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.

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