What is The Point of Airmiles?

I have over the years, off and on, saved airmiles - the BA focused customer loyalty scheme. I have tens of thousands of the things. Yet, it is only when you actually try to do something with them that you realise they really are pretty useless.

This year I have travelled a lot on BA through work, and the odd bit of leisure. For a while I made a conscious effort to stick with them as I thought travel would be a lot easier through Terminal 5 and I would indeed build up airmiles that might get me to a Silver Card or I could use them on a holiday. I have must admit that I have travelled enough this year to become an expert on every terminal except four and most European airports. I can say that Terminal 5 is pretty good - it's very accessible from the M25 if you can avoid the roadworks, there's plenty of room at setdown, a good carpark and there are reasonable bus routes serving it if you don't mind endless stops. Trains are fine if you are coming from London - other than that, then forget it.

Quite big things let it down. Staff shortage is the first. That is at both security check in and passport control. It's like being a local Budgens - they wait until the queues are so long that people are snaking all over the place and back into the terminal before they even consider opening up a second or third machine and there are always ones not being used. Meanwhile at passport control it's just an ugly mess and a big scrum - in fact, at every terminal. It's a real shame after so much money and effort when into it. Going through any airport in Germany you simply do not get those sorts of queues or daft bottlenecks, there are always plenty of machines or stalls open and loads of staff. The throughput is much faster too and that has nothing to do with the severity of checks, it is simply staff more interested in getting the queues down and more of them.

Enough of those gripes - back to blinking airmiles. I read with some eagerness that BA has opened a direct route to Las Vegas and next year for my brother-in-law's 40th birthday we are going there. The big problem I have found with airmiles is that they are not a real 'currency'. For instance, if you want to upgrade to Club Europe, it's the same airmiles for an hour's trip as a long haul upgrade. Dumb. The second thing is, it's actually quite hard to spend them. We are one of those families who have to grab time when we can and even if we could plan a trip, we would usually buy a package holiday of some sort. So airmiles would be handy for grabbing those trips of whim. But there is fat chance of you getting the dates you want.

It is a Ryan Air approach that says that one type of traveller only gets cheap fares, all others pay accordingly and expensively for their needs. BA airmiles are the same - unless you are flexible to an amazing degree, it's highly unlikely you will get a flight to suit. And this is not just on one occasion - my airmiles have not been spent for nearly 3 years and yet I try regularly to get flights with them.

So Vegas next June sounded ideal. I now had dates a year ahead, could be flexible by about 3 days and I needed hotels too. Wallop. I could possibly get a flight 10 days after the dates needed and then coming back would mean nearly a fortnight stay which was not ideal for a planned 4 night trip. I didn't even get to investigating a hotel.

I then made the mistake of phoning the Executive Club to see if there was a mistake. Nope. No airmiles seats were available for that flight any time around the dates. The phoneperson said that it was a very busy route - so busy it has yet to start flying, I mentioned. Ah, there had been high demand. Right, that's why I could buy the tickets by the bucket load from any website including BA's, I suppose. Ah, said the person, there are only a few airmiles seats allocated to each flight and therefore they sell out early. Given the route has yet to launch and was only just featured in HighLife Magazine, that was pretty quick indeed. In answer to my question, why are the airmiles seats limited to so few, the person said that they had to make a profit.

At this point I did not hold my peace. I asserted that the whole point of a customer loyalty scheme is that customers already have paid for tickets upon which BA accrues a certain amount of profit which is set aside to pay for these future flights. I can see the point of trying to limit them but by making the number so low, and therefore the scheme so inflexible, people like me would get exasperated and therefore think the scheme is valueless. Put simply, if you cannot redeem the airmiles, then they are worthless. Just to make matters worse, when I tried to use them for the same dates on non-direct routes and via partner airlines, the same answer came up.

So out of sheer morbid interest, I looked at several websites and airlines, every one of them was cheaper for direct and indirect routes to Las Vegas. In the end, we looked at two great deals via Air France and Virgin that got us 4 nights at the Bellagio Hotel and the whole package was cheaper than an indirect flight with a BA partner, using mostly airmiles to pay for the flights and having to fly over week later. Just to be clear, as Robert Peston would say, it was more expensive using a customer loyalty program and less flexible than the alternatives, one of which was a direct flight.

I could have commented that BA is losing shed loads of money and it is simply driving customers away as, frankly speaking, if I can avoid BA in the future, I will. The rules on accruing Tier Points are stupid and Virgin does not have such a stupid and complex scheme nor do most other airlines. Finally, all the others, in my experience, fall over backwards to help you spend the loyalty points.

After all, that is the entire point of the scheme. Perhaps it may dawn on BA management that if their loyalty scheme is not incentivising loyalty then they are giving away money for no reason to fund it. However, if they give the profit away in the spirit of customer retention, do not make it difficult to redeem the points.

It's pretty simple really. Vegas here we come - and not via BA.

'Screw it - just do it!'

Having just had a fairly poor value-for-money experience on a Virgin Train going back and fore to Preston the other day, I picked up the copy of Richard Branson's Quick Read booklet of the title above to learn the secrets of running a truly over-priced rail franchise.

It was enlightening and I think everyone should 'Screw it - just do it!' and start their own train franchises as it has made 'Ricky' wealthy enough to buy not just one but two Caribbean Islands, don't you know.

The Virgin Engine

There is no doubt that spread over 200 companies and employing more then 40,000 people, the fresh faced, toothsome lad who started flogging advertising in his 'Student' magazine while still at school, has built up his business with a well-versed formula. And there are things to be learnt from such a booklet.

I draw the line at such pithy remarks from self-help gurus who tell you everything is possible, you just have to apply yourself. That is simply not true, as many are not born into a world of advantages - for many millions, a goal is to survive the day, to get their next mouthful of clean water or food.

Self-help books in the Third World are useful only for mopping up dysentery.

However, Ricky Branson has built a Virgin brand which does hold true to the original values. If you buy a Virgin product you can expect the slight maverick instinct, the understated emphasis on fun or entertainment and in general an expectation of value for money pervades. I wonder if Virgin Funerals could be a new business opportunity.

To some extent, I have felt that Virgin brands like Virgin Atlantic cocked a snook at the Big Guys like BA and rather than take them on as a cheap alternative, the focus was on providing competitive products, with a bit of flair and an eye to woo customers. They invented the concept of 'Premium Economy', the idea of having some more comfort and leg room but not over-paying for some plank of a bed and warm meals with semi-expensive wines. Upper Class struck at BA First Class yet at a Business Class fare, and together with in-flight massages, there was a real feeling of going that extra yard. In the spirit of fun, I was always surprised that membership of the 'Mile High Club' was not included.

We could go through business by business but each one took a swipe at the incumbents and gave a little extra zip that engendered great loyalty, even down to alternatives cans of cola although I really did not like the Virgin chewing gum found in toilets - dumb idea and tasted foul but blew great bubbles.

What I like about Richard Branson is that he was not experienced in any of the businesses he started beforehand. He was not a pilot nor an experienced manager of an airline, he never manufactured soft drinks, he never ran a bank or an entertainment company yet he started those businesses. His ethos of 'Screw it - just do it!' is a very real part of his being.

It's a lesson for all those companies out there who demand the next employee to have 'direct experience' of the job - you are almost certainly missing out on very capable people who apply business skills on a wider level and entrepreneurial types who can make things happen. But then again, no one ever got fired for just recruiting poorly, they do for not following procedures - another of my pet hates.

So What Happened To Virgin Trains?

The Virgin Train experience starts out nicely. There are always nice people at ticket counters, everyone looks smart in their tailored Virgin suits and coats, the trains themselves are modern, smart and fast. It looks and feels great. But then you you buy a ticket. You can feel the credit card crunch each time as you get nothing cheaply on Virgin Trains. Whether Standard Class or First, expect a severe lashing.

The onboard environment is good particularly in First Class - nice seats, power to laptops, lights for reading. Then comes the food. There was a time when Virgin travel franchises went to famous chefs for advice - well not many make good sandwiches by the looks of it. The ticket prices remain pricey after peak time but the food and drinks served are actually cold sandwiches and are very bad. I can't remember the last time I travelled with them and hot food was served, the rules are so daft - and that really hammers the 'Value For Money' experience you expect. On top of that, I cannot remember the last time the train left and arrived on time. Granted the fiasco at Milton Keynes the other night was beyond Virgin's control but I had asked a nice Lady at the Virgin Ticket Counter in Preston if I could travel on the earlier train and having already paid £271 for a return ticket, I was told to get the earlier train back would be a further £130! The train was virtually empty.

The Point of All This

Where the Virgin Brand has excelled is by providing the almost maverick alternative to the status quo products and services that epitomises what Branson himself modestly calls 'The Rebel Billionaire', his TV program (what, you don't have one of your own?). We buy because we too are two-fingering BA and the large airlines who have had to respond accordingly with better service and lower cost flights and it has revolutionised Trans-Atlantic travel, make no mistake.

BUT, when it comes to running a franchise, unopposed, Virgin has slipped into jobsworth mode. They can afford to charge what they like, make as much money as they like, provide whatever level of service they like, charge stupid money for transferring one train to the next - but wrap it all up in the Virgin livery and we think it's the same as before.

It isn't. When Virgin are unopposed and providing a service for which there is no real competitor, they are just as poor as the rest.

Competition Maketh The Man

So what Ricky's book did say is that Virgin is a maverick, fun-loving business that takes old and crusty services and products and provides an alternative which gives extra often for less with a bit of an air of fun thrown in when in competition with that old product or service, and it's good at that. But what it did NOT say was when it comes down to cashing in on a monopoly winner like a Rail Franchise, it operates like an old, crusty service provider itself.

It's a bit harsh as it started out so well with lovely, fast-rolling trains, but sometimes those who believe every word of their own bull need a short sharp reminder that not every aspect of their business is as smiley, shiny and maverick as they think.

I could start on Bill Gates next on this subject but maybe another time.