People often ask if it’s a better use of points to buy a business seat using points, or pay for an economy seat and then upgrade with points. Here’s the answer – using flights to Auckland as an example.

There are two ways to calculate this, but I think this is more accurate and conservative.

Looking at Virgin Australia business class from Sydney to Auckland, you’ll be paying around $1,237.66 return when booking 9 months in advance. The same flight and class would cost you 71,000 velocity points plus $183.66 in taxes (remember to never pay taxes with points, unless you have so many points you don’t mind wasting them.)

To calculate the value of your points for this scenario, it’s:

Cash cost of the flight – cost of taxes for points booking / points for points booking

So (1,237.66 – 183.66) / 71,000 = $0.015

Upgrading from economy, you would be paying $377.66 for getaway fares plus 32,000 for the upgrades.

If we take the value of points from the last scenario of $0.015, this option would effectively cost you $377.66 plus (32,000 x $0.015) = $852.70.

The other way to calculate is to see how much it would cost to buy points, and do the same calculation using that value of a point. I find this exaggerated though, because you will always pay more for points when you are buying them outright compared to using points you already have.

So what?

Assuming you are booking far enough in advance and that there are business award seats available for your flights, you get better value from your Velocity points if you pay for economy and then upgrade with points. This 1 example shows you are better off by ~$385. Not to mention, you would also earn Velocity points and status credits for this option.

The exception of course would be if you have too many Velocity points and you need to just burn them. What an awful problem to have!

*Please keep in mind these calculations are based on a selected popular route as a particular points in time. If you have any questions on these calculations, please feel free to contact me and I’ll be happy to look into it.