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.
If this is how AA operates, it basically says NEVER purchase AA first class since you open yourself up to a scam. Sad and certainly a horrible customer experience.
I don’t give a shit what the contract of carriage says. If I pay $2,500 for F and the coach seat they gave me involuntarily sold for $1,000, I’m entitled to $1,500. Whether that’s 40% or 60% or 2% or 99% of the original fare doesn’t matter. I paid for one thing, involuntarily received another, and I’m due the difference. It’s so simple as to be beyond any type of ridicule or disagreement.
WWDD – what would Delta do?
Sometimes there still is a bit of a competitive market in city-pairs, even if it is imperfect. This is another (of many) reasons I book around American.
How totally AArrogant.
What others have said — just get reaccomodated to a later flight. That’s what I would do. I’m sure as hell not flying transoceanic in coach.
I just added a comment to the complaint in support. I’m not sure why the folks making irate posts here didn’t do the same, only a couple of comments therre.
AA may as well be the guy in a dark alley who puts a gun to your head and takes your wallet, cash, CC’s. Only difference is AA won’t shoot you. (Because left Alice they can screw you over again in the future)
To all the posters saying ~ ah, no biggie…just get re-accomodated.. that doesn’t ease the pain to the traveler who is out several hundred dollars for missing the first night or two in relation to their hotel.
“because, left alive”
An argument in favor of just booking the cheap seats.
Hey @Brent, I’m with you on the class action lawsuit against AA, but please don’t drive them into the ground forever. I’m working on 4 million miles with them and have roughly a million in reward miles, so having AA go bankrupt would be a disaster. @Lamont was right, the lawsuit needs to go after Isom and whomever is behind this, they need to suffer significant consequences.
@ Gary — Have a back up plan, have hotel status so you can have the no-show waived, or just cancel and go home. You gotta be flexible, but you also gotta be willing to stand up for yourself. On most transoceanic flights, there are nonrevs somewhere in the front. Asked nicely for the pursurer to swap tham for your broken seat, etc. Demand what you paid for. If AA screws you, find a way to screw them back.
I’ve been there and been screwed with a downgrade where they quoted the “current” Y fare is now X which was more than I paid months earlier for F. Sorry, no refund, (although I did get $12 once.). The, “book on the next available flight”, is a joke around holidays when that may be three or four days later and no assurance you won’t be bumped again.
The idea that there is actual competition in the airline industry is nonsense. Anybody within range of a hub is trapped in an oligopoly that should be regulated by the government.
This policy absolutely infuriates me. As long as it is in place I will NEVER fly American on a cash ticket, regardless of price or schedule. As a larger man (I am 6’3″ and have very wide shoulders) I book first class for both my own comfort and the comfort of other passengers around me. To then get downgraded to coach would inconvenience and humiliate me (the passenger next to me would get mad that I inadvertently encroach on their space). Then you add insult to injury by only refunding 40% of the fare difference, punishing me for doing the right thing and being considerate to others!
In my opinion a cabin downgrade is really a form of involuntarily denied boarding. It cheats you out of the cabin you wanted (by the time you reach the gate it is functionally too late to just book first class on another airline at a reasonable rate). The airline should be obligated to pay either 400% of the fare difference (based on the first class price on the day the flight was purchased minus the best available economy rate on the same day) or to rebook the passenger on a later flight within two days in first class and to pay for the passenger’s food and hotel in the meantime (along with an inconvenience fee). If DOT treated cabin downgrades as analogous to IDB then American would quickly fix its broken seats.
I gave up on AA a few years ago and stopped flying with them. Now, I’ll definitely never use them.
Didn’t Edelman just lose his lawsuit against Harvard?
I clicked the link to the DOT but it says the case is closed for comments. There were only 4 listed that I could see.
Sigh.
On the one hand, I’ve totally seen situations where the non-basic Y fare is negligibly lower than the F fare.
On the other hand? If I get downgraded I’m just refusing the downgrade and demanding rerouting/rebooking.
From now on when I book a flight, I will take a screen shot of all the fares. If downgraded after purchase, I will have visual evidence of the prices and therefore the exact amount of what the refund should be.
I’ve started buying coach, then after it tickets go back and up-fare to J/F. I figure this way if I need to do a charge back I have proof of the price dif between coach and J/F. I luckily haven’t had a downgrade issue, but this new policy is given me pause to buy anything other than cheap, vanilla ORD-XXX domestic flights. We are planning on going ORD-HNL later this year and pay for F but probably going to go with United because of this policy.
@Lenora Johnson – does not appear closed for comments? https://www.regulations.gov/commenton/DOT-OST-2026-2377-0001
In most countries, when a service provider inconveniences you, they compensate you , often going above and beyond the cost of the service.
But here, AA are actively working to swindle you of your money.
And it also points to how less we have been trained to expect from our service providers. The best expectation is at most to be made whole again, after all the hassle and time spend on a situation entirely of AA’s doing.
It says 40% or as required by applicable local law. The DOT website you linked to says that “If the downgraded consumer continues to travel on the flight, the consumer is not entitled to a refund of the full airfare, but the airline must refund the difference between the original fare and the downgraded fare.” And the complaint cites those applicable regulations.
So in the US you should still be able to get a refund between the original fare and the downgraded fare (even if airlines can play games with that because they take the cost of a fully refundable economy booking and compare that to discount business, etc. to show that you are entitled to peanuts). Whether AA will ever offer that up, of course, is the problem. But perhaps in other jurisdictions without contravening applicable local law they can just do a 40% calculation – and whether folks factor that into their own calculations when choosing to fly with AA is up to them.
Matthew, I ran into this same issue in Q4 2025 (downgrade due to weather delays on a 4,000+ mile work trip where I couldn’t wait a day for a reserved seat in J). I had to battle like crazy with them to get a fair refund.
Iberia sold me a premium economy award seat, then removed that cabin from the flight, downgrading me. They refunded me nada despite several online complaint filings. No points, no money. I finally deduced that they had processed my refund for zero according to their defective algorithm. I’m ashamed to say that they wore me down with their policy of not allowing conversation with a human being.
@Beachguy: “I just added a comment to the complaint in support. I’m not sure why the folks making irate posts here didn’t do the same, only a couple of comments there.”
When I previously filed a complaint with the FAA regarding a misattribution of the cause of a flight cancellation, I received a copy of AA’s response to the complaint that I deemed to be threatening. To my knowledge, FAA took no action regarding my initial complaint or AA’s response.
When you all have finally had enough, remember, we can regulate these crooks into submission. Until then, its wild to watch some of you continue to cuck for greedy corporations in your spare time. The railroads played such anti-consumer dirty tricks and games back in the day. Now airlines do the same. For delays, cancellations, denied boarding, oversold flights, etc., please see: EU/UK 261, Canadas APPR, bringing back Rule 240, each of which are a nice start. Or not. Keep shilling.
@ 1990 — OK, you may now preach!
It doesn’t make sense. Most people do reservations online rather than calling because it incurr other charges. It’s obvious the 40% rule is absurd. It needs to be overseen by the DOT. If they made great gains, so why to put passengers in jeopardy.?
That is theft and if paying with a Credit Card and you don’t get what you paid for, Cresit Cards typically stand behind the buyer. People need to start complaining more to their Attorney Generals and DOT.
A great public service but i fear the filers (or fliers) do not have standing???
AA is quite slimy. A recent consumer dispute went to the supreme court here in maine wherein their counsel advised the justices that neither the COC nor terms require AA to issue a boarding pass! CLEGG v American airlines.
I too noticed the carveout for “local law.” I would say federal law is obviously not local law. But local could mean US, UK, etc in which federal law would be local.
@Gene — In addition to advocating for consumers and workers, my pleasure is to call-out those who attack them.
Like, seriously, if anyone is spending their personal time to go onto these sites, at the very least, don’t help greedy corporations take advantage of us by sane-washing their pretzel logic.
*incoming: libertarian ‘free market’ losers, who knowingly help Big-Airline ram it, WAY-UP-THERE, no-lube*
Brent, you propose a class action. Alas AA’s COC purports to disallow class actions, instead requiring passengers to agree that they will sue individually.
What a bunch of crooks! Plus they’ll take your money and give themselves a nice bonus, at your expense! This should be illegal! Isom and Seymour need to go!
Seems like a real incentive to never buy an upgraded seat and just hope you score an upgrade. I know I will think more than twice now before purchasing an upgrade.
Easy solution, just don’t pay your cc bill the extra amount they steal from you. Or fly JetBluey.
Wow, was debating between AA and Delta for a 1st class ticket BOS-MIA.
Thanks for helping me make it N easy one!
Having a giggle over the various ‘well, the answer is have status like me, both hotel and airline, duh’ and ‘we should really do something, but maybe not too much? My millions of miles are what’s important here’ comments.
Never change, guys.
This is one of the reasons I no longer fly AA. Coupled with poor customer service, I only fly AA as a last resort.
Just one of a thousand reasons I’ll never fly American.
@Gene — JetBluey… kiddos love it!
There is no way that the people saying oh no big deal, wait around three days for the next available flights are not AA plants.
Gary, when’s the last time you had a typo free article? Slow down, bucko…
I rarely fly American because I usually have other, more direct choices out of my home airport. Based on this information, I’m going to change “rarely” to NEVER.
@garyleff — Have you reached out to AA about this? As far as American corporations go, they seem well above average these days in treating their customers fairly. If someone bought a $1000 first class ticket when the coach price was $200 — and was then downgraded to coach — I am certain corporate would want to refund the $800 difference, and maybe a little extra as an apology. I would be SHOCKED if they wanted to “steal” the money. As you know, many things in the “contract of carriage” are not actually enforced. What does AA ACTUALLY do in this situation, and what does their management team say the policy should be? There’s no way they’d say “tough luck” on this.
None of this problem would exist if AA had negotiated their pilot CBA with the customer in mind. A collecting bargaining agreement should never come between customers and the company, and by insisting on bumping passengers from first/business so they can take passengers’ seats when deadheading, the pilots created a problem they could not foresee because they think only of themselves and not the people who pay their paychecks. A simple solution would be to allow pilots to book directly into first if there is inventory at the time a deadheading reservation is made but not to allow bumping. It also seems that AA is plainly overbooking first and business, and that was always a no-no in the past. I sincerely hope AA’s corporate customers push back hard on this, since it is mostly their travelers who are impacted.
I just left a comment on the DOT complaint. My friend and I bought first class with AA. They downgraded us to coach. After jumping through hoops I was told we each get 196.00 out of the 700.00 upcharge. I disputed it with my credit card (AA affiliated), and they found against me so I filed it with Consumer Financial Protection. After months, the credit card gave us each 500.00. It took hours and hours and they made me mail in hard copies of everything and many nonsense things to make me give up but I didn’t. Still out money and my time but better off in the long run.