Last night I wrote that Iberia made major changes to its award chart.
They created a separate award chart for partner airlines, such as oneworld members (and joint venture partners) American and US Airways.
That’s a big deal because their program used to be more aligned with British Airways’, a way to buy cheap non-stop short haul flights. Iberia and British Airways are jointly owned by the same company (IAG).
You can even transfer points between British Airways and Iberia accounts, provided the accounts have been open 90 days and have both had points activity in them. That means if you don’t like one award chart, you can move points over to the other program.
And it led to speculation, could British Airways be poised to make similar moves?
Both Dan’s Deals and Matthew Klint aren’t especially concerned.
Dan’s title suggests the Iberia changes are ‘Much Ado About Nothing’ and I disagree.
That said, Dan offers a conclusion that I do agree with.
I don’t think that the Iberia changes prove that imminent changes are inevitable, nor am I running to burn my stash of 500K
I don’t think that the Iberia changes prove that imminent changes at BA are inevitable either.
As I wrote,
If Iberia is going this route, is co-owned British Airways likely to follow? I do not know the answer to this. I have decent contacts with several airlines — British Airways isn’t one of them.
I certainly do not think it is inevitable.
But the change at Iberia is suggestive of concern for British Airways.
- I wouldn’t be making speculative bookings with British Airways points (especially since they’ve imposed tougher change fees than in the past)
- I would, however, make any bookings one has intended but perhaps been putting off.
I’m also a little less bullish on British Airways points than before.
In general the best values are unsustainable over time. If something is order of magnitude better than what other programs offer, you can expect it to go away.
Will this one go away now? Who knows. But the big deal here is that Iberia, jointly owned with British Airways by IAG, made this huge change without notice and there’s no doubt consideration and discussions over at BA about how they’ll go forward as well.
Dan says he thinks I should have been clearer in my post — and so I’m posting this followup.
I’m not persuaded by his arguments like,
Nor does Iberia try to foster point selling relationships with Chase and SPG like British Airways has done to create a program that more Americans earn and burn in.
After all, Iberia is an American Express Membership Rewards points transfer partner.
But in general neither Iberia nor British Airways are primarily catering to the US market and aren’t trying to retain value for US consumers.
When British Airways devalued their program in November 2011 they did so without advance notice of the details of their new award chart. They promised that 98% of awards would either get less expensive or stay the same. What they meant was for members residing in the U.K..
The two programs are run separately, but they began with nearly identical structures in November 2011. They’ve made their own tweaks since then, nothing as big as what Iberia did this month. And the ability to transfer points is an ‘out’ that makes it hard to sustain the changes for folks ‘in the know’.
Either the bet is that too few folks can actually learn about the ability to transfer points. Or that British Airways will have to follow. Or the ability to transfer points at will ends. We don’t know which of course.
What we know is that Iberia gutted its program for booking short haul partner awards.
What we don’t know is what jointly-owned points transfer program, British Airways, which has a similar structure will do. Iberia’s change raises questions, it does not give us answers.
My bet is that the 4500 point award for flights under 650 miles won’t be sustainable. I use it frequently for $650 roundtrips. That’s too good a deal to last, and history shows good deals don’t. Although that doesn’t mean it’ll go away now.
For what it’s worth, here’s what British Airways tweeted.
That strikes me as a ‘non-denial denial’ — I read nothing into it, either way. Some see this as saying there will be no change. But I see it as referring to (a) the present tense (we know no change has been made yet!) and (b) a statement of the current knowledge of the twitter team, which is hardly confidence-inspiring.
I am less bullish on the accrual side of British Airways points than I was. But I am not claiming I have special knowledge of what will happen — although I am flagging a data point suggesting what could happen.
Sorry I don’t have anything more satisfying, one way or the other!
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[…] Following up on my last post, a British Airways apocalypse may actually not be imminent. Commenter Prospero on Gary’s blog wrote, […]