Before I start, I have a disclaimer: I am a regular work-traveller.
In 2015, I was away from home for about 26 weeks. I mean, I usually made it home for at least part of every weekend (barring some of the longer trips) – but in terms of work-day weeks, 26 out of the 52 were spent outside of Johannesburg.
What that means:
- I definitely belong to a loyalty program (British Airways’ Executive Club);
- I’m a regular on the BA website, so I usually know when there’s a special going on; and
- I am now one of those people who tends to arrive at the last possible moment before a flight.
More embarrassingly, I sometimes delay my return flights to Johannesburg in order to avoid congestion at the immigration section in OR Tambo International. Because let me tell you, if you arrive on a Friday evening, that place is chaos (there’ve been days when I’ve spent more time in those immigration queues than I’ve spent in the air). I realise that it may not make obvious sense to delay a flight by a day in order to save an hour in a queue – but there we are.
Anyway, I now travel so often that I am occasionally tempted to sneak in a Business Class ticket on some of the longer trips, especially if it involves a layover.
Usually, this attracts a lot of snide remarks. People use hurtful terms like “spoilt” and “brattish” and “living a life full of comforts, eh?”
But this is unfair, because it’s sometimes quite mathematical (although, in the spirit of fairness, not entirely). And so I’m going to try explain some of that mathematical justification.
Firstly, what is the Rand Value of an Avios?
Other rewards programmes may use air miles or voyager miles or whatever, but on British Airways (and the other members of the ONE World Alliance), it’s Avios – and that’s what I’m going to use here.
So when I look at my own travel plans, here’s what I pay attention to when I’m thinking about Avios (I got these off the BA website this morning):
By far, my most frequently travelled route (two weekends out of three) is the JHB-HRE leg (or the return). So it’s where I tend to spend my Avios. And if I wanted to book a return trip that way, it would cost me:
- 8,000 Avios (the above figures are one-way, and I’m usually on an off-peak flight); and
- R750 in Reward Flight Saver fees.
The next question is, what would I normally pay for a return ticket to Harare? Helpfully, this:
So if I take that R4,729 normal cost, and deduct the R750 that I’d have to pay in Reward Flight Saver fees, my ‘saving’ with an Avios flight is about R4,000. And given that I’ll use up 8,000 avios on those flight – it means that each Avios I earn on a fully-paid ticket is worth around R0.50.
So whenever I’m looking at flights, and the ‘pricing’ of the different classes, I am bearing in mind two things:
- Yes, business class is a lot more expensive than economy class; but
- Business class also earns a lot more in Avios than economy (and the earnings increase as you go up the tiers in your loyalty program – but I’m just going to pretend that we’re on the lowest tier in this post).
Also, it’s worth pointing out that BA recently made changes to its reward program that guaranteed a number of reward seats on every flight. Before this, you’d earn a lot of avios, but not find any seats to spend them on. Now, you tend to earn less avios per flight, but you can almost always find a reward seat going (unless you leave it too late).
Some JHB-LHR-JHB Math
Okay, so, here’s the first scenario (Business Class Return to London):
So pretty expensive.
But then there’s also the Avios earned, which you’ll find below. Happily – because the quote here is for the one-way Avios earning, which you’d have to double to get the return trip earnings, and then halve to get the rand value because each Avios is worth around R0.50 – these numbers are actually pretty much equal to the Rand value of the full Avios earn on a return trip:
So provided that you’re a regular traveller and can use the Avios for other flights, the cheapest business class ticket to London in June will have an effective cost to you of R35,812 – which is substantially cheaper than R44,272. And as an aside, if you had Gold status on Executive Club, then you’d near-double your Avios earn, and you’d be paying an effective cost of R30,172.
Even with Gold, that’s still more than three times the price of a R9,879 effective economy return fare over the same time period.
So that definitely doesn’t make sense to me. And I’m much more likely to try for Premium Economy – which has an effective cost of R15,908, and earns me an extra 140 tier points*.
*the tier points might eventually push me up to a higher tier class, which would make the Premium Economy seats even more discounted in the future.
But the real benefits for this are actually in the ONE World Alliance, when you occasionally manage to score a special with one of BA’s partner airlines.
Stopovers in Doha
So I went onto Qatar Airways website this morning (the airlines belonging to the emirate states along the Arab peninsula are always a good bet for a special), and I found these business class return specials:
Now because Qatar Airlines is part of the ONE World Alliance, you can earn Avios on those flights.
So I’ve done a comparison of those fares against:
- A concurrent special for Economy Class fares on Qatar; and
- An economy class ticket for the same flight path in Economy on British Airways (yes, Economy – let’s remember that). Which is also apparently having a special at the moment.
So far, so good. I mean, clearly there are some specials that are better than others – but it’s definitely cheaper to fly Economy Class on BA than it is to fly Business on Qatar Airways (and the economy class fare on Qatar Airways is incredibly cheap by comparison, even though Qatar Airways’ economy class is definitely lite on the legroom).
But then there’s a Rand value for that Avios earn on each flight:
And again, we’re not surprised that Business Class on Qatar earns so well, because Business Class gets you a lot of Avios.
But now, once we net off all those free tickets earned in Avios points, you get this:
Notes (assuming that you’re a frequent flyer who uses Avios):
- For New York and Paris, it’s only double the price of BA economy to travel in Qatar business;
- It is over R1,000 cheaper to fly to Hong Kong in business class on Qatar Airways than it is to fly on BA in economy (although admittedly, a Joburg-London-HongKong trip is a bit roundabout); and
- It only costs an extra R330 to fly to Athens in business class on Qatar Airways than it does to fly in on BA economy. PLUS all those delicious Tier Points.
Look, I’m not saying that there aren’t cheaper ways to get to Athens (you could just fly on Qatar economy for about R6,000). But I am saying that ‘flying business’ is not always as spendthrift as it appears.
And if the business class ticket gives you a tier point uplift into the next class (where you earn more avios as you fly), then some of those business class specials are literally golden.
The Main Points
- If you’re a frequent flyer, there are really good reasons join a loyalty program.
- Some airlines have really great specials.
- Those specials are especially special when you fly frequently and can spend the extra air miles/avios.
- There are times when it’s cheaper to fly business than it is to fly economy (assuming that you’re comparing fares between airlines rather than fares on the same airline).
- But even so, that’s pretty startling. Because if we’re honest, and I said to you “There’s this deal where you can actually pay about the same to fly business as you would to pay to fly economy on a different airline but over a similar distance”, then you’d call that a damn good deal.
Rolling Alpha posts about finance, economics, and sometimes stuff that is only quite loosely related. Follow me on Twitter @RollingAlpha, or like my page on Facebook at www.facebook.com/rollingalpha. Or both.
Jan Havenga May 27, 2016 at 06:30
I share your experience to a large extent, but with some differences. I only fly business class, not caring what other people say and I’ll most definitely not fly long-haul other than business class. I live in Cape Town and used to fly 40 times per year to Johannesburg. That racked up quite a bit of Avios and points. These days I fly 6 to 8 times per year and used to fly BA, but discovered the Qatar deal, great, especially to avoid Heathrow, my clients are more willing to pay and because I’m so utterly fed-up with BA. Yes, most of my miles were earned on the Cape Town to London route BA, but no business class redemtion availability on that route. They freely admit that they’re not holding up to their promise, that is inherently unfair (I earned everything there) and that they’re not going to change it. They look like a bunch of crooks, plain and simple.Reply