I received an email this morning from Air Miles. No, not just one of their periodic statements but a different kind that had a subject header announcing: Important News – Air Miles is Changing. When I opened the email the banner proclaimed: Airmiles is changing to Avios on 16 November 2011.
Being cynical about supposed cosmetic re-branding and the opportunities it provides. I clicked on the link in the email to ‘Discover Avios’, logged in as requested and, while I was searching for some answers, a chat dialogue box popped up inviting me to open it, which I did. By that stage I had read that Air Miles – soon to be Avios – intended to take the airline taxes, fees and surcharges out of our Zone fares and you’ll pay them in cash instead. So with that in mind, this was how the dialogue went … (please forgive the typos in the chat text)
[Donna] Hello, my name is Donna, how may I help you?
[Mr Henry Page] Hi, I am concerned because if you take the airline taxes, fees and surcharges out of our Zone fares and you’ll [get us to] pay them in cash instead, that will mean that your deals will be considerably devalued for the customer
[Donna] The reason we have introduced Taxes, fees and charges is to come in with BA and Iberia. We have also reduced our Zone prices and a lot of our destinations have come down in price. this is then to ofset the fees.
[Mr Henry Page] But the whole point of an Air Mile was it’s ability to be understood as ‘one travelling mile’ what is an Avios, why do 10 Avios = 1 mile? How can you reduce Zone prices when a-b journeys are charged in miles?
[Donna] Airmiles, BA and Iberia are all part of the IAG company. To benefit our customers we are now introducing One Shared Currency called AVIOS. To co-inside with this and to make all the reward programmes equal, your Airmiles will multiply by 10.
[Donna] We will have a brand new zone map, and most of our destinations will have reduced in price.
[Mr Henry Page] So will the rewards still be miles or not?
[Donna] We are also introducing one way trips, Non UK originating flights, Different Airport options. The rewards will be Avios.
[Mr Henry Page] So what you are saying is that the rewards will no longer be in units of one ‘mile’, that customers will collect ‘Avios’ and these will be exchangeable against a priced holiday … meaning the Avios will have no relationship witha fixed reward the equals one mile?
[Mr Henry Page] with a fixed reward that equals one mile?
[Donna] The reward scheme of Airmiles, were one mile is equal to an actual mile, has not been into effect for 15 years. Avios will be equal to what Airmiles are the equivalent too today but multiplied by 10.
[Mr Henry Page] So currently my Air Miles would fly me free (inc. charges) to Bangkok … will they still do that after Nov. 16 when they become Avios?
[Donna] Yes they will still fly you to Bangkok. The current rice of this flight is 8,000 miles (80,000 Avios) but in the new world the price will be 60,000 Avios which is a reduction of 20,000 Avios.
[Mr Henry Page] I think Air Miles were easier to understand – they related to a map, your map of zones – and they related to the base costs of the journey in the same way that a bought ticket does (less of course the fuel surcharge).
[Mr Henry Page] Now the flights will be exchanged for Avios, which bear no relation to either monetary value or mileage travelled
[Mr Henry Page] In short, travellers will be unable to know if they are getting value for money
[Donna] Avios will be exactly the same scheme as Airmiles, with added benefites as I have mentioned above. The main difference that is changing is just the name (and we are now obviously charging fees). Airmiles also have no monetary value or mileage travel value.
[Mr Henry Page] I still maintain that separating the value, the unit of reward, from either money or mile makes it difficult if not impossible to value. Let me give you an example. My flight to Bangkok would, as I said, be free as I have 8,500 miles and the flight to Bangkok is 8,000 miles (note: miles) but after 16 November I would pay the equivalent of 6,000 miles (60,000 Avios) but what would my liability be in terms of fees and charges, which were included before?
[Mr Henry Page] I can only make that calculation by referring back to ‘miles’ … in the future it will be impossible to make such a comparison
[Donna] The new price to Bangkok would be 60,000 Avios plus taxes, fees and charges. The change of our pricing structure is to bring us inline with BA’s scheme allowing our customers to book with more availability and choice.
[Mr Henry Page] So if an average flight, including fees and charges, currently costs around £500 to Bangkok, I will pay how much from Nov 16 having exchanged my 60,000 Avios? What will the monetary input be?
[Donna] Taxes, fees and charges change on a daily bases and will always depend on the destination you are travelling too.
[Mr Henry Page] So, you are honestly trying to tell me that you don’t know what the charges would be for a flight less than 11 weeks away? I understood you were here to answer those questions?!?
[Donna] You will pay the relevant airport taxes, fees and charges that change daily dependent on fuel costs.
[Mr Henry Page] So I am not going to get an answer? The costs could be half of that journey, meaning that I would pay 60,000 Avios (6,000 miles) PLUS a possible £250 in charges and fees, not much of a deal really?
[Mr Henry Page] Remember that currently with 8,000 it would be free
[Donna] I can tell you what the price would be today but obviously this would be subject to change.
[Donna] I am just going to get you a price now for eleven weeks time, but as I say above this will be subject to change.
[Mr Henry Page] What would those charges be today?
[Donna] Just bear with me a second please to take a look.
[Donna] The current cost of taxes, fees and charges will be £321.00 but this is subject to change.
[Mr Henry Page] So your the Avios change will result in my 8,000 Air mile flight (free to me) turning into 60,000 Avios (6,000 Air miles) AND paying £321 on top? Time to cash in my miles for tickets and say sayonara (googdbye) I think …
[Donna] I’m sorry you feel that way. Is there anything else I can help you with?
[Mr Henry Page] There are some flighs available today to Bangkok for £420 pounds … that will mean that my 6,000 Air Miles will be devalued to £100?
[Donna] We are having to introduce the taxes, fees and charges are being implied as we are no longer, as a company, able to subsidies them. This is why now we have reduced our zonal fares.
[Mr Henry Page] Sorry I have to go … I need to book a flight before the stampede comes from Air Miles customers trying to get some value from their collected Air Miles …
[Donna] Bye for now. Have a great day.