Iberia pivots to revenue-based loyalty; British Airways to follow

Iberia will shift to a revenue-based earning scheme for its loyalty program at the end of November. The move will only affect earning of Avios for reward travel in the Iberia Plus program, not qualification for elite status. And British Airways will soon follow.

From the end of November members will earn 5-8 points per euro spent, depending on their Iberia Plus elite status. The earning excludes “taxes, fees and charges” which could skew the program even more than the overall shift.

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Silvia Morán, Director of Customer Commitment, describes the new plan as “a fairer and more transparent way of rewarding our loyal customers.” It is unclear, however, what was unfair or opaque about the old program.

Like most transitions to revenue-based accrual, the change will benefit travelers purchasing higher short-haul fares and leave those typically buying cheap seats less rewarded. Then again, with earnings on lower fares already notably lower – some down to 0.25 points per mile flown – the shift here may not affect as many passengers as when other programs made the change.

Iberia highlights the opportunity to reward members for purchases of ancillary products, such as baggage or seat assignments. Making those ancillary fees points-earning is a nice benefit, but ignores the part where they used to not cost anything at all. The reward is somewhat less than stellar in that context.

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Also unclear is how Iberia will treat fuel surcharges for earning. US programs, for example, including those in earnings as they are airline-controlled fees. But in most cases the US airlines also don’t charge them for reward travel; European airlines do. It would not be entirely surprising – though it would be disappointing – to see Iberia choose to exempt earning on that portion of the ticket cost, rather than just government-imposed fees.

Ian Romanis, Head of Retail and Customer Relationship Management at British Airways, notes that his airline will follow next year, “We congratulate our colleagues at Iberia for introducing this change and we look forward to joining them in 2023.”