Many InsideFlyer readers were probably surprised by the recent announcement that Qatar Airways Privilege Club would be joining the Avios eco-system.
Whatever your reaction, you might be wondering WHY Qatar Airways has made this commercial decision. After all, a loyalty program is supposed to be highly profitable for any airline. Yet aligning with Avios might appear to be Qatar Airways abandoning its own loyalty program, Privilege Club.
It is very easy for Iberia, Aer Lingus, Vueling and of course British Airways to share Avios (and to allow you to combine your Avios freely between them); they are all owned by International Airlines Group. But Qatar Airways is a completely separate entity, despite its 25.1% ownership of IAG. So, whenever you eventually “combine your Avios” between Qatar Airways Privilege Club and an IAG loyalty program, there will surely be compensation going back and forth.
A Brief Summary of How Frequent Flyer Partnerships Work
One of the major advantages of airline alliances/partnerships is that you can fly on one airline, but earn miles with a different airline’s loyalty program. For example, many InsideFlyer readers have flown on Qatar Airways but credited their flight(s) to British Airways Executive Club. At the same time, airline alliances allow you to redeem your miles on award travel with a partner airline. Again, most InsideFlyer readers will have booked award travel on a partner airline before.
When you credit a Qatar Airways flight to British Airways Executive Club, for example, Qatar Airways must compensate British Airways for the Avios issued (which become a liability of British Airways). When you use your Avios to book a reward flight on Qatar Airways, British Airways must also compensate Qatar Airways.
Of course, airlines aren’t constantly sending money back and forth as loyalty program members make individual transactions. At regular intervals, the airlines do the sums and net off the total amounts owed to each other….