TPG reader question: Should I redeem Avios for business class or purchase a premium economy fare and then upgrade?
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One of the most valuable uses of miles and points is to redeem them for long-haul, premium cabin flights. You can usually obtain well above TPG’s valuation of these miles and points when redeeming them in this way.
You have two options for securing that comfortable seat with your miles and points. You can either book a business or first-class seat with miles and points (called an award seat, or a redemption), or you can purchase a cash fare seat in a lower class and use your miles and points to upgrade.
What is the better option? This brings us to this week’s TPG reader question.
Am I better off buying economy flights from London to Cape Town, South Africa using Avios and upgrading later, or is it better to buy business-class seats straight away using Avios?Linda, TPG Reader
The availability rules are the same using Avios for either option. If there is a Club World/Club Suite seat available using Avios on the flight that Linda wants, she can use her Avios to book it, whether that’s a redemption or an upgrade.
Let’s have a look at the cost in both Avios and cash to see what would be the better option.
As long as travel is so uncertain, I’ve picked a sample date well into next year when hopefully Linda can travel freely to South Africa.
Option 1: Purchase economy flights and upgrade with Avios
An important rule to note is that you can only upgrade with Avios one cabin class. So, in order to use Avios to upgrade to business class, Linda would need to book a cash fare in premium economy and then upgrade with Avios.
On the dates I’m looking at where there is Avios availability to upgrade in May 2022, premium economy cash fares on British Airways are £1,203 return per person from London to Cape Town. She would then need 30,000 Avios to upgrade to business class each way, so 60,000 Avios in total. Linda would also need to pay approximately £103 in additional fees, taxes and surcharges for the upgraded seat.
Using our valuation of Avios of 1.1p each, the total cost of booking the seat this way would be £1,966 (£1,203 + £660 + £103).
She would also earn Avios and Tier Points for the premium economy cash fare she purchased. That means 100% flown miles as Avios, so her return flights to Cape Town would earn 12,038 Avios as a Blue Executive Club member (more if she held status), reducing the cost further.
Option 2: Redeem Avios for business class
The dates I’ve searched are off-peak, so the cost of redeeming a seat in business class outright would be 62,500 Avios each way per person — 125,000 Avios in total, plus fees, taxes and surcharges of £600.42.
Using our valuation of Avios of 1.1p each, the total cost of booking the seat this way would be £1,975.42 (£1,375 + £600.42).
Linda would not earn any Tier Points or Avios on this option as it is a pure redemption, not a cash fare.
Both of these redemption options are a great use of Avios. Business-class cash fares on these flights are £2,622, so Linda can obtain even more than our valuation of Avios redeeming her Avios on these flights.
In Linda’s case, it would be slightly better value to purchase the premium economy cash fare and use her Avios to upgrade to business class, especially as she would earn Avios for the cash fare she purchased.
Of course, if you’re considering this, make sure you do the calculations to ensure you’re getting the best value from your Avios and cash. Each flight may be different, so be sure to do your due diligence.
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