British Airways Gives Executive Club A Facelift

British Airways Gives Executive Club A Facelift

In an effort to simplify and improve the Executive Club program, British Airways has announced sweeping global changes. Prior to this initiative, Executive Club was one of the most complicated programs in the world. Over 22,000 different rules governed five regional programs.

“We actually had our staff in an almost impossible position where they couldn’t understand the program; they couldn’t explain even the most fundamental questions to our members because it depended on where the member was from, what their rules were and where they were flying to,” said Chris Jansen, Director of Global Marketing at BA. “So now, we’ve got one global program, and one global training program for our staff.”

Jansen says that the new, unified Executive Club is “aimed to take the best parts from all the current regional programs, and to try to (provide) more differentiation based on member value.”

Enough marketing-speak. What are the changes?

Exclusivity: Joining Executive Club won’t be a simple matter of a few mouse clicks anymore. Beginning on July 1, potential members will need to fly a Y, V, H or premium-class fare (or own and use a BA co-branded credit card) to be eligible to join. Current members will be “grandfathered” in, however, and will remain members as long as they earn miles within 36 months of their last activity. That 36-month “expiration” period, familiar to U.S. members, will become the standard globally.

Tier Status: Tier status is also undergoing some changes. On July 1, members will need 600 points to qualify for Silver and 1,500 points to qualify for Gold. That’s a significant drop from the current 700 and 1,700 point levels. The flip side (you knew it was coming) is that current elite members who wish to re-qualify will need to meet these new levels, rather than the current 500- and 1,200-point renewal levels. Anticipating criticism, Jansen said that he hopes “members will find the tier threshold changes acceptable, but they will want time.” To that end, BA is honoring the current renewal levels for another 12 months.

Earning: In a perfect example of the differences that existed before this change, UK members had no tier bonuses — something nearly unheard of in the Americas. Some of that disadvantage was made up by generous cabin bonuses though — a Club World flight earned a 100-percent mileage bonus, for example.

Now, BA is meeting in the middle. As of July 1, Silver members will earn a 25-percent bonus and Gold members a 50-percent bonus, while the Club World cabin bonus will become 50 percent globally.

The bad news? Well, if you’re watching your wallet, note that discount economy fares will only earn 25 percent of mileage flown. This may be a shock to U.S. members — after all, the land of the free has always been the home of full mileage on cheap flights. To international members, however, this is nothing terribly new.

Upgrades: Miles for upgrades on BA was something that only existed in the colonies. Beginning July 1, all members globally will be able to use miles for a one-class upgrade on full-fare tickets booked directly through BA. All members will also have the One-Way Upgrade option, which, as the name suggests, allows an upgrade for half the miles required for a roundtrip upgrade.

Part Cash Part Miles: A new, and permanent addition to the program is the introduction of an option that will allow members who may be short on an award to top off with cash.

Online Capability: At the heart of these changes is BA’s IT capabilities — over the past 12 months, BA has devoted roughly 50 man-years to upgrading its system. So along with the changes to its program, you’ll see improvements in its Web presence — including online award redemption (even with partners), upgrade vouchers available online and a radical increase in the speed of redemptions. The current 10-14 day waiting period will drop to a mere three days.

Householding: Again, this is already familiar to North American members. Beginning in July, all members worldwide will be able to have up to seven members from the same household pool their miles into a single account. This is up from the current four-person limit in North America.

Award Levels: Discarding the potentially confusing peak and off-peak awards, BA will be offering one 50,000-mile award from North America to Europe — an increase of 10,000 miles for off-peak awards, but a decrease of 10,000 miles for peak awards.

What’s the impact on you? That depends on your perspective. Several North American members have already begun to voice their displeasure at the changes. Said one such angry member: “Could this be the nail in the coffin for those of us who try to remain loyal?”

Indeed, the tenor of our readership is decidedly anti-change. The increase in award levels is viewed as a devaluation of miles, and the reduction of mileage earning in discount economy is seen as a slap in the face to cost-conscious flyers.

Again, though, it should be stressed that British Airways is not a U.S. carrier. Executive Club is a global program, and since almost all international programs limit mileage earned on cheap fares, it would have been abnormal for BA not to follow suit.

Jansen estimates that, worldwide, 80 percent of current members will see their level of benefits stay the same or actually increase.

These moves have been carefully designed to retain the true “loyalty” flavor that Executive Club was originally designed to promote. And unlike many U.S. carriers, BA is not pursuing loyalty based on price alone. Though it continues to battle RyanAir and EasyJet on the bottom line, BA has clearly refocused its frequent flyer energies on rewarding higher-end spenders. British Airways has our blessings to continue as a true loyalty program, rather than become a “travel rewards program” for just about everyone else’s customers.

The overall effect — still a great loyalty program for a global airline. The most interesting thing we find: they have decided not to move down to the level of price-conscious passengers flying EasyJet or RyanAir, but rather have decided to stay with what they know — premium services for premium members.

For more information, visit BA online at http://www.britishairways.com/executiveclubchanges.

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