Frequent flyers stick mostly with one airline and build up status. In return, they’re promised better treatment by their airline. The most coveted benefit is upgrades. In the U.S., if the airline doesn’t sell first class seats they say they’ll hand those out to passengers in the order of their status.
This was a consistent benefit flyers could count on for years, and it kept them loyal. They’d buy less convenient flight schedules, take connections instead of non-stops on another airline, and pay more for tickets to stick with their preferred carrier. But the upgrade benefit is almost gone.
Flights aren’t selling first class tickets at full price. Airlines are practically giving the seats away to any passenger that wants them – instead of giving out upgrades to customers spending $10,000, $20,000, $30,000 or far more.
When airlines won’t sell out first class, they pitch the seats as a buy up to anyone on the plane for tens of dollars. Here’s the cheapest upgrade offer I’ve ever seen, and it’s from Delta: $26.88
A reader had purchased a ticket, and about 15 minutes later they pulled up the seat map and were offered Chicago O’Hare to Detroit in first class for just $26.77 more.
This isn’t for a long flight, and buying first wouldn’t have been that much more on the segment – but it still would have been over twice as much. The cheapest upgrade I’ve ever been offered by an airline is $40. There’s a message here from Delta – your loyalty is worth less than $26.77. (This customer is a SkyMiles Diamond Medallion.)
There’s an interesting strategy, though, that this opens up for customers who want to fly first class but will take a deal on it if possible.
- I’ve often said that you can buy a coach ticket, see if you get a discounted buy up offer, and if not cancel the ticket and apply the credit towards the purchase of first class. Now that there aren’t change fees on most basic economy tickets, you usually have this flexibility.
- But it’s even better. Delta is offering discounted buy ups right away, immediately after you purchase. Here, the offer was available 15 minutes later. And within 24 hours of purchase you can cancel a ticket for a full refund.
- So buy coach on the flight you’d like first class, see if you get a discounted offer for first class. And if you don’t just cancel the coach ticket for a refund and buy first. Worst case you get what you were willing to pay for, but you may save.
At the same time, when an airline is willing to sell an upgrade for $26 on a cheap ticket, rather than offering as a complimentary upgrade to a customer spending $30,000 a year on tickets the value of the status isn’t so great anymore.
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.
The value of status, now, is better help when flights are cancelled and delayed, and extra legroom coach seats. Having status is better than not having status, and higher status is better lan lower status, but mid-tier status is probably the sweet spot now since that’s enough for those extra legroom coach seats, free checked bags, and boarding priority to avoid gate checking your carry-on.
At the end of the day, though, airlines have made clear that they’d rather take $26 today than your business over time – and that includes your credit card business that helps to earn that status. I am not sure that’s a great idea.
AA EP flyer here. I think you are right- the only status that matters is if (actually when, lol) things go wrong. And once you get to a certain level, it doesn’t make sense to be loyal.
Perfect case in point- I am flying from PHL-ORD this Wednesday. I prefer to fly 1st when possible. Coach on any airline is $560/round trip (my fault for booking later). AA wants $1,060 for 1st, United only $750.00. I’m flying United (and interestingly enough, starting to get status with them because of what AA is doing).
Even the ‘kiddie’ flights (Orlando), where I was always upgraded are now hard to come by. And 1st class systemwide upgrade upwards? Practically non-existent, even 8+ months out (unless you want to take a 3 segment flight crisscrossing the country when you just need to get from PHL-DFW)
AA continues to downgrade their miles and rewards, and for the 1st time, I took out a cash rewards card instead of putting everything on AA.
-Jon
Any Elite would jump at the chance to get a guaranteed upgrade for $12
Sounds like a deal to me. Always check if cash or points is better (or about same) with a better class of service. Not just Delta; all airlines. Have seen this plenty of times with American, too.
If anything, this is more indicative of a recession, or that it’s a down-time before the holiday travel heats up. Who knows. Either way, please wildly speculate on here. (Bonus points for memes. That’s what Xi said!)
Ed is now selling upgrades for less than the price of “Premium” hair gel…
This is why extra legroom economy matters! I don’t need to fly FC on that short route but it’s nice to be in the first row of extra legroom economy. Most legroom on these planes is the B seat in the first row of extra legroom economy.
And this is also why AA is making a big mistake not having more MCE seating and decimating the category on its newest planes. This is the main perk of loyalty now other than a better phone line to call. Loyalty – and card spend related to loyalty – is the main driver of revenue! If it doesn’t exist, why should my loyalty?
They are said to have started to use AI to determine fares. This contention “your loyalty is worth less than $26.77” is also subject to AI analysis. If quantitatively correct then customer loyalty, at the margin, is indeed low.
If loyalty is dead with Delta, they brought it on themselves. Their international award redemptions are so expensive, compared to the competition, that you might even call it “usery”.
https://www.delta.com/elevateyourstatus
No you got it all wrong, Gary. Delta has a price for status!
@Peter — MCE! US261! Citi Nights! *wink*
I may have posted this before. I still can’t believe when I booked SEA-LAS on DL a couple months ago for a trip starting next Sunday I paid $340 round-trip for first. It was offered during initial booking – I didn’t have to wait! Talk about an easy decision. See you around, Alaska.
Actually I can’t blame airlines for this. Most elites aren’t paying their own way, their company is paying. So why reward someone for other’s decisions? US airlines killed loyalty when they went revenue based, then pissed on the loyalty grave when they took away benefits like upgrades. If you’re actually making an effort to earn US airline status, you’re a cuck.
I have to admit, as a pax who flies only F and on my dime, I get some pleasure from knowing I’m seated next to a pax who paid a small $ amount to upgrade, and there’s a guy angry in coach because his upgrade didn’t clear. It is wrong; but it does give me pleasure. Others have said it, and I agree, if you want F, book F. BTW, I suggest that airlines now realize that give aways to encourage loyalty cost them more than loyalty generates. What are you going to do, drive ORD-LAX? If no airline rewards loyalty, they save bucks, but the pax come anyway.
@Jon Biedermann — I also prefer to fly first! 🙂 (in all seriousness, interesting anecdotes)
To your point @Peter, I just looked up the upgrades on my pending Delta flights and I can upgrade to Comfort for $15 so that perk might be/could get nerfed too :/
@Quark — Whoa, nicccce (borrowing @1990’s South Park meme).
I still have a 80+% upgrade percentage as a diamond medallion. Just avoid ATL and pick your flights carefully and your odds are still pretty good, particularly with the reserve card.
This is nothing new Gary. It’s been happening for years. You have even written about it years ago. I became a free agent years and years ago, partly for this reason.
I am flying from DTW to MCO on Dec. 10. I purchased a comfort plus ticket. I just checked and I can upgrade to first class for $295.
I am flying again from DTW to MCO on Feb. 1. on a comfort plus ticket. I just checked and I can upgrade to first class for $618!
I don’t know where you get your $26 from.
Does anyone know if Delta, or other airlines, offer better prices for paid upgrades to elite members, or if the cost is the same for everyone?
This is a no-brainer. Buy the upgrade for $26. You can easily drink 2-3 glasses of alcohol. One pre-departure and one or two drinks in-flight, even on a short Chicago-Delta flight (a little more than one hour in duration). Grab a handful of snacks from the basket and take them with you for the kids or family back home.
Two things are mentioned in the post and comments and bear repeating for emphasis. (1) some of those seats up front are going to pilots, which further degrades availability, and (2) it’s nice to have status with IROPS. I might have missed where mention of loyalty-based credit card revenue (rather than “butts in seats” travel) is a significant driver of airline profitability. If spending on the card doesn’t get you status (and upgrades) then folks may migrate to cards with a better ROI (transferable points, cash back).
I like the strategy of buying coach first and see what offers you get.
Lets see what the new AI forecasting does for that model going forward.
I have Silver status on UA and grabbed $72 upgrades from EC+ to FC one day before departure. LGA to ORD.
seriously, Gary?
You find one fare on a short segment and develop an entire thesis about the value of upgrades?
No one is denying that DL and other airlines are selling upgrades rather than giving them as elite upgrades – but don’t you think you need a whole lot more data points to be even close to accurate?
but maybe being accurate isn’t really your goal – grandstanding is.
and it has nothing to do with Delta but rather accurate data analysis.
@Tim Dunn – this isn’t one fare, I’ve written about similarly-priced Delta upgrades before and American upgrades @ $40, this is very common