Why Business Class can be Cheaper than Economy

Why Business Class can be Cheaper than EconomyPremium airline cabins normally command a significant price premium over Economy. But, occasionally, Business class tickets are in fact cheaper than Economy!

AFF members have discovered multiple examples of Virgin Australia Business fares that were cheaper than Economy class on the same flight. So, why does this happen… and why would anyone still book an Economy ticket?

In one example, an AFF member found a Virgin Australia flight from Canberra to Melbourne selling for $629 in Economy class. But Business class on the exact same departure would cost only $449.

Another member found flights from Sydney to Christchurch starting at $489 for Economy class, while Business would have cost $462.

Although it is rare, it’s possible for Business class flights to be cheaper than Economy in situations where Economy class is heavily booked but Business is not. This is because the most flexible Economy fare classes are often more expensive than the cheapest Business class price point. As the Economy cabin fills up, airlines will close off reservations in the cheaper fare classes leaving only the more expensive fares available. Meanwhile, if there is no change in the Business class price, it could become lower.

If we have a look at Virgin Australia’s fares from Canberra to Melbourne using Expert Flyer, for example, we can see that there are several Economy class fares which are more expensive than the “I” class Business ticket. (The cheapest Business fare class is less flexible, though, as it has a 30-day advance purchase requirement.) Note that the fares listed below exclude taxes and airport charges.

Virgin Australia fares from Canberra to Melbourne, as shown on Expert Flyer
Virgin Australia fares from Canberra to Melbourne, as shown on Expert Flyer

On the Canberra-Melbourne route, Qantas’ cheapest “D” class Business fare is slightly more expensive than the full “Y” class Economy ticket, meaning this situation would not be possible (outside of special sales).

Qantas fares from Canberra to Melbourne, as shown on Expert Flyer
Qantas fares from Canberra to Melbourne, as shown on Expert Flyer

However, this is not necessarily the case on other Qantas routes.

Even in these situations, some people will still book an Economy class ticket. This could be because they’re simply unaware of the savings available. But it’s often due to antiquated company travel policies that only permit employees to fly Economy.

Interestingly, Qantas has taken steps to prevent this situation on trans-Tasman tickets. In April, Qantas began offering new discounted Business class fares between Australia and New Zealand. But the cheaper Business fares are only offered if there is availability in certain discounted Economy fare classes. This means that the Business class price will become higher if Economy is full, even if no Business tickets have been sold. American Airlines and British Airways use similar revenue management techniques.

Join the discussion on the Australian Frequent Flyer forum: Cheaper to fly Business that Economy

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Matt Graham
The editor of Australian Frequent Flyer, Matt's passion for travel has taken him to over 60 countries… with the help of frequent flyer points, of course!
Matt's favourite destinations (so far) are Germany, Brazil, New Zealand & Kazakhstan. His interests include economics, aviation & foreign languages, and he has a soft spot for good food and red wine.

You can contact Matt at [email protected]