Are BA miles safe?

June 25, 2009 9:46 AM

Are BA miles safe?

My father has 180,000 points with the RBC Avion programme. He wants to transfer them to the BA miles programme, as they are currently offering a 50% bonus for transfers.

My concern is with the solvency of BA. If they were to file for bankruptcy, what happens to the points programme? I don't know the corporate structure of BA or how bankruptcy works, and he has only a few days left on this offer. What would be your advice to him?

posted by Neiltupper to travel & transportation (4 comments total)

All airline miles programs are subject to the whims of the Gods and the fluctuations of the free market. There is absolutely no way to predict the future of miles programs. if you want to know what others think of the BA program, check here.
posted by Xurando at 10:09 AM on June 25 [1 favorite]

Ok, technically people holding frequent flier miles are unsecured creditors of BA. If a windup were to occur such creditors are generally the last to get reimbursed for "made whole".

But its not quite that simple. The details of frequent fliers potentially represent a very valuable asset. In the past some airlines have honoured these miles, if for no other reason than to gain custom. For example, American Airlines picked up TWAs frequent fliers, Pan Am miles were acquired (and honoured) by Delta ad Continental honoured Eastern's miles when then folded.

But these guarantees aren't assured and one even isn't guaranteed to get the same value (i.e., flights) if a new carrier does indeed choose to honour your miles.

I'm in the same boat, have significant miles on BA and I'm wondering what's gonna happen.
posted by Mutant at 10:16 AM on June 25

If an airline liquidates completely, those miles will become worthless. If they are purchased by another airline before they liquidate, the miles are highly likely to be preserved.

The RBC Avion promotion has historically occurred twice a year, so if he wants to think it over he certainly can wait for the next one.

See for instance:
Next 50% Avion Promotion

Obtaining clear knowledge about BA's future is difficult. They have well-publicized troubles, but some people think that it is primarily posturing to obtain concessions from the unions. Others, like Richard Branson, think that BA is worth very little these days. There is always the chance that the British Government would step in if total collapse seemed imminent. Personally, I'd take the miles if he is going to use them in the next six months. If not, I'd wait for the promotion to reappear at the end of the year.
posted by Lame_username at 10:19 AM on June 25

Frequent Flyer Miles are a form of currency issued by the airline. The airline has the ability to inflate that currency any time it wants to, by unilaterally and arbitrarily altering the exchange rate, so that it takes more miles to buy a ticket.

Airlines in the past who have been in financial trouble have been known to do exactly that, because the outstanding balance of FFM's represents a debt on the corporate spreadsheet.
posted by Chocolate Pickle at 11:04 AM on June 25