Simon Calder: 'Free' flights that now cost a small fortune
The man who pays his way
Simon Calder is Travel Editor at Large for The Independent, writing a weekly column, various articles and features as well as filming a weekly video diary. Every Sunday afternoon, Simon presents the UK's only radio travel phone-in programme called The LBC Travel Show with Simon Calder (97.3 FM). He is a regular guest on national TV, often seen on BBC Breakfast, Daybreak, ITV News and Sky News. He is often interviewed on BBC Radio, particularly for BBC Radio 4’s You & Yours programme and BBC Five Live.
Saturday 03 September 2011
Airmiles was born in 1988, the offspring of an ambitious and newly privatised British Airways. The reward scheme was a brilliant twist on the "frequent flyer" schemes of other airlines: it offloaded surplus seats not to BA's existing loyal customers, but to a much wider population.
In return for spending money at the right supermarket or service station, or with the right credit card, prospective travellers could accumulate points to buy BA flights – which the airline knew would otherwise depart with empty seats.
Financially, it was an appetising prospect. The merchant bought each Airmile from BA for about 15p each (the exact amount varied, and has always been a closely-ish guarded secret). At the time, the cheapest fare from Heathrow to Amsterdam or Paris was about £100 return. Either destination "cost" 450 Airmiles. Relative to the fare, each point was worth 22p.
Using Airmiles to reach destinations outside Europe was unwise, since with long-haul flights the effective value of each point dwindled to a few pence.
Today, the "fare" to Amsterdam or Paris is 750 Airmiles – a rate of inflation of 2.2 per cent over the years . Not bad, considering the introduction of Air Passenger Duty (currently £12), higher airport fees and the soaring cost of fuel. Uncannily, air fares on the BA run to the French or Dutch capital are pretty much the same as they were at the dawn of time, or at least Airmiles: £100. As a result, each Airmile is now worth around 13p.
From 16 November, your Airmiles holding will multiply by 10 – and instantly lose value. On that date, Airmiles will be converted to a new currency, the "Avios", at a rate of 1:10. My accumulated 3,000 Airmiles – which currently could buy four tickets to Amsterdam – will become 30,000 Avios. That translates as just three tickets, and I must also stump up an extra £267 in cash.
Henceforth Avios will demand that travellers pay some or all of "airport departure tax, customs fines, immigration fees, airport charges, customer user fees, fuel surcharges, agricultural inspection fees, security and insurance surcharges". More regular collectors than me – anyone who has earned points in the past year – will qualify for a "reward flight saver" that amounts to £27 for each short-haul ticket.
"We concluded that fully subsidising [taxes and charges] was untenable," says Andrew Swaffield, managing director of Airmiles. "We're moving more in line with the industry norm."
Some travellers will benefit from the changes. At present, anyone needing a flight from Aberdeen, Glasgow, Edinburgh, Manchester or Newcastle to transfer to an international departure pays a surcharge of 500 Airmiles for the connection. From November, rates will be the same as those from London, representing a cut of 28 per cent in the number of points needed for a flight to Amsterdam or Paris.
Effectively travellers who start and end their journeys in London will start subsidising those who fly from the regions.
How can you dodge the devaluation? Book online by 15 November this year for travel by the same date in 2012. Even if you miss that deadline, you can book through the Airmiles call centre anytime up to 15 December.
Time to say adios to Airmiles as Avios arrive
A mark of Airmiles' success was that it soon became a generic term for any frequent-flyer programme. This achievement was all the greater given that British Airways' reward programme was the only such scheme that did not reward frequent flyers (for whom there was a separate currency, BA Miles).
Why would BA surrender so precious a brand? In order to have a common name across all its airline interests, starting with its partner, Iberia.
"We only have rights to the Airmiles name in the UK," says the firm's boss, Andrew Swaffield. "We needed to find a new brand that we could use globally for all of the frequent-flyer and frequent-shopper programmes."
The result of the search: a made-up name that, says Mr Swaffield, is "evocative of travel and aviation": Avios.
That happens to be the acronym of the Association of Visually Impaired Office Staff. When I called Avios (the organisation) to ask for a reaction to the launch of Avios (the flying programme), they said it was the first they had heard of the idea.
Mr Swaffield says the association is "In a completely different sector to us – we don't believe there's any overlap."
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