Conventional wisdom used to be that the most lucrative way to use miles was for upgrading paid international coach tickets to business class.

That’s because you would accrue miles for the paid travel, plus earn status. And because upgrades require fewer points than a free ticket, you stretch your miles further. 



Unfortunately that’s no longer true.

• Upgrade awards have become harder to get
  
• Airlines have introduced cash co-pays in addition to miles, or restricted the fare class you have to buy, making upgrades far more expensive
  
• Award tickets have gotten more flexible, allowing you to combine travel on different partners
  
• While upgrade awards haven’t gotten nearly as flexible for partner travel, generally requiring purchase of a full fare ticket if the option is offered at all.

When you buy the cheapest ticket most U.S. airlines require cash co-pays that sometimes cost more than $500 each way, so you pay an extra $1,000 or more per person for the privilege of using your miles to upgrade on top of miles.

Cash co-pays are no longer even restricted to international flights, they apply domestically as well.

Delta hasn’t played this game, but they don’t allow you to upgrade with miles internationally unless you first purchase a nearly full fare ticket. That’s worse than a cash co-pay, where you pay extra only if you actually sit in business class. A minimum fare requirement is a ticket to a lottery. You pay more for your ticket, and if the upgrade is waitlisted you don’t get your overpayment back. There aren’t a lot of things airlines do that actually shock me, but taking your money for the chance of upgrading (they aren’t even required to fill all of the forward cabin seats if they don’t want to) and then keeping your money from your buy up to a higher fare even if they give you nothing more in return, is actually pretty offensive. And yet the Department of Transportation focuses its rule-making on insufficiently disclosed codeshares.

There are very few exceptions to the rule that upgrades don’t make as much sense as award tickets. British Airways upgrades from Premium Economy to business class, and the same with Virgin Atlantic’s offerings of the same, are exceptionally cheap in miles and do not require cash co-pays at all.

What amazes me isn’t just the upgrade fee of up to 20,000 miles and $550 each way that United charges for an upgrade between North America and Europe (American’s top price is 25,000 miles and $350 each way) , but that these fees have started to pile up domestically.

Matthew points out that United has just increased the price of upgrades on its New York JFK – San Francisco and Los Angeles routes. And the amounts are shocking.

Here is what United charges for its upgrades on US domestic and Hawaii routes.

United waives cash co-pays for full fare passengers and for elite members on non-premium routes.

Co-pay exemptions

• There is no co-pay for full-fare United Economy or United Business tickets for travel in any region.
  
  • A co-pay will not apply for Premier members traveling on the following routes:
    
    • Within the U.S. (excluding Hawaii, Guam and Puerto Rico) and Canada
      
    • From the U.S. and Canada to Hawaii (except between EWR/IAD/IAH and HNL)
      
    • From the U.S. (excluding Hawaii, Guam and Puerto Rico) and Canada to Mexico, Central America or the Caribbean
      
    • Within Oceania (except between HNL and GUM)

  • Non-Premier members traveling on the routes listed above are also exempt from the co-pay when sponsored using miles from a Premier member’s MileagePlus account.

But for non-elites, a basic domestic upgrade (confirmed at booking if space is available) costs 20,000 miles plus $75. For Hawaii it starts at 27,500 miles and $125 for the cheapest fares.

They have this higher price category for routes operated by international aircraft, and for the premium JFK transcons.

You can pay as much as $250 each way in cash on a simple domestic New York – San Francisco roundtrip, and $500 in cash each way on a Hawaii roundtrip if you’re flying on the routes they operate international equipment.

Upgrades aren’t what they used to be, and that leads to some perverse consequences as a result of relative prices.

Now, upgrade space can be easier to find than award space. But consider 40,000 United miles plus cash on top of your fare to upgrade a domestic ticket versus 40,000 Chase or American Express points transferred to Singapore for an award ticket with only $5 in security taxes… or 35,000 Lufthansa points for the same.

Much like Hyatt increasing the price of its points upgrades discourages me from spending more on room rates to be able to use points for a suite this change in relative prices males paid tickets less desirable m. That may not be good for United.

Although they could also even further restrict award space on these routes. But that just serves to further undermine the value proposition of the multibillion dollar MileagePlus program.

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