Airline Revenue Economics

British Errorways

Brief

British Airways and American Express ran a co‑brand promotion that opened at 12:00 on Wed‑15‑Jul to allow cardholders to book two special ‘‘party’’ flights (BA177 on Thu‑15‑Oct and BA180 on Sun‑18‑Oct) using only Avios; Avios.com reportedly failed before noon and an open booking link allowed unregistered access, producing thousands of simultaneous attempts for just 256 seats and leaving many who followed the rules without bookings. The co‑brand has existed 25 years and card circulation has grown from ~500k to ~750k (per HeadforPoints), with ~90% on the free card. The author argues the event operated as a fastest‑finger lottery and outlines a ballot alternative that would weight entries by years of cardholding (extra weight for paid cards), collect minimum cabin preferences, draw from First down to Economy while verifying Avios, and notify winners with non‑refundable bookings — noting there may have been deliberate or practical reasons BA chose a different design.

Why it matters

On Wed-15-Jul Avios.com reportedly went down before the 12:00 booking window for a British Airways/American Express co‑brand promotion that opened at noon; an open booking link also bypassed pre-registration, thousands attempted to book and only 256 seats were available on the two party flights (BA177 on Thu-15-Oct and BA180 on Sun-18-Oct), leaving many pre-registered customers without seats.

Key details

  • The BA/Amex co‑brand has been in effect for 25 years; circulation rose from roughly 500,000 five years ago to about 750,000 today (Rob Burgess/HeadforPoints), with ~90% previously on the free version and the author a 20‑year cardholder.
  • The author proposes a loyalty-weighted ballot to allocate seats (register, one entry per year holding the co‑brand, extra entries for years holding the paid card, specify lowest acceptable cabin, draw First→Business→Premium→Economy while checking Avios balances and making bookings non‑refundable) as a fairer alternative to the ‘fastest finger’ system the promotion effectively used.
Source evidence

Before omnishambles there was mockasham. The first was coined by famously angry TV character Malcolm Tucker in 2009. The second was used at LSE when I was there in the early 2000s. Both could apply to a recent promotion by British Airways and American Express, which went drastically wrong on Wednesday. Despite the issues the airline and the card issuer encountered, there may have been rational reasons why the initiative was set up to fail. In this article will first briefly cover what went wrong. Then I will outline how things could have been designed differently, and indeed to reward airline Loyalty KPIs. Finally I will explain why they were not. Advertisement: Note: I can’t claim credit for the British Errorways title, which must go to online poster “Nick”! What went wrong? When I wrote about the BA and Amex co-brand card five years ago there were probably around 500 thousand cards in circulation, roughly 90% on the free version. Rob Burgess of HeadforPoints, a blog, recently reckoned that circulation is now 750k. The co-brand has been in effect for 25 years and your favourite airline revenue economist has been a holder for 20. To celebrate, BA is turning one of its regular flights to New York JFK into a party plane. BA177 on Thu-15-Oct and BA180 on Sun-18-Oct are currently in the reservations system, but have been zeroed out for some time. The deal was the co-brand card holders could register in advance and then log on to book at 12 noon on Wed-15-Jul. No cash element was required for tickets – only Avios. It seems that avios.com went down before 12 noon. To add further confusion, there was an open link to make bookings too which did not require pre-registration. Thousands of people tried to book. There were only 256 seats on the plane. Inevitably people who followed the rules and logged in on time did not get any seats. Noteworthy aside Interestingly there are no seat reservations on the two special flights assigned at the time of writing, 22 hours after the promo took place. This suggests that passengers have not yet received booking codes. How could things have been designed differently? The system used was, even if it had worked, a lottery. Essentially it was fastest finger first. A ballot would have saved all the people trying to book a lot of stressed. It could have even rewarded loyalty to the BA and Amex co-brand and might have looked something like this: Step 1: register for the ballot Step 2: receive one entry per year of holding the co-brand to reward loyalty Step 2a: receive another entry per year of holding the paid card to reward loyalty even more Step 3: specify the lowest cabin you are willing to accept Step 4: run the ballot drawing First Class seats first, then Business Class, then Premium and finally Economy, eliminating people who will not accept each lower cabin or who do not have enough Avios in their account as you go Step 5: notify winners, all bookings non-refundable So why did BA not do this? The ballot system above has three disadvantages: Read more