This article was first published in the summer of 2019 as part of a 100 part series on the history of British Airways and its predecessor airlines, Imperial Airways, BOAC and BEA. You can browse the full series of 100 stories in numerical order, by theme or by decade.
The very first frequent flyer programme can be traced back to 40 years ago, after the deregulation of the US aviation market in 1978.
Deregulation allowed US airlines to choose their own routes and set their own fares without Government approval. Established airlines facing newer upstarts turned to incentive programmes to revive falling revenues and profits.
The very first frequent flyer programme is credited to a small regional US airline called Texas International Airlines. By today’s standards, it was relatively unsophisticated. Passengers earned paper coupons which could be pooled to earn free flights.
American Airlines launched its “AAdvantage” programme on 1 May 1981, which American widely credits as the first true frequent flyer programme. At the time of launch, it wasn’t certain it would last. However, all major US airlines quickly followed suit. And they were an instant success.
By 1984, an estimated 75% of US business travellers were members of a frequent flyer programme. The programmes soon expanded their reach with the ability to earn miles from car hire and hotels, and redeem miles on international partner airlines.
Even without the aid of internet blogs and forums passengers quickly learned how to exploit the programmes to maximum advantage.
BA launched the Executive Club in 1982. Little is known about its early years. However, it was not a traditional mileage accrual programme. For many years, the only way to earn miles flying on BA was to credit your flight to another airline programme.
In the 1990s, BA introduce AirMiles as the currency for its frequent flyer programme, later to become BA Miles and then Avios – a currency now shared with all airlines in International Airlines Group.
The programme has been through periodic changes over time. In its early years the emphasis was very much on exclusivity. Additional tiers have also been added such as Bronze, and Gold Guest List – no matter how high you reach in the hierarchy, there is always something you don’t have access to. There is of course the elusive invitation only Premier status, which is a case of if you have to ask…
Whilst the Executive Club remains geared towards rewarding most those who are seated closest to the nose of the aircraft, there has been emphasis on becoming more inclusive. BA has tried to move away from the perception of a hierarchical club to one where each membership tier carries its own identity and benefits:
Of course today, miles can be earned through many more means than flying. Spend any time in Central London and you’ll regularly see BA branded American Express cards tapped on to Tube gates and contactless payment readers.
In total, over 100 billion Avios are issued across all participating programmes a year to more than 8 million active members. Around half are issued through means other than flying. The sheer scale of the programme does make it an extremely powerful, and some would say a distortive influence which smaller rivals such as Virgin Atlantic struggle to compete against.
For BA, it is also a customer service recovery device. Whether it’s a faulty IFE system or a complete operational meltdown at Heathrow, a dolloping of Avios can help smooth everything over.
At some point BA is expected to follow US airlines and start issuing miles by reference to the price paid for the ticket rather than distance flown. Reward flights will also be subject to “dynamic pricing” rather than a set tariff. Subject also to IT upgrades, members of different frequent flyer programmes that use Avios will also have access to a single “Avios Bank” across all programmes.