At the beginning of the year American stopped offering much confirmed upgrade space in advance, even for domestic flights. Systemwide upgrades have been harder to use since US Airways management took over, but now they’re tough to use even domestically.
The frequent refrain from commenters — and indeed their bet — was that if upgrades were harder to confirm the airline would sell more seats. There are two ways this happens.
- If they were giving out too many upgrades, some seats were given away ‘free’ (to customers spending a lot in a year, rather than a given trip) that could be sold on that flight instead.
- Customers who can’t get the certainty of an upgrade might buy the seat instead
American Airlines reduced the value of the single biggest perk of top tier elite status by making upgrades harder to get. They frustrate customers trying to use their miles for upgrades. So there’s a cost to the strategy. But if they’re selling more first class seats because of it, they might believe the tradeoff was worthwhile.
Here’s the thing: We now know it wasn’t because fewer confirmed upgrade seats has not turned into more purchases of premium cabin seats.
How do we know this? The President of AAdvantage says so. At American’s media and investor day at the end of September Bridget Blaise-Shamai said that “the number of upgrades redeemed this year has been steady year-over-year” though she reports that they’re just “redeemed closer to travel.”
She means this of course to assure that customers aren’t really worse off. But they are. An upgrade confirmed at booking isn’t the same as a battlefield upgrade sweated out at the airport.
If I really want the upgrade and I can’t confirm it American may think they’re encouraging me to buy the ticket — but if I’m just going to buy the higher class of service (hint: I’m probably not), then why on earth am I likely to buy it from American? My benefits have failed me, and I’m simply likely to buy even a premium cabin ticket on schedule and price.
However the point is this: if American is still redeeming just as many upgrades as before, they’re providing a worse customer experience but the same number of seats are going to upgrades rather than selling more seats. They’re harming the customer experience, reducing the value of AAdvantage miles and elite upgrades without getting a revenue benefit in return. Smart.