With American Airlines planning to let AAdvantage members pay for upgrades using miles as cash at low value because it’s so hard to use miles for upgrades today, it really underscores how fare airlines have gone in eliminating the upgrade benefit for frequent flyers.
They didn’t used to sell first class at a discount. You either paid up, or the seats went empty – and those empty seats were filled with upgrades for frequent flyers. Ten years ago that meant around half of seats upfront were available as upgrades.
Now, airlines would rather take ‘tens of dollars’ in incremental revenue from a once a year flyer than offer the premium seat as a complimentary upgrade to someone spending tends of thousands of dollars per year on the airline.
Airlines now sell cheap upgrades for those tens of dollars, instead of encouraging long-term loyalty. $40 paid upgrade mean complimentary upgrades aren’t available – which in turn means the most powerful motivator of repeat purchases (status) disappears. $40 revenue can cost the airline thousands in ticket purchases as customers just buy the seat they want – on another airline, whatever is most convenient.
I’ve said forget upgrades, just take the buy ups. American Airlines even now awards miles and status credit on the buy up amount. But I’ll take it a step further and explain how airlines offering these buy ups actually discourages passengers from buying first class outright (and you should consider this as a strategy to buy first class for less).
The elimination of change fees during the pandemic mean that you should consider buying coach instead of first class.
- See if you get a cheap upgrade offer, the famed $40 upgrade
- If you don’t, you can still apply the full value of your ticket towards what you wanted in the first place
- Just cancel and use your credit to buy first class if no upgrade offer is forthcoming
Of course it is possible that the price of first class goes up in the meantime (it can also go down, and since prices of airfare shift all the time, another tactic is to keep monitoring the price of your itinerary after purchase and if fares drop, reissue your ticket for the difference in price and get a credit to use on future travel).
American First Class Meal
Now, sometimes first class is so inexpensive you should just buy it outright. The difference between first and coach can be less than the cost of seat assignments and checked bags on a coach ticket, with those benefits bundled with the first class fare. (Delta may unbundle those things, charging for seat assignments and bags on premium tickets in the future.)
Delta First Class
This doesn’t just work on domestic flights. It also works for international. Coach passengers can sometimes upgrade to business class to Asia on American Airlines for as little as $350. Delta has that beat, offering upgrades on flights from Europe to the West Coast for as little as $299.
The truth is that there are two ways that airline willingness to sell cheap buy ups has a cost to them in revenue. First, it encourages flyers to buy cheap tickets and pay for an upgrade instead of spending more for the seat. Second, it sacrifices long-term customer revenue for a small fee on a single trip. Airlines report this as increased revenue for their premium cabin, but those models don’t fully incorporate revenue losses – and unsurprisingly, you get what you measure.
With AA I sometimes buy First outright when the difference between coach is nominal or monitor the cash upgrade offers and jump when it becomes reasonable. I have no issue with paying for First. I don’t expect a business to give it’s product away for free and whether you like it or not this is a permanent feature.
The days of almost automatic upgrades for AA EXPs are gone.
The upgrade cost on an LAX-TPA United non stop is $1250, the first fare is only $1,105.
But good to check anyway.
The cycle goes: Business travelers get travel perks, causing non-bus travelers to want them too. Non-bus travelers start copying them en masse (see the hotel industry e.g. Hilton Diamond), devaluing the playing field for those who do this professionally. Then the bus. travelers figure out a new avenue while the non-bus travelers fight like pigeons in the street over a crumb of bread.
Same thing is happening now with Airlines. The big 3 upended the game and devalued status so much that there’s no outsized value in having top tier status anymore. When everyone can spend their way to top tier status, then top tier status is meaningless. The non-bus travelers who got suckered into thinking they can spend their way to the top will start realizing this in ~5-10 years and the game will be forced to change again.
I believed they track your habits before offering upgrade deals.
I only fly first. Mainly Delta because I’m a hub captive.
But there were a few times where I had to buy coach and waited to see what the upgrade charge would be.
It was always outrageous. Typically about $150 to $200 per hour of flight.
Most recently it was $850 to upgrade MSP to SFO.
Cheaper to just buy the first ticket outright.
But maybe it’s because they track me and know that I’ll buy first regardless
Maybe as a high status flyer you’re getting offered the upgrades cheaper than others. After all these offers are generally tailored (some complex computer algorithms no doubt that look at previous flying and patterns of buying upgrades etc). They’d probably rather some extra $$ from you (and other top tiers) than offer it you for free. I fly semi regularly but not often enough to get high status. I fly to Europe several times a year, the lowest offer I’ve ever had was $750 to J and more often than not $1000+. I was offered $350 one way from LGA-YHZ which is insane for a crappy E175 with an upgraded snack as the only “food” served on that flight. I think the lowest domestic offer I had was $120. So *you* and other top status members might be getting offered a sweet deal to tempt you to pay up rather than risk a standby list of a dozen eligible for upgrade – but the rest do not necessary get such offers.
Gary, United upgrade fees are non-refundable. No credit if cancelled; not sure if you can change flights. Perhaps mention that more clearly in your post.