If American Airlines downgrades you from first class, they now say they will keep most of your money.
Upgrades are rare these days, with CEO Robert Isom confirming that they’re trying to upsell coach passengers rather than allow elite members to receive complimentary first class seats. So if you ‘want first’ you have to ‘buy first’.
Sometimes, though, you buy first and still don’t get to fly up front. American, more than other airliens, seems to fly around with broken first class seats. They also might swap planes for one that has fewer first class seats. Then they need to move passengers from first class down to coach. (American does say they plan to work on the broken seat problem.)
Three months ago, American Airlines updated its contract of carriage to say that when they downgrade a first class passenger to coach, they’ll only give back 40% of the money (“refunds are issued at 40% of the ticketed fare on the affected segment”).
This is inconsistent with DOT’s articulation of an airline’s obligation to “refund the difference between the original fare and the downgraded fare.”
- If you buy a $1,050 business class cross-country ticket instead of a $200 coach ticket and they downgrade you, you get back $420 – rather than the $850 extra you spent. This seems like a big incentive for American Airlines to oversell and keep the money.
- On an international trip it could be a $5,000 ticket in business class and a $500 ticket in coach (or less!). You get $2,000 back, instead of $4,500.
Last week, a Department of Transportation complaint was filed over this practice. You can submit a comment there on this issue for DOT to consider, if you’d like. When the agency knows that consumers care about an issue, that can balance any go along, get along with the industry (regulatory capture) that may otherwise exist.
This comes after American Airlines updated its full international tariff with this change in mid-May as well.
When a passenger holding a ticket for a higher class of service between an origin and a destination is downgraded to a lower class of service for any portion of such carriage for operational reasons or otherwise the amount of the refund will be an amount equal to 40 percent of the ticketed fare on the affected flight segment(s) or a refund value required by applicable local laws.
The complaint points out that 40% refunds are “untethered to reality” of airfare pricing.
- “[W]e checked the price of JFK-LHR, one-way, on approximately three days’ notice – representing a typical consumer on urgent business. AA’s lowest coach fare was $949, while the lowest business class fare was $10,644”
“It would be unfair for AA to require the passenger to travel in coach [after 40% downgrade refund[] for $6,386 on a seat that AA itself sells for $949.”
- “Cirium’s 2024 analysis of transatlantic airfares reports that the average transatlantic one-way coach fare in 2023 was $435, versus $1,845 in business class.3 With the average business class fare 4.2x the average economy class fare, appropriate downgrade compensation would be 76%”
- “Below are the average fares [from DOT data] on the three largest AA markets by number of business class seats sold”
The complaint alleges American’s practice is illegal and deceptive, and asks DOT to order American Airlines to follow the law requiring refunds of the difference between the fare paid and the price that was available for the lower cabin at the time of purchase.
American Airlines basically broke even for 2025 despite $52 billion in revenue. They’re under a lot of pressure to turn things around financially, despite higher fuel prices. One way of doing that in the short-run is to sell a product to customers, not deliver the product, but keep the money. It’s shocking that American Airlines seems to be publishing publicly their intent to do just that.
The DOT filing over American’s new rules, prompted by the change to their international tariff, was made by Ben Edelman and Mike Borsetti. They’re also the only reason that American even posts its full rules publicly online in the first place.
American previously argued that their website wasn’t a ‘ticket sales office’ (that a sales office is a physical place where tickets are sold, not just where most of their tickets are sold), i.e. that federal rules in place now for over 60 years which require the tariff to be available wherever tickets were sold was never made explicit that it included the web (the web didn’t exist then).
This is a MAJOR issue and I’ve personally been scammed by American Airlines on this topic. When you buy the ticket 1 month in advance, Economy is $400 ($200 each way), First Class is $900 ($450 each way). Then you get downgraded to Economy. I’d think I’d get a refund of $250 ($450 – $200 = $250) … but instead they say “well the Economy fare was actually $850 (the most expensive Y class fare bucket), so the refund is only $25 … That’s called a scam. It should be based on the LOWEST Economy fare available on the day of purchase, not the HIGHEST & on the day of departure. Sometimes Y Economy fares and higher than First class.
Do NOT complain to the DOT. Instead file a class action lawsuit against AA. Have the law firm have 30 day open windows for anyone who has had AA STEAL THEIR MONEY to join. Then go after AA with the express purpose of driving them into the ground, forever. Dustin got multiples of actual losses. They deserve to be made an example of fue to their open criminality and theft.
as long as AA happily allows me to rebook on any flight with J1 availability or offers a full refund for the remaining segments, I am fine with this policy. sometimes flights are overbooked in first/business for the reasons you state. it happens. i’d hope my AA status would help as well in who gets chosen.
Corporate crooks. They need to be sent to prison. The seem to get away with murder. Idiots.
I was on an international J AAdvantage award ticket in April, MAD-DFW-LAX. Due to a mechanical delay out of Madrid, I missed my connection in Dallas and the only flights back the same night involved a downgrade from domestic F to J. My initial attempt at getting some downgrade comp from AA basically resulted in a “pound sand” result. Only after being persistent did I get some miles back, which they classified as a courtesy customer service gesture, not as downgrade comp. Pretty ridiculous.
Let’s put a bit of truth into this. AA has been doing this for a while. If you are on paid first and downgraded AA will work with you to find availability in first. It MAY NOT be the next flight. As long as you’re flexible AA will not force you to take coach. I have never had issues being reaccommodated and only once because it was TUS/PHX did I just take the next flight in coach. (Got a whole row to myself on an A319).
If you’re on a paid upgrade AA will either refund the money or provide a travel credit. In fact, a few months back I had a paid upgrade, I got the CK desk to book me on another flight with one open first seat and AA still refunded me my upgrade charge as it was processed as a complimentary upgrade.
Now here is where it becomes tricky. Depending on the agent that you get if you’re on a paid upgrade they might confirm you into an open first seat like they would a paid first seat or you might get added back to the upgrade list.