British Airways’ £1 Million Avios-Only Cape Town Flights Revenue Loss

LONDON- British Airways (BA) operates innovative Avios-only flights, allowing passengers to redeem points for all seats on select routes.

The latest offering targets Cape Town International Airport (CPT) during the peak holiday season, potentially sacrificing significant revenue to boost loyalty program engagement.

This analysis estimates the financial impact on BA from running an Avios-exclusive service from London Heathrow Airport (LHR) to CPT, departing December 20, 2025, and returning January 2, 2026.

By modeling fare structures and market demand, it reveals how such promotions support Avios’ growth despite opportunity costs.

Photo: Aero Icarus | Flickr

British Airways’ £1 Million Revenue Loss

British Airways introduced Avios-only flights in April 2023, starting with short-haul destinations like Geneva and Sharm-el-Sheikh using single-aisle aircraft.

The program expanded to long-haul routes, including Dubai in autumn 2024, Barbados in February 2025, and Abu Dhabi during Easter 2025. These services allocate entire flights to Avios redemptions, displacing cash-paying passengers.

The Cape Town route stands out as the most ambitious, timed for the Christmas peak when leisure demand surges. Unlike Dubai or Abu Dhabi, which may include some business traffic, Cape Town over the holidays attracts primarily vacationers, with fares typically at premium levels.

Avios Group Limited, part of BA’s parent IAG, likely compensates BA at market rates for these seats, estimated at over £1 million for this pair of flights.

According to Head for Points, the strategy aims to demonstrate aspirational redemptions, drawing more users to the Avios scheme.

The 2024 annual report shows £363 million profit on £1,585 million revenue, with 22.9% pre-tax margin, 24% growth in Avios earnings, and 20% in redemptions. Such flights fuel this expansion by enhancing customer loyalty.

Photo: Clément Alloing

Timing and Release Strategy

BA released the Cape Town Avios-only flights 142 days in advance, shorter than the 222-317 day average for other 2025 services.

This reduced window may curb speculative bookings and cancellations, as flights sell out quickly. It also aligns with post-summer planning, when many families shift focus to winter breaks.

The outbound flight holds higher value due to inventory constraints, reflecting stronger demand for pre-Christmas travel. BA operates paired flights on these dates, with the non-Avios service nearly full, suggesting possible reallocation of cash bookings.

Photo: MCO Airport

Fare and Revenue Estimates

The analysis employs a refined “shelf” principle, equating revenue contribution across fare classes: high-volume low-price (economy), mid-range (premium economy), and low-volume high-price (business/first).

For Dubai, the prior model used London-origin fares but overlooked cheaper European options and assumed balanced inventory.

For Cape Town, adjustments account for 10-50% of demand from Europe, where fares dip lower, e.g., Club World at £5,553-£9,086 versus £6,292 ex-London.

Direct fares around Christmas include £12,341-£16,555 in First, £6,292 in Club World, £4,144-£5,133 in World Traveller Plus, and £2,716 in World Traveller, excluding taxes.

Scenarios yield £1.2-£1.3 million total revenue opportunity for the round-trip, with the outbound leg more lucrative.

This exceeds £1 million sacrificed, though actual bookings and early inventory could adjust figures slightly.

Photo: London Gatwick

Broader Impacts

Avios-only access makes high-cost holidays feasible, fostering goodwill, and passengers may retain BA credit cards or prioritize the airline for future trips. For others, it yields real savings redirectable to additional BA services.

Despite costs, the approach sustains Avios as a high-margin driver, attracting new collectors through proven redemptions.

Cape Town exemplifies this, even as ancillary expenses like hotels remain steep, with options from £5,000 at The Westin to over £20,000 at Mount Nelson.

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