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Share Price: 457.50
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Business class you win, economy you lose: BA faces backlash over points changes

Thu, 29th Jan 2015 14:29

LONDON/BERLIN, Jan 29 (Reuters) - British Airways is facinga backlash from customers after making changes to the waypassengers can earn and spend miles under its Avios frequentflyer programme, with some threatening to switch to rivalairlines such as Virgin Atlantic, Ryanair and easyJet.

Following the example of U.S. carriers, British Airways,owned by IAG, is tying the number of points awarded topricing tiers within cabins, rather than the number of milesflown.

Those paying for fully-flexible first-class and businesstickets will earn more points under the new scheme, whileeconomy class passengers buying the cheapest, non-flexible,fares will see the number of points they earn slashed to aquarter of previous levels.

That prompted howls of protest on Twitter, with somethreatening to dump British Airways and switch allegiance.

"@Virgin Atlantic, you single?," one twitter user,@AimeeColleen, asked after the changes.

"It just makes me want to fly with the low cost companies,"another user, @Virginia_Bag tweeted.

RBC analyst Damian Brewer said it was a brave move thatcould pay off financially for IAG, but could also push somecustomers to budget rivals easyJet and Ryanair on short-haul routes.

"We think that overall this is likely a net positive ashigher ticket spend is encouraged," he wrote in a note toclients.

This is not the first time changes to points gathering andspending has stirred debate in the industry. In the UnitedStates, United, Delta and Southwest haveall altered programmes in recent years to base points earned ondollars spent, drawing ire from travellers on social media.

In Europe, one German passenger even took Lufthansa to court after the airline abruptly changed the numberof miles required to get a free business or first class flight.A court sided with Lufthansa in 2013, but the airline said as acompromise it would give three months' notice of any changes toits Miles & More conditions.

In response to the social media criticism, British Airwayshighlighted on Thursday that the changes would also make iteasier to book a flight using Avios points. A lack of availablereward flights is a common complaint among users of airlineloyalty schemes.

"We believe those that spend the most on flexible ticketsshould see the greatest rewards," the British Airways spokesmanadded. (Reporting by Victoria Bryan and Paul Sandle; Editing by MarkPotter)

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