British Airways Executive Club has made some major changes of late so we caught up with James Hillier, Global Executive Club Proposition Manager, for a brief interview.
InsideFlyer
Can you give us some background about the decision to introduce Avios points? What does the term “Avios” mean?
James Hillier
British Airways and Iberia merged to form the International Airlines Group (IAG) and AIRMILES is part of IAG. Having a new program and a shared global currency name means the benefits can be maximized across British Airways, Iberia and Airmiles, giving customers more choice, flexibility and better value across all three programs. The name Avios was devised by Interbrand, a leading branding agency; and we tested it extensively with customers in group sessions who reacted very positively to it in market testing. The name is simple to pronounce and evokes travel and flights in many languages. The brand name is also highly distinctive in a category where everyone talks about ‘miles’ and ‘points’; so it stands out as being different. As for the Executive Club, the last significant re-launch was in 2003. In October 2010, we made some major enhancements to the program through our joint business with American Airlines and Iberia and have continued to invest in the program throughout 2011 with the recent launch of our new reward currency (Avios). Now, we have taken another major step with the introduction of a new Bronze card/tier and a variety of other improvements including a new visual identity. We have listened to our customers, understand their changing and evolving needs and re-launched the Executive Club to signal the start of a new era in loyalty and brand engagement for British Airways, aimed at creating a greater sense of membership and emotional attachment to the Executive Club program.
IF
Why did you decide to introduce a Bronze level and why a lower level instead of adding a new top level?
Hillier
The most important reason for the introduction of the new tier came from listening to our Blue customers, who felt that we should offer more benefits on the way to achieving Silver status. Before we introduced this new Bronze tier, British Airways was the only oneworld airline without a ‘Ruby’ equivalent tier within its frequent flyer program. When we launched the joint business with American Airlines and Iberia in October 2010, we believed that the introduction of this tier was a key element of our joint business offering which would compliment the existing tiers within American Airlines and Iberia’s programs.
IF
British Airways is known for high fuel surcharges on award flights, so it’s good to see the changes to the program in the reduction in fees through the Reward Flight Saver. Are you considering a reduction in fuel surcharges on transatlantic and Pacific awards as well?
Hillier
We have no plans to make any further changes at this point.
IF
Can you explain a bit about how the new flight award charts are structured? What do members need to know before booking a stopover award?
Hillier
We have introduced a new method of how we price our rewards which is largely based on distance banding, where any destination you can fly to either on British Airways or a partner airline will fall into one of nine zones. Flights are now priced on a sector basis and the total Avios can be calculated by adding the price of each sector together. This is a fairer, more intuitive way to price rewards that our customers can easily understand how it works. We don’t charge any additional Avios for stopovers–the main change is that we now price on a sector by sector basis as opposed to the origin and destination. Our members can continue to book stopovers as before. In addition to this, we have introduced the ability to ‘spend’ Avios on hotels and car hire.
IF
Can you also please speak to BA’s decision to not publish the full award chart in advance so that members had a chance to book the award changes before they went into effect?
Hillier
Moving to a distance banded model meant that it was difficult to publish a single chart in advance, as the price could vary depending on where the journey started and finished, how many partners were involved and the routing. The majority of rewards booked by Executive Club members are on British Airways flights and we did publish the new zones with the relevant reward prices and cities in each zone to help our members compare the changes in reward pricing.
IF
Regarding the acquisition of bmi. Can you tell us if you plan to fold Diamond Club into Executive Club?
Hillier
You will have to ask IAG.
IF
On the BA website, it states “On 97 percent of our routes there will be either no change or the route will require even fewer Avios than the current BA miles.” But many more than 97 percent of awards are going up in miles–can you explain this discrepancy?
Hillier
The figure of 97 percent relates to direct British Airways routes. However, connections into Europe or onto long-haul flights with our partner airlines are excluded. So 73 percent of routes stay the same, 24 percent are cheaper, while just three per cent are more expensive.
IF
Anything you can share about what’s coming in 2012 for Executive Club?
Hillier
The Executive Club will always be evolving to meet the needs of its members and we will announce improvements in due course.
