, while one of the smaller fish suddenly becomes a whale. When that happens, it is unlikely they will forget a perceived slight. What BA appears to have done is alienate a portion of its BAEC membership, while possibly crippling its ability to attract fresh blood. It is certainly conceivable this may work for a few years, but as the number of fattened calves reduce, where is the replacement tranche? There are also those who travel for business with an ability to direct their custom, and making their ability to gain status more difficult is surely not an ideal plan to attract it.

If some minor thing such as TP runners was the issue, a calculation modification awarding the TP on a complete trip distance versus a per element/distance would remove the convoluted routings and perverse doubling back incentives�but these were only �profitable� for the flyers because of the absolute thicket that airfare rules have become, and whose fault is that.

The problem BA seem have within the UK is they needed the short haul routes to be �interesting�, which they did via things like outsized CE rewards for short/cheap flights or loss leading intra-Europe routes, in order to attract custom away from the competitors flights that might be more direct or cheaper. That�s now gone, so it will be an interesting barometer to watch, as those bookings will likely soften well before long haul numbers become evident, if this plan is going to go south.

If you are mostly flying long haul F why do you care about status? Is it really worth being loyal to BA on �5000+ fares just to get access to the CCR for a few short haul flights?

They don't because the spend based model inserts a level of unpredictability. On the old system, I know that because I fly JFK-LHR six times a year in CW or First I will get gold status.How much I end up spending is subject to market conditions, fare availability, how last minute I book the flight etc but I know I'll have status which means I can rely on it when making my other travel plans. That reliance has now gone away with the new system. As it happens my spend last year would have got me gold, but the TPs for flying CW JFK-LHR can and will vary massively from one flight to the next (from 1,000 to 6,000) and it isn't really something I can rely on. For tier point purposes I now bear the exchange rate risk as well as a US based member.

If the thresholds weren't 20,000 and 52,000 I would have more confidence that it would all work out but it seems to have taken away the "something to aim for" aspect as it becomes guesswork.

Choice of meal?

Wait until you compare the Clubhouse to the Silver lounge, if you're talking about greener pastures!

If seats are persistently empty or filled with low-yield customers, BA would probably prefer to downgauge or reduce frequency or even destinations to reduce costs and increase average yield. Someone else in this thread already mentioned a possible plan for BA to shrink.

The question I have is why are you trying to rationalise this? As BA is disincentivising you to fly with them, then just go and move your spend elsewhere, and no longer deal with BA. In which case the success or failure of BA is of no consequence to you. Unless you are a large shareholder of IAG of course, in which case it would be fair to question the business merit of this decision. Otherwise you are just wasting energy trying to find reason in something, that you do not have the data to make any good conclusion about.

This is no different to when companies lay off employees, or if your client cancels their contract with you. You cannot take it personally, and you cannot spend all your energy trying to understand the why. You can of course trying to provide feedback, or ask for insight. However no one on this forum can give that insight. No one here has access to the relevant business data that would be required to understand this. Even if someone does have access, it's unlikely they are at liberty to share.

I don't want to get too far into the "you should target your high rollers" argument, but a couple of observations.

80/20 says you make 80 percent of your margin from 20% of your customers. The 20% for BA will not just be the high rollers. It's a thin skim. It will also include tens of thousands of mid rollers. It's quite probable BA has a pareto of these profiling them.

80/20 also says you aim to use 80% of your effort to serve the 20% bringing in the 80%, and you essentially minimise the 80% bringing you 20%.

It's a very easy conceptual rule for people to understand, particularly in the C-Suite.

The problem with 80/20 in reality is that the 80% of customers generated 20% of the margin, and you don't want to drop that. To grow, the first essential is not to contract. If you lose margin attributable to these people, which is easy to do as they will tend to be price and service level sensitive, you have a problem. BA are doing an amazing job alienating the lower end of their food chain by being impossible to deal with, complaints are ignored, refunds aren't made, the service is rubbish, unreliable, all of that stuff. BA do attract a lot of criticism in this segment. The great thing though about farming this segment if you do it right is that it's not granular. Lose one customer, it's no big deal, you get a sort of steady run-rate business. There are certainly things BA can do and appears to be attempting to improve the lot of this group, but sadly the consultants will be telling them to concentrate on the 20% with highest margin generation on the basis you get more bang for investment buck.

However.

The higher up you go in the customer value ranking, the less granular the business becomes, and that makes it fragile. Lose one of the larger customers and you could easily drop a significant bottom line percentage. These customers know they have leverage anyway and are often quite tricky to deal with.

BAEC did two things, I suspect effectively. The first one was to provide a lock into the moderately valuable segment in providing some perks that were valued and which people like having, which reduces churn and tends to direct choices to OW products. And the second was that it could then be left to do its own thing, confident in the knowledge that the push for status would drive enhanced margin business such as CE (there is no way CE has a value proposition in any rational world), it was very low maintenance.

I can fully accept the changes BA made to be revenue based, but the way this has been done is appallingly bad. It has created a large cohort of people in the top 20% (which is likely to encompass a lot of the GCHs etc) who are willing to jump ship at once and have lost trust in BA. Trust is like virginity, once it goes you can never get it back. And also it looks punitive. The thresholds probably look great on the pareto, but to someone who was Group 1 and is now going to be 4 5 or 6, it looks like a slap.

And the other thing is that it provides more ammunition to the bottom 20% who are looking for any bad news story about BA to reinforce their own negative viewpoint, regardless of the effect on them personally. So it destabilizes what was quite a decent self regulating system.

I personally think it's a dangerous lever for BA to pull as they have, but time will tell. There are probably IAG loyalty reasons why this was done relating to internal accounting, I suspect a great many BA managers hate the idea as I've said. If I were a top 5% customer I'd now be looking at getting further concessions. Ultimately it's happened, we can't change it, and as I've been saying, acceptance is the best strategy. No point arguing the whys and wherefores.

I'm still a bit surprised that for somewhere like SIN you wouldn't even have looked at SQ as an option before. I get that on many routes or routine trips where the alternatives are lacklustre then people would stick with what they know with BAEC benefits, but for expensive trips and/or routes where there are well-respected competitors, a sense check is generally a good idea.

Exactly, they've been purposefully putting up with what they perceive as a lesser product for status providing something they got anyway...

Where is the logic in that, bar the need to think you need it

Loads of people are going to get their heads above the BA waves all of a sudden and save themselves loads of money, pretty much doing exactly what they did before, simply in different coloured planes! I found it truly liberating when I gave it up 6-7 years back.

Perhaps you are making a point beyond my ability to grasp. But I find it difficult to understand in what possible way BA's new FFP might create new gold members - unless you see it as sufficiently attractive to attract high-flyers from other programme, or to current BA high-flyers who have been somehow put off the programme.. until now.

Eumh, I'm just contributing some thoughts, on a public forum. I assume it is still allowed to have opinions on things and share them on forums, which seem to exist precisely for that reason? I will indeed move away, in fact I am somewhat excited about trying out new things! Meanwhile, I am fascinated by how irrational business can be and am sharing my thoughts - you're free not to read them!

I am not taking anything personally, just contributing to the debate. And I have no expectation that there will be some magical insight coming my way...

Cases like this might have made me think that some loyal frequent flyers have just what they stuck to because of habit.

BA's changes to BAEC might be the breaking of the surface tension that gets people to change their habits dramatically - in the case you've quoted, a bigger propensity to try SQ or another non-OW product with First on it with its ancillary benefits.

There's an interesting MyLondon article about how a number of people who were forced to use the Elizabeth line in 2022 during a tube strike did not go back to their usual commute patterns after the strike, which also cited a 2015 seminar paper by researchers at Oxford and Cambridge (that was later published in 2017 in the Quarterly Journal of Economics - which is one of the highest-ranked economics academic journals around). Essentially, consumers will find better-off solutions when provided with an external encouragement to try (in this instance, the change of BAEC's tier point accural system). BA might not like the results of this experiment when oblivious people start to realise their product offering is highly unsatisfactory in today's competitive market.

IAG should shut down BA and open a chain of supermarkets.