Pricing Games on the Daytime Eastbound TATL

Everyone knows that when you go from Europe to America, it’s a daytime flight. And coming to Europe from America, it’s an overnight flight, which from the East Coast can be quite a short redeye. There are a very small number of exceptions to this rule for flights to London. Both BA and Virgin have a daytime eastbound flight from each of Boston and JFK into London. United runs daytime flights from Newark and Dulles. Air Canada do the same from Toronto. All of these are 8-9am departures for an 7:30-9pm arrival in London.
(Norwegian also have a JFK to Gatwick flight that is a daytime one, but it is far more inconveniently timed as it is not scheduled to arrive until 11:30pm)

For this post though I am just concerned with the New York to London market. I ended up being re-booked onto the United daytime flight from Newark on my way home last week due to weather delays on the previous day that stopped me getting to an overnight flight across the Atlantic, and found that the jet lag was significantly lessened from not spending the previous night barely sleeping in Economy class. So I have resolved to on future trips, where possible, utilise the daytime flights.

However, as a committed star-alliance flyer for revenue tickets, for the benefits of Aegean status, United’s pricing on this route troubles me – as they charge more for the daytime flight than the overnight ones. All the examples I found, United were not allowing their lowest fares to book onto the direct flight in the daytime from Newark. For example, a random off-peak date that all the legacies are price matching their lowest fares at £279, show United want more for the daytime flight.

daytime united

And substantially more at that – a nearly 50% premium on the overnight flights. I can, on the face of it, see why this could simply reflect demand. Economy customers prefer the day flight because it is far more comfortable than an overnight, and business class customers are less likely to either want the daytime being taken up by being on the plane, and are less willing to pay to get a flat bed when the flight is not overnight. It is easy to see the logic that the airline needs the economy cabin to produce more revenue on this flight and there are reasons why it could also produce that extra revenue. So if this is the case, how are the other Joint Ventures pricing this route on that day?

Huh. So both BA and Virgin are not asking for more to be on the daytime flight. Interesting.

[BA’s website displays the cost per leg, but the combo of the inbound at £76 with the lowest cost outbound also prices the ticket at £279]

The counter logic to the daytime flight having more demand is that for economy travellers too, the loss of a full day to travel rather than a night is more problematic than the Jet lag.. which I can believe to be true but then it begs the question why doesn’t that apply to United too? Why do United feel they can get away with pricing higher?

My only theory is it being related to United having a different core customer to BA and Virgin. Whenever comparing the 3 JVs, the lack of a UK based airline in the United/Star-Alliance venture, should mean that compared to BA/AA and Virgin/Delta they have a greater percentage of their customers being US-based. The flight time preferences for US vs UK based customers could be sufficiently different to justify the pricing changes but it isn’t obvious that should be the case.

A mystery that only the internal data can solve..

A Short Blog Post – A somewhat unexpected benefit of mileage-based earnings

An update on the American Airlines delays from the previous post.

The 3hr delay turned into a cancellation as the plane went mechanical again. This lead to rebooking via Dallas the following day and a 22hr delay. As with my previous post my emotional response to this delay is not particularly strong – I had a spare day in my schedule and planes breaking down is something that happens – fine. AA offered me a $175 voucher for it when I wrote in which offsets the minimal genuine interruption I was caused.

The real point of this post though is to discuss the present that I found in my BA account!

dfw pib

The rebooking clearly required a change of fare class into something that credits back to BA at 100% of miles flown. If however, rather than distance based BA had moved to the fashionably new method of being revenue based then I cannot see how there is any way there would have been the (admittedly fairly small) present back from AA for the flights.

Another reason why the best Airline loyalty programs should keep miles flown as the core of their program and not just spending!

American Airlines I.T. is useless, and a fan of time-travel

Today I have had the delight of venturing across the pond to see some friends in Mississippi. Landing in Chicago by way of Dublin, after two on time and acceptable flights on United and Ryanair (a report on those will appear at a later date) my journey to the South was rudely interrupted by American Airlines regional operation, and some comical IT.

This flight I booked as a standalone flight, using British Airways Avios points in what I would consider to be a pretty good deal. A little 50 seat CRJ pootles down from Chicago to Meridian, Mississippi, (MEI) stops for 20 minutes as a few people get off, and then it continues onto Hattiesburg/Laurel Airport (PIB)- a 69 mile flight according to GCMapper. I have no idea how precisely BA defines a segment for its pricing of AA awards, but in this case I was charged 7500 avios and $5.60, so I am glad that common sense has prevailed and the 69 mile flight under the same code isn’t charged a second 7500 avios. Given that cash prices on this route are almost always over $150 each way a very satisfactory redemption indeed.

However, the CRJ that I am meant to be on went tech yesterday in Montreal by the look of its history, and had to spend approx 24hrs on the ground there being fixed. Okay, happens, a plane breaks down and delays happen. That’s fine. AA’s response to this has just been a shambles though.

For a kickoff, the delay to the flights down to Mississippi tonight was not communicated in anything like a timely manner. By 10AM this morning they knew that the plane had missed its planned restart time and flight back to ORD to start its schedule for the day. Yet, it took til 2.30pm for this to be reflected in the reservations details. As such rather than seeing whilst on my United flight that I had a delay and being able to try and fix it, it was too late to do anything.

Next, and the real comedy, is the predicted new timings for the flights. As the screenshot shows, the AA app is confidently telling me that the plane which does continuing service from MEI to PIB will land in PIB around 15 minutes *before* it gets to MEI. And trying to get a sensible real ETA off AA on twitter has taken 10 messages and counting for them to even recognise what I’m asking for. Yikes.

Finally, I am being told that I am at risk of missing a connection! On a flight with continuing service! How is this even possible! It’s Not!

It is not so much a problem for me as someone who is a reasonably calm and experienced traveller so I am only inconvenienced in this by my lack of ability to tell my friend what time to get to the airport to pick me up… but if I was a once a year traveller? I would be concerned, ruining the travel experience more and would be seeking out agents, taking up their valuable time.. and all over an shambolic IT glitch. And that, is a nice summary of it. This entire experience just makes AA seem shambolic at running an airline. So in future, when I’m considering who to buy tickets from – in the back of my mind is the memory of AA being a shambles. Perhaps that is why their Revenues and Stock Price are doing badly…

Churning is dead. Long live Churning.

As the blog world has resoundingly noted in the last 48hrs American Express has massively sharpened the rules on getting sign up bonuses on their suite of UK credit cards. The TLDR version is that if you held any card in the previous 24 months you are stuffed and won’t receive any bonus. Also as they are the only real issuer of rewards cards in the UK so essentially – churning cards appears to be dead – which is very bad news for the points and miles community in the UK. And for me personally, the ability to do the trip outlined in the previous post is substantially limited…

However I see a slight chink of light that may end up saving us slightly. The news will still be bad but perhaps it is not quite as fatal as first thought. Whilst the precise details are of course industry secrets there are strong rumours that for card issuers, working from the opening/closing dates of accounts and the spending on cards their ability to determine who is a churner and who is not a churner is, in two words, not good. Consequently the restrictions that issuers use to try and stop people taking them for a ride are somewhat blunt instruments. Chase’s 5/24 rule and Amex’s once-per-lifetime rules certainly fit this description.

Clearly Amex’s UK have decided to change their sign up bonus rules in order to cut their losses to churners. In deciding to do this (I assume!) they have worked out how many churners they think they have, and how much spending is run through their network by people who churn and how profitable those customers are. Hopefully they have also modelled how these people will react and are happy that Amex will be the winner from the change. However, given that they are trying to guess how many there actually are of the churners, which we know is difficult – they could easily be wrong.

Moreover, there are people who gently churn cards, and could still easily be profitable to Amex who are affected by this too. People will spend less on Amex cards as a result of this and, Amex will be expecting a drop in volume through their network. But it is possible that their expectation of by how much it drop is an underestimate, particularly if they have underestimated the scope of the gentle churners who simplify their card portfolio – particularly if they start using one single Mastercard or Visa instead, particularly as in the UK acceptance of Amex’s is weaker than the others.

Why does this lead to light at the end of the tunnel?

In my opinion there is a non-zero chance that a similar situation ends up arising to the way the Amex runs its once-in-a-lifetime scheme in the US. Yes – the sticker says that you can’t have it – but they will send you targeted offers anyway. It seems to be relatively common that targeted offers get sent out. Particularly for the Platinum card where they would love that sweet sweet Annual Fee, my hope is that despite the rules saying otherwise, if the models are wrong on how many people drop their volume on Amex cards then it would make sense that Amex tries a similar sort of strategy here. In fact – it may already be in the plans to use targeted offers on customers who drop their spending substantially.

So whilst the overall picture is still pretty terrible, and the restrictions do massive kill the plannable game for most of the churners, there is at least a fool’s hope that Amex will offer targeted bonuses to save us.

Plotting for Shower Class.

Last year I did a round the world trip in 6 days, mostly off the back of the Alaska Airlines 50K USA-Asia reward sweet-spot on Hainan.oct18
At some point I will get around to writing up a report on that trip, but for now the planning for the next crazy journey has begun. The main flights I want to take are A380 first class on Etihad and Singapore. The first for Shower Class, and the second for Singapore’s Suites. However I am neither American so cannot abuse use their banks for buckloads of miles nor super wealthy, so this have to be done efficiently.

For Etihad, the obvious answer is an AA partner award. I say obvious, clearly to someone not deep into this hobby it wouldn’t be obvious at all, but given all the different way of getting oneself into an Etihad Apartment, between Abu Dhabi and London or Paris, the best option is clearly AA.
aa chart

Pulling up their award chart shows the 62.5K Europe to Middle East or Indian Subcontinent. There is a slight issue here in that I don’t have any AA miles and getting them in the UK is not the easiest…however… AA is known for its mileage sales, and they allegedly go as low as 1.72 US cents per mile. Now I doubt I will get it that low unless I buy more than need, but at current exchange rates, I can expect to pay about £900 for those miles. And as you will see later, I will be transiting onto that ticket through India, so the taxes are minimal, and AA covers the fuel surcharges, so £900 is basically the all in price. Clearly this is not an amount of money to be sniffed at, but for a 4hr flight in Business Class, a few hours in the Etihad lounge in AUH, and then 7hrs in an Etihad Apartment it really doesn’t seem bad value to me.

So, I need to get to India to start the Etihad experience. Casual browsing of the Singapore A380 routes shows that they run daily A380 flights to both Mumbai and Delhi…interesting. And the Saver award in First Class is only 53K miles on the Kris Flyer award chart – for a 6hr flight: not bad. And as an Amex MR rewards transfer partner they are also not too hard to get hold of, even for non Americans. And 53K miles lines up perfectly with the UK SUP of 35K and then a referral for another 18K. Excellent. Singapore doesn’t add fuel surcharges so even better.

So now I need to get to Singapore… my first thought is to go the long way round and do another Alaskan Award but I don’t have the miles or any way of generating the miles short of buying them all = no. Hmm. Need to get from Europe to South East Asia… Aha. Etihad Airways to the rescue – with their bizarre Czech Airlines sweet spot. 26.5K miles and £150 in taxes in fees for a lie flat seat Prague – Seoul. That at least gets me in the right award zone for programs that work zonally. Not the world’s sexiest business class but a lie flat bed and an under reviewed product and precisely the sort of nutty routing that I like.

Getting from the UK to Prague is easily solved with a sprinkling of Avios or an LCC flight. But for Seoul to Singapore, something better is in order – the ability to use another sweet spot I’ve been looking at for a while. I’ve started to collect some Aegean miles as a result of their low Star gold qualification (and even lower requal) and their inter Far East zone awards, at 21K for Business one-way are a stormer. Either a 6.5hr direct flight on Asiana or Singapore’s regional product, or throw in a connection for 7.5-8.5 hrs in some combo of those two and ANA, Eva, or Thai, Shenzen, Air China. Star Alliance has plenty of options and outstation connections too. Fuel surcharges and taxes always under £60 meaning at 1ppm, it’s around £30-35 per hour flying in Business. Not bad.
So all together we have this:
suites and apartments
Total Cost
53+26.5K MR points
21k Aegean Miles
£160 YQ, £70 taxes
£900 to buy AA Miles
£40 to fly to Prague.

Sum = £1170 + 79.5K MR +21K Aegean Miles = ~£2200

For approx. 21 hrs in business class and 13 hrs in Suites/Apartments.
I’ll take those numbers.

Virgin Companion Fares Part 4. Cherry Picking?

After I had finished writing the first part of this series it did occur to me that using the Gatwick – Barbados route may have appeared a little cherry picked, as it has two features that should help the value of the companion fare I was arguing exists. Firstly, it is a low competition, high fare route. In comparison to the Virgin network’s main focus in the continental US, with the carnage that is TATL economy yields at the moment, cash tickets to Barbados are far higher. Also – Gatwick means the departure taxes from the UK are a little lower than most of Virgin’s routes out of Heathrow.

Both criticisms are pretty fair, so I am going to fire up Excel again and delve into to both LHR – New York Kennedy and LHR to San Francisco, to see if my argument still holds any weight on routes that should be unfriendlier to it. I am going to do things slightly differently however, rather than just assuming a mile is worth 1p, for each cash ticket price I will calculate the savings made by using a companion reward in relation to booking two cash tickets, and compare that to the net miles outlay – ie, the mileage cost of the companion reward + the miles not earned from the 2nd revenue ticket – to generate a pence per point value for the using miles at that cash ticket price.

Again, I will be comparing the companion fare to economy classic cash prices, and not light ones. My reasoning remains the same – firstly the mileage ticket can only be booked into Classic so it makes it a fairer comparison, and secondly, that at an extra £100 buy up, the added benefits of seat selection, checked baggage, some flexibility, the extra miles, and the ability to add upgrades later; I remain of the opinion that the vast majority of people should be booking into Classic anyway. [And if you really must fly at the absolute lowest cost, buy into economy light and use a bunch of miles to take 0.6p off per mile – but that’s not a good idea.]

So firstly, New York. Before we get to the graphing let’s just have a brief overview of the price landscape. On Virgin/Delta direct flights, the lowest pricing for Economy Light starts at £273, and that price is widely available outside of school holidays. Therefore Classic is also widely available for £373. OneWorld are also at that price for their Economy Basic product, which is essentially the same as light, but their buy up to normal economy is only £80 return, though I don’t think includes seat selection. United are also pricing from £274 (although it too is fairly well available) with normal economy and seat selection also only an £80 buy up. So, the lowest price seems to be around £350 for normal economy experience you would get on a Virgin mileage ticket. However, at peak times the story is very different. In the first weeks of the Summer School holidays prices are essentially twice as high. For normal Economy its at least £650+, even connecting in Amsterdam or Munich would only bring it down to the high 500s. For reference, the taxes and fees on direct Virgin flown award tickets are £270.

To the pretty pictures then:NYC companion

Takeaways from this are that even at the lowest cash prices on the route, directly comparing to Virgins price of £373, the miles are generating savings of 0.75p per point. Whilst this is not a fabulous redemption by any means – it is certainly around the value many people’s lowest acceptable redemption is at – especially considering that for many Virgin collectors the alternative is avios, and the opportunities to redeem avios at above 0.75ppp seem to decrease daily. Then if we look at the 1pp threshold, it is reached at cash prices at the still very low price of £410 on off peak dates. If you are inside the 21-day advance purchase window for the very cheapest fares it is likely that a companion reward will generate excellent savings. Similarly, if there are peak dates involved, the thresholds for 1ppm are only around £450 and £500 respectively. These are still very low if the peak reward season combines with higher cash prices, for as I discussed earlier, cash prices in the holidays for this set of direct flights will be over £650, “miles” above the threshold.

Next, let’s look at San Francisco, as it fits into the highest band of award costs, and the cash prices are still often affected by the current TATL bloodbath. Outside of school holidays, Virgin pricing seems to start at £304 for Light, £404 for Classic, although that is not widely available and £340/440 is more common. United is offering a more widely available £284/364 combo. American/BA are mostly around Virgin/Delta prices. In the holidays, prices become £800-900 for midweek-midweek or £1200 and up for Saturday – Saturday. The taxes and fees are slightly higher on award tickets at £300.

SFO companion

This one is slightly less positive for the Companion reward. At off peak times, United’s £364 price is too low for the companion reward to compete (assuming you value the 50% distance miles earnable in any number of Star Alliance programs at 1:1 with Virgin miles – if not then this fare should be considered £50 more expensive but that is is still too low to get more than 0.5p per point). However, if you don’t want to fly United, Virgin’s common low of £440 still produces value around the 0.75p mark, which is not terrible. The thresholds for 1ppm at £500/550/600 are all prices which at relatively short notice or shoulder season the cash fares will be above.

One caveat here is a reminder that it is a mistake to see the higher and higher pence per mile value as cash prices increase to think that it means that companion rewards should always be used even as cash prices skyrocket, because that forgets the fixed prices of normal awards tickets. These graphs only show the implied value of the points relative to the using cash, not relative to the cheapest way of booking the flights. At very high cash prices, if 2 reward seats are available then they will be a cheaper method of booking than buying cash tickets, which reduces the saving from using a companion fare, and so reduces the value per mile.

A second caveat is that when using a companion award, the cancellation/changes fees are far lower than on the revenue tickets, which may provide value, but it is very much on an individual basis what that value is. As such, it is not reflected in the maths behind the graphs, although it would mean that the miles are slightly more valuable than their valuation given in this exercise at each price point.

In Conclusion,
– Even with the comically low fares in Economy Light, as long as you were going to book up into classic anyway, you can regularly get 0.75ppm and better using the companion award
– The thresholds for the companion reward way of booking two tickets achieving 1ppm are low enough that any slight increase in cash fares will bring them at or above that level
– This remains true when Peak dates are involved.

Virgin Companion Fares Part 3. The Premium Cabin.

This is the third post in my series on the Virgin Companion reward tickets. In the 1st post I argued that using a companion reward is a great way to use miles and will often get you the “cheapest” economy Classic ticket – even when cash prices are moderately low! In the 2nd post, I discussed how that saving makes the apparently great deal of upgrading up to Economy Delight from Classic actually a poor deal. This post will consider the following scenario: like most transatlantic flights, on the way out Barbados the flight is fully a daytime flight.. but the return is very much a night flight, leaving Barbados at tea time and landing back into London at the crack of dawn. This means that many people will be interested in mixing and matching – going out in economy and coming back in Premium to aid sleeping. So how does the companion fare influence the options available to do this?

[This post is neither short nor simple. I do summarise its findings at the bottom.]

As far as I can work out, there are 4 ways to book an Economy Classic seat for outbound and Premium on the return; (1) pay cash both ways at the going rate, (2) pay cash for Economy Classic both ways, use miles to upgrade the return leg, (3) Use normal award tickets and (4) One ticket in cash and the other as a companion award.

Firstly, let’s get all the relevant mileage costs noted down. A normal award ticket, at off peak times is 27.5k miles and £311. If peak dates are involved that will increase to 37.5k or 47.5k. The upgrade is either 8700 miles or 13,700 if you are returning on a peak date. I believe there is an extra £41 YQ that would be charged when upgrading (although it may only be £10, it depends if they use revenue ticket YQs or award ones. If you know, please comment with it!). Finally the companion method will be 13.7/18.7/23.7k miles, and £311, plus the cash ticket naturally.

However, doing the analysis is more complicated than the comparisons in the first two posts as there are more variables in this scenario. We need to care about the *absolute* cash price of Economy Classic, and of Premium, to compare to the Award ticket routes, and we also need to care about their *relative* prices for comparison to the upgrade route. It is also further complicated by the fact that the cheapest premium class fares booking into K class, which is not valid for use with companion fares. All of this means a sensible and clear conclusion is not the easiest to tease out, but nonetheless I think I reach something close to that! We will progress by a two-stage process.

Firstly, I shall look at the “absolute” category options, and show for the various price points which of those is the best option. Then in the second stage, I will show the tests required to check the conditions under which the upgrade route does not produce better value than the best “absolute” category method.

The next three graphs will compare the options at off peak/mixed/peak times of paying cash outright, award tickets and using a companion reward. Because of the K Class issue, there will be two lines for the companion award, one assuming that the cheapest cash ticket at that price was not in K class, and one assuming you had to pay an extra £200 over the cheapest premium fare in order get out of K class and be eligible to add a companion reward. When reading the graphs, it is important to remember that the yellow and grey lines (which represent those two possibilities) only make sense if they are mutually exclusive. If the only “lower cost” option than the yellow line at that price point is the grey line, then it can still be considered the lowest cost option – as it will only exist in reality if the conditions mean that the grey line cannot exist.

Premium Companion OPOP

Two points are of importance – firstly 2 reward tickets will almost always be cheaper than any of the other non-upgrade routes. I cannot find a month in 2019 where the combination of economy out, and then the lowest companion fare bucket, H class for the return, prices at less than £800. Outside of an excellent sale, which would probably only lower the K class price anyway, being in the left side of the graph and on the grey line is highly unlikely. Secondly, if getting two award seats isn’t possible due to a lack of availability or lack of miles, but one seat is – then the companion fare is quite likely to be better than 2 cash tickets, even if a buy up is required. The crossover point between the red and orange lines, which represents the point at which a companion reward becomes cheaper than outright cash tickets even if you have to buy up into to a higher than available Premium bucket, is at a cheapest possible cash price of £700 and lower I could see for all of 2019 – means that the companion reward will generate excellent value if only 1 award seat is possible.

The story is a little different if the flights are not both at off peak times however.

Premium Companion POP

As all of the award ticket prices have gone up, straight cash is a little more competitive, but as the normal award seats go up in mileage the most, their range of being the best option decreases a bit. A non-K class inclusive ticket in the range £800-925 is certainly feasible so there will be times when the companion fare is lower priced than two reward tickets. However the most important take-away from this graph is that at mixed peak/off peak times – if K class is the lowest available Premium booking class, and the buy up required to use a companion reward is approximately the £200 I have assumed, using a companion reward will almost certainly provide poor value, as the yellow line is constantly higher than the Cash line or standard Awards line.

Finally, the graph for peak:

Premium Companion PP

Again the increase in award costs challenges the normal award tickets the most. Especially considering once the cheapest cash combination ticket is over £875 it is reasonably likely that no buy up out of K will be required, a companion fare is probably the cheapest option until after the crossover point between the blue and grey, at around £1075. Also of note from this graph is possibility that if peak dates combine with low cash prices and the necessity to buy up then cash could conceivably be better than a companion reward.

So in summary so far what we can conclude is that most of the time, between the three options considered so far, using 2 award tickets will be best more often than a companion reward, but both of them will usually be better than cash tickets. However, we still need to check this against the upgrade route.

As a reminder, the mileage upgrade has to be done from a Classic or Delight ticket, and will cost £40 in YQ and 8700/13700 miles if the return flight is off peak or peak. Comparing it to the normal mileage award is fairly simple. As the award tickets are a fixed cost, and the upgrade a fixed cost, there will be an easy to calculate the price of Economy Classic ticket for each of the peak/off peak combinations at which both options have the same implied cost, taking into account miles earned back from the revenue tickets. At any Classic price below this, then the upgrade route should be used, and any price higher, normal awards used.

[For this I will assume that all the bought economy class tickets bought will earn 50% miles, because if they were expensive enough to earn more, the would already be far too expensive to compete with the award tickets.]

Upgrade check on award

The main takeaway from this chart should be that the tipping point cash price of Economy Classic are all at the low end – especially the first two. However we also know that the best time to be using award tickets is when prices are high, so it is unlikely that it will simultaneously be the case that the price paid tickets will mean that Economy Classic is cheap enough to make upgrading worth it, yet the higher price for premium on the return leg makes Award Tickets cheaper than a companion fare. Indeed, more rigorously; the following chart shows the minimum price difference between Classic and Premium needed to make Award Tickets be the best option of the original 3.

Upgrade check on award pt2

The one way price difference to be £300-450 and up will be quite rare. So we safely can conclude that as a general rule, when award tickets seem the best route, they will remain so.

Finally, let’s check the value of the upgrade route when the best option appears to be a companion reward. Working out the relevant equivalent and non-equivalent costs here is a little more complicated.

Person 1:-

Outbound Choice: Paid Economy Classic fare OR Paid Economy Classic Fare
Inbound Choice: Eco-Classic ticket + £40 + 6.5/11.5k net miles OR paid premium earn 4.2k miles
 Net miles difference = 10.7/15.7k
 Cash difference = Premium leg – E.C leg – £40 = Return leg pricing gap – £40

Person 2:-
Either: £311 + 13.7/18.7/23.7k miles OR Economy Classic Return Price + £40 + 6.5/11.5k net miles
 Miles difference = negative 7.2/12.2k miles
 Cash Difference = 311- E.C return – 40 = 271 – E.C return

On all peak/off peak combos except for Off peak out, Peak return this will give the following:

3.5k miles + 271 – 40 + Inbound leg pricing gap – E.C return
Which gives: 266 + Inbound leg pricing gap – E.C return
So we can say that the tipping point for which is best is when:
Inbound Leg price gap = Eco-Classic return price – £266

[In the specific case of Off peak out, peak return, the net miles will be 5k more in favour the upgrade route and hence that £ residual will become £216]

If we graph this relationship then the region below the frontier line will show the price combinations for which using a companion fare is better than doing a points upgrade. That graph look like this:

max inbound price leg

Two points of note – firstly, at even moderately high cash price the upgrade route begins to require a very high price gap to Premium to remain an option. Secondly – at low cash prices however, particularly when we consider that the inbound price leg difference will have to span the jumps to both the K bucket and then to the H bucket, the gap may be above the 230-250 range it needs to be for upgrading to provide better value – although this will be the substantial minority of cases.

So Summary – what has this exercise shown?

– Using 2 normal award tickets to book straight into Premium for the return remains of good value, far more so than if booking both ways in Economy. This confirms the common wisdom that miles become more valuable the further forward in the plane they are used
– However when cash prices are low, or if peak dates are involved, that using a companion reward has excellent potential to provide value, even if you have to pay extra to book H class
– The buy Economy classic and upgrade using points option is unlikely to provide good value.

Well done for making it to the end. Anyone who says the mileage world is simple is rather wrong..

If you feel I have made a mistake in the maths/graphs, or take issue with any of the assumptions, or have any other thoughts do let us know below.