First class upgrades have become nearly non-existent. Delta says only about 12% of their first class seats go to upgrades, while 15 years ago, 81% of first class seats went to upgrades, awards and employees. That may all be about to change.
American, Delta and United have all become adept at selling coach passengers upgrades to first class for tens of dollars, sometimes as little as $40. Delta will even sell long haul business class for as little as $299 more than coach.
U.S. airlines have done a complete 180, preferring to take the smallest cash payment from a once a year flyer over rewarding their most frequent, high revenue customers. I remember my jaw hitting the floor when United marketed a $59 upgrade to me by telling me the number of elite customers waiting for a complimentary upgrade I’d be jumping ahead of.
Yet there the supply of premium cabin seats is about to grow significantly.
- American Airlines is going to be adding a lot of premium seats to its planes. For instance, American’s new 787-9Ps will have 51 business class and 32 premium economy seats. Their Boeing 777-300ERs will be reconfigured with more business class. And they’ll be adding first class seats to their Airbus A319s.
- Delta is also going to be adding premium seats.
- JetBlue is going to introduce a domestic first class cabin.
- Even Frontier is going to be adding first class.
Delta plans basic business class precisely because they expect an increased supply of premium seats. They don’t want to drop the price of these seats for everyone, including customers that would pay more. So their bet is that they can segment premium customers and charge different prices – high prices to those willing to pay for everything that they can get today, and lower prices to fill seats for incremental passengers who will only get part of the current product bundle. This also pairs with their efforts to use AI for ‘personalized pricing’ to extract as much revenue as possible from each seat and customer.
However, holding everything else constant, more premium seats should mean either:
- A lower price for premium seats, which can already be quite low at times
- Unsold premium seats, available for upgrade.
And everything else won’t stay constant. There are macro factors which could dampen demand for premium seats.
- Whether the premium shift is truly secular and permanent rather than cyclical. Coming out of the pandemic there’s been an increased willingness to pay for premium seats. Some airline executives date this further back, which leads them to believe that the trend will endure. However this is far from a certain conclusion.
- Any economic downturn could hit premium demand. When the economy falters, travel demand and premium travel demand declines. That’s bad for the world, but generally good for award travel and upgrades.
- These two factors are correlated – a downturn could lead to a lasting shift in preferences.
Upgrades have been tough to get because premium demand has grown while the supply of premium seats hasn’t kept up, and airlines have shifted their merchandising to take less money for those seats from any willing buyer rather than honor frequent flyer upgrades.
Upgrades could become easier to get as an increased supply of premium seats come online, and if we see any shift in consumer demand for premium, potentially exacerbated by any economic downturn.
It’s not just more premium capacity, it’s the actual hard product that matters. American’s 321s with Flagship First and Business are becoming dated. Delta’s 767-300 business class is ancient. Looking forward to American’s new 787s and Lufthansa’s Allegris. Some of Turkish’s a330s are awful, broken recliners for 10-hour flights is awful. Quality and quantity improvements are sorely needed across the board.
The days of complimentary upgrades might not be coming to a complete end but it’s going to be far more difficult. The bottom line is if first/business is important to you then pay up.
Responding to @John, you are absolutely right about the quality of the hard product. But, I’m quite optimistic about hard product upgrades. As the industry moves into the post-COVID era, many airlines have sorely dated interiors but do have upgrades in the works. A key challenge has been and continues to be supply chain constraints for premium cabin seats/suites. (Not for economy seats.) But, what is rolling out is nice. You mention LH’s Allegris. The newest generation of J seats on AA, AF, and BA are all nice. That being said, Delta’s B767-300 might be the stickiest booger to flick. Those won’t be upgraded . . . they’ll be replaced . . . and likely that won’t be for years.
@Fred
Thank you for that feedback. Ironically, as old as those 763s are, I find they do at least have better overall leg room. Some airlines try to be innovative, like Finnair with its new ‘up-right or fully lie-flat without controls’ (which I did not care for), or Singapore’s a359-ULR, business class, sorta similar and has a small, angled footwell; for an 18+ hour flight, I suppose anything can get old after a while. Regardless, these premium cabins are a privilege, and I try not to take anything for granted. It certainly beats no-recline shell-of-an-economy-seat with just one small bottle of water included like on Icelandair. Still, if it gets you there safely, relatively timely, and affordably, there’s merit in that too. Safe travels.
A dated first class seat is vastly preferable over any economy seat.
I’m too thicc and too sophisticated to sit in an economy seat.
Any additional premium capacity will just be monetized as well, as long as people slavenly continue to be loyal despite a lack of benefits.
I pay (cash, rarely miles) for all my F/J experiences. My preference is for that seat next to me be empty rather than given to someone with status. But, that’s the airlines’ call, and I understand the give away. I’m booked on a AA 319 with 8 F seats. It gives me great pleasure to see two dozen or more people on the waitlist to upgrade. It’s rather petty of me, but I’ve had bad experiences with upgraded pax in F.
Unless AA deploys the wide bodies on domestic flights, the increase in premiums seats won’t improve the chance of getting an upgrade due to status. Maybe it will be easier to use SWU.
If those with “status” were paying, only .5% would have status. A bunch of loudmouthed pretenders. Let them actually pay. If not, quit complaining. Better yet, if you’re so important, fly private.
Buisness class is too expensive and Premium economy doesn’t work. I wish airlines would create a seat just like my recliner at home. I would be happy without the bells and whistles if I could just be comfortable without lying flat. Anyone with sleep apnea will tell you the best rest is in a slightly tilted position with the feet up.
@Art Howard
Premium long haul is slightly better than domestic first at times
And it is just a reclined bed with a foot rest – this is SO essential on long hauls
Don’t act tough with a VIP , SWU , or complementary confirmed upgrade lol
very annoying as an Exp to not at least be offered the low cost upgrades which I would often be happy to pay for. Free agency seems like the way of the future!
Would love to see these tens of dollars upgrades you get keep referring to Gary. My lowest has been $200 and most are upwards of $500, recently $350 for a 2hr flight on an E175 which I ended up getting a complimentary upgrade to anyway (my first in a while and definitely not worth 350!). No doubt they offer lower cost to higher status than us on the lowly AA Gold and UA Silver status.
I’m all up for monetizing upgrades rather that “giving them away”. This is coming from someone who is closing in on 2 Million Miles on AA alone.