Summary
- Avios-only flights had a lot of demand immediatelly after they were launched by British Airways.
- Avios wants to go beyond aviation, having introduced many non-aviation partners to earn points.
- Avios and IAG Loyalty are currently in growth mode, planning to add more partnerships for its customers.
It would be hard to find a more far-reaching loyalty program than the one offered by IAG Loyalty, the subsidiary loyalty company of the International Airlines Group (IAG), which runs Avios. The loyalty currency is used not only by IAG airlines, such as Aer Lingus, British Airways, Iberia, and others but also by Finnair and Qatar Airways. The company also offers loyalty platform solutions, which are also used by IAG-associated carriers.
However, one of the more recent innovations, if you could call them that, was the Avios-only flights offered for British Airways customers. Glenn Commerford, the Head of Pricing and Air Partnerships at IAG Loyalty, spoke about the flights and other developments within the industry and the company with Simple Flying.
Selling out within minutes
British Airways, one of the airlines using Avios-only flights, launched the initiative in April 2023, introducing the offer on flights from London Gatwick Airport (LGW) to Sharm El Sheikh International Airport (SSH) and from London Heathrow Airport (LHR) to Geneva Airport (GVA). A month later, the airline launched further routes.
Photo: Rich Higgins | Shutterstock
Nevertheless, Commerford stated that saying these flights were well-received by customers would be an “understatement.” According to the executive, the flights to GVA sold out within hours, with him adding that British Airways has also added Avios-only to Barbados, noting that these flights sold out in just an hour. In another case of extreme demand for these itineraries, Commerford said that the carrier sold out its Club World business class cabin on a flight from LHR to Dubai International Airport (DXB) in 45 minutes.
The executive added that customers have already spent 50 million Avios points buying Avios-only flights. Commerford clarified that on each British Airways flight, the airline reserves some dozen or more seats for loyalty program members, but these have been extra itineraries added to destinations with a lot of demand.
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More engaged customers
According to Commerford, customers who have purchased tickets on these flights are much more engaging with the general loyalty product, including purchasing non-aviation items and services available through Avios.
“So, we see those customers spend a lot more time with our partners and spend more money with our partners versus a kind of normal cohort of customers.”
The IAG Loyalty representative mentioned that these flights, naturally, only improve the customer proposition that is offered by Avios. The company aims to make it the most in-demand loyalty currency, which goes beyond the aviation and travel sectors and allows its members to book their holidays sooner as they collect Avios through various partners.
Photo: Markus Mainka | Shutterstock
“It really enhances and brings to life our core proposition as well. We are constantly looking at the data and feedback to see what the Members are engaging with and where there is really peak demand, and where we could potentially satisfy that demand.”
Without sharing too much, Commerford only cheekily teased that those interested in more Avios-only flights “should watch this [IAG Loyalty – ed. note] space,” hinting at potential news that should come sooner than later. Not everything related to these flights was positive, with Commerford admitting that there were challenges associated with Avios-only journeys.
“The biggest challenge, I think, for us initially [was that] clearly we are taking a big investment in this proposition, and these are, say, normally very expensive [and] high-demand flights that we have chosen for customers.”
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Avios-only flight challenges
As a result, the company had to balance what was feasible and the demand from customers, one element that IAG Loyalty had to work hard on. The other challenge was the technical setup and implementation, including the infrastructure behind the scenes. Finally, Commerford highlighted the challenges associated with making sure everyone is on the same page, with each stakeholder being fully aware of their role in making Avios-only flights a reality.
Photo: British Airways
Still, the executive concluded that now, while coordinating everything can still be a challenge, there is a core process that has been set up, making it much easier to deploy on future opportunities, with Commerford once again cheekily teasing about future developments within this area.
Photo: Bradley Caslin | Shutterstock
Challenges are plentiful within the loyalty space, and IAG Loyalty is gearing up to tackle them. For example, the company recently launched a new flight-selling platform for Aer Lingus loyalty members, ‘AerClub.’ Commerford explained that there is a lot of infrastructure surrounding a loyalty program, making it sometimes “funky and difficult” for members to find what they want.
Thus, the new platform was introduced with the goal to future-proof Aer Lingus’ ability to sell flights and ancillary products, simplifying the customer’s journey and making it easier for them to understand and receive a much more enjoyable experience.
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Going beyond aviation
As Commerford said before, the main goal of Avios is to go beyond aviation and the travel sectors while still rewarding loyal customers with points that they can later spend on booking flights or holidays. The executive highlighted that IAG Loyalty constantly tries to make its Avios partners as available and relevant to its members globally as possible, adding more partners throughout the past few years, including 14 household brand names and over 300 merchants to its e-store.
“Our goal is for Avios to be a ubiquitous global currency, and to reach that mountain top, we need to continue to listen to the preferences of our members and build out our partners and initiatives that allow them to collect and redeem more easily across a wide range of sectors that are kind of in those markets and have that interest for customers where they are.”
Still, Commerford emphasized that aviation is the heart of what Avios is. However, there are opportunities to broaden the currency within other sectors and industries, with a lot of markets potentially offering great value for customers. According to the IAG Loyalty representative, by connecting those markets with Avios’ core offering only enables its growth.
Photo: Lukas Souza | Simple Flying
Perhaps an underlooked aspect of having so many partners is that loyalty programs help customers during difficult economic situations, such as the cost-of-living crisis in the UK. In January 2023, IAG Loyalty conducted a study – which can be found here – to ask its customers about their priorities during the crisis, with Commerford citing that 53% chose their annual holidays as the second-most popular response. As such, the money that customers spend on various services and/or purchases can go further, earning loyalty points to spend on holidays.
Photo: Nate Hovee | Shutterstock
However, rewarding customers is a complex process. Commerford explained that there is a lot of science involved in determining the number of points to reward customers. “There is not a set guide or formula,” he added, noting that IAG Loyalty is trying to meet a lot of different needs for different customers. Still, the executive said that its pricing teams work closely with its airline and other partners, creating the best formula for rewards.
Another area that is hard to nail down perfectly is how to keep customers engaged with the loyalty program, with Commerford commenting that IAG Loyalty is constantly exploring redemption offers to provide a balance of immediate and long-term reward options. In terms of future partnerships? Once again, Commerford simply said,
“Watch this space.”
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Partnering with airlines outside of IAG
Coming back to aviation-related matters, the executive explained that Avios’ partnerships with airlines such as Finnair and Qatar Airways, both using the loyalty currency, benefit customers as they can easily move their collected amounts between airlines’ programs.
“It gives customers a choice, so we can be relevant in Finland, we can be relevant in the Middle East, [and] we can be more relevant together as global currency [with] partnerships in markets where perhaps individually where we are not as strong.”
Commerford joined British Airways in 1998 before moving to IAG Loyalty and its matters, just as the IAG was beginning to form with British Airways and Iberia joining forces in 2008. Since joining the loyalty side of the business, he was part of the launch of Avios, which the airlines introduced in 2011.
Photo: Fasttailwind | Shutterstock
He explained that, at the time, Avios was the result of a merger of three different currencies, which served different customers and different market segments. Still, a unified currency was a good way to glue together the customer relevancy for the merger between British Airways and Iberia. Looking into the future, the British executive guessed that consolidation, a development that has been the talk of the town within European airlines, could happen within the loyalty space as well.
“More big brands but singular currencies and probably more ways to make that currency more portable and exchangeable, I think is something that you will see in loyalty.”
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Future of IAG Loyalty
What about the future of Avios-only flights? Could there be a tomorrow where all flights are dedicated to a single loyalty currency? Commerford reasoned that these flights work well when they complement the airline’s offering, with a more dynamic approach being utilized to gain the maximum value from the capacity available on a carrier’s network.
In 2023, IAG Loyalty welcomed around 5 million new members. While the executive did not share exact details on the company’s predictions about 2024, he noted that IAG Loyalty was in growth mode, with the key part of its development being the future-proofing of its aviation and travel offerings, while at the same time, making Avios an integral part of IAG airlines and partners’ networks.
Photo: Markus Mainka | Shutterstock
Furthermore, while Commerford once again teased to watch this space, he did mention that with the Avios-only flights going so well, IAG Loyalty is looking at more opportunities to introduce such flights not only with Briitish Airways but with other airlines as well.
And while the executive admitted that competition within the loyalty space is fierce, he believed in Avios as a currency and the approach the company has taken: to make it a global currency. To make it a reality, Commerford stated that the company needs to continue expanding its partner network beyond flying.
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