Many InsideFlyer readers were probably surprised by the recent announcement that Qatar Airways Privilege Club would be joining the Avios eco-system.
Whatever your reaction, you might be wondering WHY Qatar Airways has made this commercial decision. After all, a loyalty program is supposed to be highly profitable for any airline. Yet aligning with Avios might appear to be Qatar Airways abandoning its own loyalty program, Privilege Club.
It is very easy for Iberia, Aer Lingus, Vueling and of course British Airways to share Avios (and to allow you to combine your Avios freely between them); they are all owned by International Airlines Group. But Qatar Airways is a completely separate entity, despite its 25.1% ownership of IAG. So, whenever you eventually “combine your Avios” between Qatar Airways Privilege Club and an IAG loyalty program, there will surely be compensation going back and forth.
A Brief Summary of How Frequent Flyer Partnerships Work
One of the major advantages of airline alliances/partnerships is that you can fly on one airline, but earn miles with a different airline’s loyalty program. For example, many InsideFlyer readers have flown on Qatar Airways but credited their flight(s) to British Airways Executive Club. At the same time, airline alliances allow you to redeem your miles on award travel with a partner airline. Again, most InsideFlyer readers will have booked award travel on a partner airline before.
When you credit a Qatar Airways flight to British Airways Executive Club, for example, Qatar Airways must compensate British Airways for the Avios issued (which become a liability of British Airways). When you use your Avios to book a reward flight on Qatar Airways, British Airways must also compensate Qatar Airways.
Of course, airlines aren’t constantly sending money back and forth as loyalty program members make individual transactions. At regular intervals, the airlines do the sums and net off the total amounts owed to each other. The objective is to end up with minimal net effect.
A partnership doesn’t really work when the relationship gets out of balance. Think Avianca LifeMiles… where nobody I know credits Lufthansa flights to LifeMiles, but some will happily buy LifeMiles to redeem for Lufthansa First Class rewards. This helps explain why once in awhile LifeMiles cannot access certain partner award inventory.
Is the British Airways / Qatar Airways Loyalty Program Relationship Currently in Balance?
It can be dangerous to assume that everybody shares the same opinion or knowledge. But for anybody based in Europe/North America, why would you credit your Qatar Airways flights to Privilege Club? Some might… especially those who don’t understand airline alliances and simply sign up for the program of the airline they are flying next. But most people would hopefully recognize that you can simply credit your Qatar Airways flights to British Airways Executive Club. (or Iberia Plus or AAdvantage, etc). Not only would you earn Avios or AA miles – easier to understand and use – but Business Class travelers should know how useful those Tier Points can be for earning elite status with British Airways Executive Club.
On the flipside, would you ever spend your Avios on a Qatar Airways reward flight? Because Executive Club charges on a per-flight basis, you end up spending far MORE Avios to book a reward itinerary on Qatar Airways. Executive Club also adds surcharges (that BA keeps). The total effect is ruinously expensive reward flights…
As things stand, therefore, Qatar Airways might be PAYING a substantial amount to British Airways – for Executive Club members flying on Qatar Airways paid fares – but RECEIVING very little from Executive Club members booking rewards on Qatar Airways.
What Combining Avios Might Accomplish
In 2018, Qatar Airways Privilege Club made a higher devaluation of its award chart. This devaluation was essentially reversed in 2020. Privilege Club doesn’t publish an award chart, however. You must use the unwieldy QCalculator to figure out how many QMiles you require for each city pair.
But taking my Paris to Doha to Seychelles example from above, you would only require 65,000 QMiles for a one-way trip in Business Class. With no surcharges to be added…
When and if we can “Combine Your Avios” freely between Qatar Airways Privilege Club and an IAG loyalty program, it might make a lot of sense to move Avios TO Privilege Club and book reward flights on Qatar Airways. Certainly far more sense than booking Qatar Airways reward flights through British Airways Executive Club.
By joining Avios, Qatar Airways might be seeking to rebalance its relationship with British Airways. By tempting Avios collectors to spend more of them via Privilege Club – reducing the amount that Qatar Airways owes BA every month – it might just be a savvy financial decision. And that’s before taking into account any commercial / marketing advantages from issuing “Avios” instead of “QMiles” …
What do you think? Let us know in the comments section…