07 August 2000

Industry observers believe British Airways may be manoeuvring its Air Miles loyalty business towards a public flotation. The carrier has previously indicated that a flotation of its subsidiary could be on the cards.

Air Miles, which has 6.5 million of its own account-holders via partnerships with third parties such as NatWest, J Sainsbury and Shell, will extend its offering with flights via BA competitors such as British Midland, Aer Lingus and BA’s own no-frills carrier, Go. Members of the scheme will be able to continue redeeming their miles with BA.

Meantime, from October BA aims to build a chinese wall around its key customers, switching members of its Executive Club frequent-flyer scheme to BA Miles and offering a one-off conversion rate of fourteen miles for every Air Mile on their account. BA said it was responding to feedback from regular customers who wanted to use their points to travel further.

The new scheme would enable an Executive Club member with 6,500 Air Miles – currently sufficient to fly free to New York or Boston – to venture as far afield as Kuala Lumpur, Singapore or Tokyo.

BA will today report its first quarter financial results and analysts are not expecting good news.

News source: The Times (London)