Avios – the new single currency for IAG
For those of you that look to British Airways for innovation you’ll no doubt have been following the introduction of their new single mileage currency. Avios is the name of the currency that will be offered not just to frequent flyers of British Airways but also those of Iberia.
The move to a single currency for both companies is not a surprise given that the parent entity of both carriers, International Airline Group, is intent on buying other airlines. TAP is already in the frame and Aer Lingus has also been mentioned as a potential target (although a bit like BA has been described in the past, they are also being called a pension deficit with wings.) To be able to add all these companies in and manage it successfully, then a single currency helps on the FFP side of things.
At the moment, there doesn’t appear to be a single FFP program – like UA and CO has done – on offer, just a single currency. Although BA has not announced all the changes that are coming and time will tell what those are.
AirMiles name disappearing in the UK?
Avios is also the currency that will be offered to collectors of AirMiles in the UK. This coalition program has the same brand name as the schemes in Canada and the Middle East and those companies all franchise the name.
There has been a lot of negative feedback in the UK about the AirMiles to Avios changes. Currently, when you redeem for an AirMiles flight, the taxes, fees and charges are all included. In the new Avios scheme that will not be the case and this has stirred up controversy. Interestingly enough that was the way it used to be with AirMiles before they changed it to be all inclusive.
However, in midst of all this discussion, very few people have commented about the business rational behind ditching 20 years of brand investment in the AirMiles name. BA bought AirMiles (in the UK) in the early ’90′s and since then it has grown and developed into a program with multiple partners and millions of active collectors. So why would you want to change a consumer coalition program with all that brand equity and mix the reward currency with that of Frequent Flyer program?
Maybe it’s because the AirMiles trademark is owned by your arch rival Groupe Aeroplan? Or maybe that Nectar (also owned by Groupe Aeroplan) has managed in many ways to outpace AirMiles in the UK. For example, with its supermarket partner Sainsburys, Nectar Points are their currency, but for AirMiles’ partner, Tesco still award Clubcard points (which you then subsequently have to choose to convert to AirMiles.) On top of that, AirMiles has a stronger flight redemption offer but Nectar has still managed to grab some 18 million collectors – considerably more than their rivals.
Nectar has also been more active in expansion – with both “Nectar for Business” in the UK and also Nectar Italia – something that would be hard under the old AirMiles set up for them to contemplate. However, coalition schemes aren’t guaranteed to be successful – for a myriad of reasons they aren’t for example, big in the US and other key markets.
As ever with business decisions without public information, one can only speculate to the reasons. Perhaps, the owner of the trademark was not willing to renew the deal? So maybe it is not yet adios to AirMiles if the holder of the master trademark sell the rights to another company for the UK? Only time will tell.