BA Miles to be devalued

[radiosutch]

An insider told me that an announcement will be made at the end of the year that BA miles will be devalued.
This might be an across the board % reduction and or a time limit to spend them.
Times is hard at BA so they think pi****g off the Executive Club loyal customers is the way to go. Way to go Willie....

[eliptic]

KLM/AF did the same from April 2009 on the FF (FB) program. No value to be a FB anymore.

Better trow the loyalty out the door, buy a lounge card and take the best priced/value tickets instead= much better and cheaper then the "award hunting"

[Capetonian]

I am convinced that the good old South African governemt (pre-1994) had a 'Ministry of Bad Timing' which determined the worst possible time for any announcement or policy change.

I often wondered what happened to those people, obviously they are now working for Willie W.

BA P***ed me off long ago to the extent that I hope never to fly with them again, even though I have miles left over.

On the other hand this might just be a rumour without substance.

[manintheback]

BA mess about with the exec club from time to time, invariably for the worse. Biggest own goal was under Eddington. The really heavy flyers in the club got a free silver card for the spouse - that benefit was withdrawn

Result - other halves all flew with best value/most conveniant airline instead of BA end of. Excellent marketing move as it ensured wives/hubbies occasionally flew the opposition and got to compare the product - all for the price of a coffee, biscuit and a chair in the exec lounge for an hour.

You couldnt make it up

[Ancient Observer]

BA made a promise to a group of business travellers that had held gold cards for some time. It was that after X years, (I think it was 5) of holding a gold card earnt by travelling with BA, they could have a permanent Silver card.
Surprise, surprise, they refused to honour that. Therefore, lots of prople who had used BA for rather a lot of flights suddenly found that BA told terminological inexactitudes and had become thoroughly dishonourable.
As a previous poster said, as an anti-marketing device, you couldn't make it up.

[backseatjock]

Became convinced some time back that BA policy towards Gold card holders was based on a belief that as they were all regular travellers on the airline anyway, it could treat them how it wanted.

One thing will be for sure. Any change to Exec Club benefits will probably favour the airline more than the Gold card holder, however it is dressed up.

Shame really as I have a number of friends who fly for BA as both flight deck and cabin crew. They are just as frustrated at the way bean counters are ruining this once excellent airline, as anyone else :ugh: Rant over.

[Final 3 Greens]

this once excellent airline

Thats the real tragedy, it was an excellent airline.

[Haven't a clue]

I was a Gold Card holder for some 15 years. Now I'm silver, and most of the renewal has been down to Dragonair sectors (whose Business Class product is wonderful, by the way).

Does anyone at BA care? Not as far as I can see, because no one has bothered to contact me to ask why I'm no longer the frequent BA flyer I once was. And I'm not really surprised.

[Midland Transport]

I have 500,000 miles and can never ever use them. As an ex BA Black Card holder I became so p....d off with the inflexible Air Miles programme that requires you to book so far in advance that I siwtched to an airline that cares and its executive programme is outstanding. Virgin Atlantic. BA are determined to loose their most valued customers.

[backseatjock]

Fully endorse the positive VS comments above and have similar positive experiences with an airline that many BA staff still laugh at. It's about time someone looked at the Flying Club mileage benefits, quality of lounge product, limo service, complaint handling, in flight entertainment system, general ambience and crew attitude, proper fastrack security at LHR and priority bag delivery whether on outbound or inbound flights. Maybe start to question whether BA could be learning something from this.

It was my birthday last week. A birthday card from VS Flying Club with the offer of some celebratory miles for my account. A little touch, perhaps, but the sort of thing that people remember. Never, in 10+ years of BA Gold membership, have I had anything similar.

My travel with BA has dropped off dramatically in recent years as I have also switched to VS on routes where there is a choice. And yet none of the BA marketeers seems to have noticed that a very frequent flyer is now a far less regular traveller and thought to contact me to ask the reason why.

[PAXboy]

Haven't a clueDoes anyone at BA care? Not as far as I can see, because no one has bothered to contact me to ask why I'm no longer the frequent BA flyer I once was. And I'm not really surprised.

backseatjockAnd yet none of the BA marketeers seems to have noticed that a very frequent flyer is now a far less regular traveller and thought to contact me to ask the reason why.
My guess is this: They can't ask you the question - because they do not have the staff. Of course, they might not want to ask the question and their mgmt might not want to ask etc. there are many possibles.

From observation of BA and 30 years of modern so called mgmt, I suggest that the Mileage system will have been computerised to reduce it's costs and the staff looking after it are minders. The problem is almost certainly top down and is typical of old thinking. Don't forget that, in 25 years time PPRuNErs will be criticising VS for their old thinking and praising some new carrier ... but for now? BA are in their end game.

[Scumbag O'Riley]

I have 500,000 miles and can never ever use themThey are getting useful for last minute flights within Europe. Just rough figures, so don't try and pick them too pieces because if you do you are missing my point, but when booking a week in advance..... Loco might be after £125 one way and BA £200 one way. However you still find good availability when using BA miles, and they still stick it to you with their deceptive fuel surcharge, but total cash price for late bookings now tends to be less than the locos.

Never used to be like that, but the BA fuel surcharge is dropping and the LoCos are getting more expensive. .

And as for why they never contact frequent fliers, probably because they have already decided exactly what you want. They will probably also tell you that devaluing miles is what the customer wanted and they will have a specially designed questionairre to prove it.

[CHIVILCOY]

I have 500,000 miles and can never ever use them.

I would have no trouble using them.

How can you not use them? BA redemptions are always pretty easy to get as long as you plan properly. Of course there are always some routes which are harder than others during school holidays etc;

As for the devaluation rumour - very unlikely.

[Scumbag O'Riley]

Depends what you mean by 'devalue'. They (together with other airlines) have a track record of devaluing miles, though the last time BA did this sort of thing a few years back they called it an 'enhancement'. An enhancement to them, a devaluation to their customers.

Do non-redeemed frequent flier miles sit on their balance sheet as a liability? Their balance sheet is truly dreadful right now, probably technically insolvent if you properly value their pension fund liabilities, from an accounting point of view it might make sense to devalue the miles.

[dubh12000]

I wish I could use them to book a real "free" flight like I can wish my Swiss Miles & More....i.e. also cover the taxes.

[manintheback]

Looking at BAs financial news today and losses, I rather suspect Paxboy may be right as to BAs demise. And that will really devalue those miles - by about 100%

[PAXboy]

To clarify, I don't think BA is closing now and would hesitate to put a time on it other than to say that, if they are still here in their present form in 10 years (max) then I would be surprised.

Likewise Microsoft. BA rose slow and will close slow, M'soft rose fast and will close fast. Some companies/people/countries/political parties buck the trend but very few.

[Captivep]

I've never had any problems using my BA miles and am off to Miami in October in Business Class thanks to them.

Also had a very nice letter from BA a couple of years when, after several years in Silver, I was due to drop down to Blue; instead, BA let me have another year in Silver as recognition of all the years I'd been a customer.

[CHIVILCOY]

Looking at BAs financial news today and losses, I rather suspect Paxboy may be right as to BAs demise. And that will really devalue those miles - by about 100%

Absolute hysterical nonsense. :rolleyes:

[Final 3 Greens]

Absolute hysterical nonsense.

Absolute hysterical post.

Neither manintheback nor Paxboy have said this will happen in a particular time frame.

In my opinion, Paxboy's view (which he has expressed for quite a while) is realistic.

[CHIVILCOY]

Absolute hysterical post.

Neither manintheback nor Paxboy have said this will happen in a particular time frame.

In my opinion, Paxboy's view (which he has expressed for quite a while) is realistic.

Well if you think BAs demise will happen in 10 years time you had better add KLM AF LH QF and several more to suffer the same fate.
Never read so much utter tosh in all my life.

[13Alpha]

Well if you think BAs demise will happen in 10 years time you had better add KLM AF LH QF and several more to suffer the same fate.
Never read so much utter tosh in all my life.

There was a time when people saying Swissair disappearing was unthinkable. Or Pan Am. Those of you with long memories or a better knowledge of aviation history can probably think of plenty of other examples.

No company has a God-given right to exist. And to stay in existence it isn't enough to keep doing what you're doing today. Circumstances change and big companies which don't keep reinventing themselves inevitably die. Nokia, the mobile phone giant, used to be primarily a rubber company. Without the vision of its senior management in the early 70s, it might not exist now, or be stuck in a shrinking market.

I'm not saying BA needs to pack in aviation and do something else to survive, but it DOES need to radically change its culture, organisation, management, working practices and attitude to its customers if it's going to still be around in anything like its current form in 10 years from now.

13Alpha

[custardpsc]

13Alpha, what you say is exactly right. BA need to compete and lead the way for full service carriers to find ways to be profitable without loosing the pax that they already have. The LCCs have taken a load of pax, sure, but aren't they the the ones with shallow pockets? No one has asked me ever if I prefer a cheap flight or a quality flight, but I vote with my personal and work chequebook and keep flying with them whilst they remain some semblance of ' full service'.

That policy has been eroded of late. I changed to Austrian for 20 x full fare returns partly because of the route/times but also a big factor was a hot breakfast and hot dinner in economy and as much wine as you can drink (for dinner i hasten to add). You may have seen the thread about BA scrapping sandwiches. Anyone who flies more than once a week knows the BA sandwich offer by heart and doesn't bother. Thats why they are scrapping them. Anyone who flies more than once a week probably has some need to eat on the aircraft as time constraints of business trips rarely allow for dining. More lost BA business due to poor decisons about service levels and poor understanding of loyal customers real needs.

Same applies to miles. If BA decide to devalue my 1.3M mile current balance they really can kiss me good bye. I fly with them out of loyalty as much as anything, there are other full service airlines that are hungry for business and have more generous upgrade and mileage programs. Taking away or reducing the only kickback we do still have for loyalty will be the last straw for me. If they had any sense they'd be offering more miles and or other incentives to retain and compete for customers..

my 2c anyway - anyone else feel the same?

[backseatjock]

Here, here. I'm with you on most of that Custard. And has anyone visited the 'club kitchen' recently? Another good idea, poorly executed as a result of a rundown of items in the larder, after a fanfare launch. There is literally almost nothing to 'raid' these days.

[JayPee28bpr]

Just to put the debate on BA Miles/food etc into some context, it might be insteresting to consider the following. Over the last 2-3 quarters the full service airlines have announced many things in common, including:

Large falls in passenger numbers
Reduced yields on those still flying (ie loss of premium business)
Lower fares (eg 50% cuts on transatlantic premium fares)
Cash raisings from investors (eg AF and BA both making convertible bond issues, BA deferring funding its pension deficit)
Falling cash balances ("cash burn" has become the main metric by which full servicee carriers have been valued recently)Compare the above with the LoCos, Ryanair in particular. Ryanair's passenger numbers are up every quarter. It has remained profitable at the operational level throughout the downturn (any losses are down to provisions against its investment in Aer Lingus). Its cash balances are actually up over the last 2 quarters with no recourse to investors. It has a cash balance that comfortable surpasses the likes of BA. In fact it has enough "ready cash" to buy BA at current valuations.

What does all this tell us about the future structure of the airline business? Quite simply that the LoCo model is the only way to earn a return from the business. Passengers accept it. Note I don't say "like" it. However, many people see air travel, certainly short haul, as no different to getting on a bus every day, and most of us moan about that all the time too.

The only way for BA etc to compete is to emulate the operating efficiencies of the LoCos. That means things like reducing on board catering which is expensive to provide and hence simply requires higher fares. The real cost of on board catering to airlines is the extra time required to clear up/restock between flights, and the real operational efficiency that the LoCos have is fast turnarounds, which equals more time in the air, earning revenue, for the planes. Full service carriers need to be flying as many sectors/day as the LoCos. At the moment they are about 30% lower from what I can gather.

A number of people above have commented that they won't fly BA because they don't get dinner etc on board anymore, or they're going to lose their BA Miles etc. Do you think BA care? I can assure you they don't. Why? Because they know that every other full service carrier is making the same cuts. Within 2 years, no airline will be providing "free" food/drink on short haul flights. It simply isn't a valuable product differentiator anymore.

The same with loyalty programs. Most people realise these are a con anyway. You pay over-the-odds in order to build up entitlement to "free" flights, which you can hardly ever use to get seats on flights you really want. Why not just charge lower fares in the first place, and then passengers can use the money saved to buy a similarly low-price ticket to wherever they want to go with no artificial availability restrictions? Passengers are motivated by a mixture of convenience (departure/arrival times, distance/ease of reaching ultimate destination), and price. Nothing else matters. Finally, the likes of BA are realising this as increased price sensitivity caused by the economic situation forces them into a very fundamental review of their structure and operations.

[Final 3 Greens]

What does all this tell us about the future structure of the airline business? Quite simply that the LoCo model is the only way to earn a return from the business.

With the very greatest of respect, I don't think your assertion is right.

Ryanair has grabbed the loco, cost differentiated opportunity in Europe and that's why the company is so successful, with very focused and relentless senior management keeping it on track.

No one else can now do what Ryanair has achieved, that space is taken.

So it is a question of understanding and taking a different strategic market position or finding a niche where others cannot easily compete. (or having backers with enormous pockets who, for vanity or strategic reasons, are prepared to bank roll the business.)

BA's problem , in myopinion, is a combination of hopeless collective agreements defended by people who don't seem to recognise the implications (BA pilots honourably excluded from this category, by their collaborative approach to negotiating), combined with a contradictory and changing melange of fragments of market positioning.

If you don't stand for something, you'll fall for anything - what is BA's mission these days?

[JayPee28bpr]

No one else can now do what Ryanair has achieved, that space is taken.



EasyJet report remarkably similar results to Ryanair: increased passenger numbers in 1H:09, increased revenue per seat, increased margin ex fuel costs, forecasting full year profitability. Since Alitalia cut lots of flights from Milan, EasyJet has moved 14 planes (from 3 to 17) and based them there. Presumably they're getting adequate loads.

I stand by my assertion that what the economic crisis has done is simply accelerate changes taking place in the airline industry already. BA is changing to meet the new environment. Everything WW is doing has one simple aim: squeeze more flights per day out of every plane.

[Ancient Observer]

In response to the recent posts about the sector, but well away from the thread topic, the CAA's economists published 2 reports about 2 years ago that clarify where Ryan/EZY are in the market.
They have captured a segment, that's all. That segment has been the growth segment, that full-service and charter airlines expected as theirs.
In summary, the lo-cost lot have captured the growth. Full service has not had any growth. Charter has lost out big time.

As an aside, the CAA added that even tho' the Scottish Government of the UK believed that RYR/EZY were allowing the working class to fly, what was actually happening was that the middle classes were taking 3 or 4 holidays per year rather than 1 or 2.

[Final 3 Greens]

JayPee28bpr

I don't see FR and U2 being in the same market segment (although if one defines 'growth' as a segment, then I understand Ancient Observer's comments.)

There are surface similarities, but the underlying business models seem to be different to me.

U2 often competes directly with traditional airlines, Ryanair seldom does and is very clever at creating new market demand, e.g. those extra middle class flights, often to out of the way destinations servicing second homes.

Cost drives everything at FR, whilst there seems to be more of a trade off with cost/service/yields at U2, although I am sharing my perceptions, not facts.

If you do a 'Four Routes to Market' analysis, the two companies appear in different quadrants.

[PAXboy]

CHIVILCOYWell if you think BAs demise will happen in 10 years time you had better add KLM AF LH QF and several more to suffer the same fate. Never read so much utter tosh in all my life.You obviously read my post very carefully. What I actually said was:

To clarify, I don't think BA is closing now and would hesitate to put a time on it other than to say that, if they are still here in their present form in 10 years (max) then I would be surprised.

I did not say that they WOULD go but the statistics and history are against them. And I am happy to add that KLM/AF, LH, QF are in a similar boat. Note I say similar.
KLM/AF have already bitten the bullet and can merge if they need to and there is loads of fat yet to be stripped out. Many thousands of jobs and buildings can go to boost them, whereas BA has done most of that.
LH has the advantage that the German economy is, essentially, stronger than the UK one. Their pax are certainly glad to have some lower fare options but do not yet NEED them the way that the Brits do. The German economy is probably 20 or so years behind us - which is a good thing. They still have manufacturing and things like car development that is world beating - so until that and other industries slide away, they can support more full fare carriers. I would invest in LH but not BA.
QF. I do not know Australia and their markets, so cannot comment.BA have done FANTASTICALLY well and all credit to WW and previous CEOs who have slimmed down the airline. The problem is that they are still clinging to some of the SH market and they really need to lose this. The long haul is where premium pax are still readily available and will continue to be so. There have been countless gripes in PPRuNe about them becoming 'London Airways' and I have always said that it was the only logical move. I think that they SHOULD just be long haul (BOAC) because the BEA market has gone to lo-co and is not coming back.

As F3G says, there will be a small market for premium cabins in Europe but BA does not stand much chance of holding on to it. They either give full service or they don't. Since they are trying to have the best of both worlds - they are falling through the middle and the old adage 'death by a thousand cuts' is going to play out. Take the Malta/GB thing that F3G mentions today. They wanted the market, so took the logical step of elbowing out GB and then failed to deliver, now they are cutting a loss making route. That story is repeated by many old companies - not just BA.

BA tried very hard to make a partnership deal with AA and others, the reasons for those failures are a matter of conjecture, all I can say is that the failure has condemned them to the ultimate failure. If they wanted to keep their jobs and paying dividends - they should have made a deal. So, CHIVILCOY, I repeat that, if BA is around in it's present form in ten years (max) then I would be surprised.