Business Class to Dubai for the price of economy. Is it possible? Absolutely; here is an example of a recent trip I took with my two teenage children.
We departed Vancouver in late July on Lufthansa, changing planes in Frankfurt for Dubai: At the time, one-way business class tickets were showing at between $9800 and $12,500 (per passenger). Please know I love my children… but that wouldn’t happen. However, I did in fact, purchase business class tickets from Vancouver to Dubai on Lufthansa for $1750 + GST. How? By following the rules:
Rule 1: You are more likely to find a discounted Loyalty Ticket Than A Cash Ticket
Airline Loyalty redemption tickets are offered on a mileage reward chart basis and/or “market” or dynamic prices. And in some instances (for example, American Airlines), only on a market or “dynamic” basis. The mileage chart pricing is usually much more favorable than market pricing, at least in high season or at last minute. And this makes sense as last-minute pricing is usually more expensive than tickets purchased far in advance. Market-based pricing attempts to mirror (with exceptions) the actual cash prices offered on a daily basis. This practice is designed to supplement or replace the mileage chart redemption tickets by opening up a huge variety of tickets that would not otherwise be available for redemption and better reflect demand pricing. Here is how they each work:
Mileage reward chart redemptions:
We will use Air Canada’s Aeroplan program as an example though all airlines that offer both mileage rewards and market rewards more or less behave the same.
Here Aeroplan’s mileage chart and the section showing flights from North America to the Atlantic Zone:
The point to note here is that higher classes of redemptions are relatively cheaper than economy on a point/dollar basis. Business Class is often less than twice the price of economy when purchased with points on a mileage basis!
2. Market pricing reward redemptions:
You will see from the next example (market pricing) precisely why the best value is to be found in higher class redemptions and why airline loyalty programs are so valuable.
Here is an example of an April 16th search for a one-way Vancouver to Dubai.
Again, notice (first flight displayed) that in the point redemption chart, the Business Class seat is only 33% more than the Economy Class seat (437.3 points vs 328.2 points) but the cash price of the Business Class seat is almost twice the price of the Economy Class seat.
Also, notice that the (second flight displayed) Business Class seat displayed is much cheaper than the Business Class seat offered in the first flight displayed (267.4 points vs 437.3 points). Yet the cash price for both of these tickets is the same, $7989.00. Also, the Business Class seat is priced at 2.7 x economy price (267.4 points vs 99.1 points) and 5.3 x Economy Class seat price in cash ($7989.00 vs $1506.00).
We can conclude, as a general rule, that higher seat class redemptions (Premium, Business etc) represent better value per point on both mileage chart and market price redemption basis. Keep in mind that while airlines usually offer their own seats at both mileage chart and market prices, their partner seats are usually only offered upon mileage chart pricing (airlines that offer reward dollars allow you to replace cash dollars with Reward dollars on a one to one basis; for example, Westjet and Westjet Dollars. Westjet does offer special exclusive fares in each seat class that can only be purchased using Westjet dollars).
In the example above, Vancouver to Dubai, most Business Class seats were priced at 400,000+ points because it was high season and quite last minute, thus leaving only Air Canada market priced seats available. However, I found Business Class seats being offered by AEROPLAN for 100K points on an Air Canada Star Alliance partner airline, Lufthansa.
In this instance, the point redemption ticket price based upon the mileage chart was only a fraction of the cash price for the ticket: 100K points vs. the cash price of $9800.00
Therefore, Rule No. 1 saved me $6125.00 per ticket. ($9800 - $3675)
$3675 equals the cost to purchase AEROPLAN points at the retail price of 3.5 cents/point plus GST.
Rule 2: Airlines Offer Periodic Incentives to purchase points.
Airlines are now periodically discounting their point purchase programs or offering discounted point subscriptions.
For example, an AEROPLAN point, as of the date of this blog, costs 3.5 cents to purchase. But Air Canada now periodically offers bonus points as inducements to purchase AEROPLAN points. In the example above, I purchased my points during an Air Canada promotion that granted an additional 100% bonus points. (I have seen 85% and 75% bonuses too. Below is a new and very attractive Aeroplan point offer that allows you to buy points at an attractive discount and also offers specially discounted point redemptions.) In my case, I was lucky and received a 100% bonus when I purchased the points required for this trip. Therefore, I paid half the average sale price of 3.5 cents + GST, 1750.0 + GST per ticket.
Therefore, Rule No. 2 saved me an additional $1837.5 (1750 + GST).
While I used Air Canada AEROPLAN points in the example above, the practice is becoming common in the industry. For example, British Airways has a reduced AVIOS point purchase program based on a monthly or annual subscription. An Avios member can purchase up to 200,000 points at an app. 40% discount. Westjet recently discounted their loyalty program, WestJet Dollars. Here are some examples:
Rule 3: Keep a cache of points on hand for periodic loyalty point discounts.
In the example above, I got lucky; I found an inexpensive Business Class seat being offered through AEROPLAN on a partner airline, Lufthansa, and, as if that were not enough, at the same time Air Canada was offering a promotion on AEROPLAN points. But that was just luck. The secret is to have a cache of points on hand so you can jump on discounted flights when they become available. You can’t game this; you just have to have the points when opportunities arise. And if you follow the next rule, you really can’t lose.
Rule 4: Buy points when their purchase value is close to or less than their redemption value.
Point purchase programs were traditionally aimed more at travellers short of the points required for a ticket, not those wanting to purchase the entire ticket with points as an alternative to paying cash. That is why the purchase cost is generally higher than the redemption value (the actual value of the points.) If you only need a few, who cares. At least, that’s the way it used to be. Airlines now see the point sale channel as an additional source of capital and as a tool to build loyalty. It’s a win-win for the airline and you.
What do we mean by the “redemption” value of a point? Just divide the cash price required for any ticket by the number of points required to purchase the same ticket, and, on average, you will determine the redemption value of the point currency.
ie. $500.00/25,000.00 = $.02 or 2 cents.
In the case of AEROPLAN™, we estimate the redemption value to be the app. 2.1 cents. For example, an AEROPLAN point costs 3.5 cents and has an approximate redemption value of 2.1 cents. In the case above, my point flight was discounted so much that I could have paid even more than the retail price for the points and still saved money.
You can take advantage of periodic opportunities by stocking up on airline points whenever their purchase cost is close to their redemption value. Remember that tickets purchased with points do not earn points themselves, and points purchased attract GST. Therefore, to be really safe, try to buy slightly below redemption value.
In this way, you will always have points ready to take advantage of periodic discounts while at the same time being indifferent to straight-line (undiscounted) point purchases.
In my real-life example above:
Rule No. 1 saved me $6125/ticket, and Rule No. 2 saved me an additional $1875/ticket ($1750 + GST).
Rules 1 and 2 together:
saved me $7962.5 per ticket. ($9800 - $6125 - $1875 = $7962.)
So stocking up on airline points when offered at a discount is a no-lose proposition. Even if you never find a screaming point deal, you can always use the points for what amounts to the retail price anyway. But you will find that deal - especially if you are looking to fly Business Class.
To get a general idea of your points’ value, you can register (see link below) at bnwtravel.com to access our point calculator in your personal traveller profile. As a bonus, registered users also get our Hotel Concierge feature at no cost!
If you book with us, we provide a hotel concierge service that will show you which bookings qualify for recognition. Once you have made your choice, we will book and monitor your booking until the last day of cancellation to ensure you are notified of price drops. Plus, you only pay for the direct hotel booking and receive full-service travel agent attention. Hotel Concierge is not publicly available and only for registered travellers at bnwtravel.com and is a personal service.
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