Why is British Airways Back to 1:1 with American Express?

Without notice or explanation, American Express Membership Rewards points once again transfer on a 1:1 basis to British Airways Avios.

American Express confirmed (via TPG) that this is not a temporary change akin to a transfer bonus.

Today, two of Amex’s Membership Rewards airline transfer partners, British Airways and Iberia, are increasing the transfer ratio for their rewards program, Avios. The transfer is increasing from a 5:4 to a 1:1 transfer ratio.

With this update, Amex’s Membership Rewards program now offers the most 1:1 airline transfer partners – 11 in total.

Membership Rewards now also offers Card Members the opportunity to transfer points to 21 reward program partners, which is more than any other U.S. credit card rewards program.

Plenty of corporate verbiage, but the point is clear: this is not a temporary change.

What was the reason for this sudden change?

To understand why AMEX ever went from 1:1 to 5:4 in the first place, we should probably acknowledge that Chase had something to do with it: Chase issues a co-branded British Airways credit card and offers 1:1 transfers from its Ultimate Rewards program.

The transfer rate “devaluation” was originally announced on June 04, 2015 and took effect on October 01, 2015. I don’t think it is a stretch to assert that Chase pressured British Airways to pressure AMEX to make this change.My first hunch was that there was a two-year sunset clause on this prohibition, but were that the case then we’d be a bit early.

My revised hunch is two-fold. First, American Express had a growing stockpile of British Airways Avios and found that consumers (wisely) were not willing to part with their Membership Rewards points at a ratio less than 1:1.

We book often with British Airways or Iberia Avios at Award Expert but have avoided AMEX to BA transfers precisely for that reason–cheaper do the same thing on Chase. At 5:4 AMEX simply wasn’t competitive to Chase.

Second, Chase’s 5/24 rule is slowing down the proliferation of points, presumably including British Airways Avios even though that particular card does not fall under the rule (cannot apply for more than five cards every 24 months). I suspect Chase wasn’t cutting it in terms of conversions and British Airways persuaded Chase to loosen up.

Put another way, I’m speculating this was a supply/demand issue with British Airways wanting to find a way to maintain status quo on it points sales. This probably proved a better strategy than American’s (cut the cost of purchased points, but hope to make it up on volume…)

CONCLUSION

Whatever the reason, it is nice to see AMEX to BA transfers back to 1:1. Later today I’ll lay out my five favorite Avios redemptions.