British Airways, The Mileage Company and Chase Card Services recently announced new benefits to the British Airways Visa Signature Card offered to U.S. residents. The Mileage Company runs the loyalty program on behalf of British Airways and we were able to speak with Andrew Swaffield, Managing Director, The Mileage Company and Anthony Glover, General Manager of Partnerships for Chase Card Services about the enhancements to the card.
Can you give us a brief rundown of the new credit card benefits?
The partnership we have with Chase is an important one and enables members to earn miles with their everyday spend on their Visa card. We are delighted to announce a series of improvements to the generosity of the program. There are three main elements to the improvements: people can earn more miles–a 25 percent increase in the number of miles you can earn on everyday spending, 1.25 miles on anything and 2.5 miles spent on British Airways products. The new industry-leading companion redemption voucher, which enables people when they use miles to buy an award flight to get a second flight completely free, provided they have spent at least $30,000 per year on the card. This is a very exciting development for us and we know that our customers welcome it based on our research. And finally the increased generosity of the acquisition bonus–100,000 miles, provided people spend $2,000 in the first three months. So they get the first 50,000 miles straightaway after their first purchase and after they spend the $2,000 they get the second 50,000 miles. And 100,000 miles is enough for two roundtrip transcontinental award flights or four domestic roundtrip award flights.
What kind of research did you do?
We did a series of customer research over the last couple of years, since the recession has really begun to bite, both in the U.K. and in the U.S. We spent more and more time listening to customers, both through the traditional channels and also through comments posted on blogs and Web sites like FlyerTalk. People are saying that they are spending less because of the recession and they want to be able to earn more and have their spending more highly recognized. It’s a very common message that we are getting consistently from consumers in the U.S., telling us that they are really expecting us to help them through this period and give them something back because they aren’t able to spend more. It’s a very difficult market for people.
Why is the 100,000-mile sign-up bonus being rolled out for current U.S. British Airways Executive Club members first?
That’s a relatively normal thing you’ll see in a number of cases where we’ll do direct communication and emails to our existing base and then we’ll offer that in the middle of the month to everyone more broadly, so you’ll see it on ba.com and other media. We are communicating to our existing Executive Club cardmembers first.
What is the annual fee for the card? Is the first year waived?
The annual fee is $75 and the fee is not waived for the first year. We have some ongoing benefits that continue as well with the card. There is very strong underlying value to the card in addition to the incremental value we are adding. For instance, anyone who purchases a British Airways ticket using their co-branded card will receive $50 off the purchase price of that ticket [through Dec. 31, 2009].There’s also a buy one, get one free element where if you purchase a full-fare ticket using your British Airways co-brand card, you’re able to get another ticket free. We think there is a lot of value in this card and our customers and consumers have told us it’s well worth the $75.
Why did you decide to add the annual companion award ticket benefit to the card?
Learning from our experiences around the world in other markets where this has been very successful and listening to customers telling us that this is one of the things they value. And we’ve had consistent feedback from our base here that this is something they would like. It’s worked well in the U.K. and we think it will be very popular here in the U.S.
We’ve heard this card called the “far-and-away the most rewarding U.S. credit card” for those who spend $30,000 per year. What sets this card apart from the rest for those who don’t meet the 30K spending threshold?
The only thing you would not receive if you don’t spend the $30,000 is the companion award voucher. The 25 percent mileage bonus is something you would still receive so the 1.25 miles for general purpose spending and 2.5 miles on BA spend. You would still receive the $50 off every British Airways ticket bought with the card [through Dec. 31, 2009], the buy one get one free full-fare ticket and all of the other benefits of the card.
The 1.25 earn rate is very generous in its own right. We are making sure that for the entry-level customer and for those who won’t spend $30,000, the card is extremely competitive