I used to think 500 mile upgrades made sense. I no longer do — although I still don’t believe complimentary unlimited upgrades for all elites make sense.
American is the last airline using the 500 mile upgrade certificate model. Gold and Platinum members earn (4) 500 mile upgrades for every 12,500 qualifying miles flown. If they want to upgrade more than that, they can buy additional certificates. (Executive Platinum members get complimentary upgrades for themselves, do not earn 500 mile upgrade certificates, and have to use those certificates to upgrade their companions.)
American Airlines New Boeing 737 First Class
The reason this made good sense, why I liked it better than giving all members complimentary upgrades, is simply that there’s not enough first class seats to go around. This was a way to ration those seats. Not every Gold and Platinum would request an upgrade every trip. So the times a given member did request it, when it mattered most to them, their chances of actually get the upgrade went up.
A Platinum might not care about DC – Chicago (which takes 2 certificates). That just means the chances of a Gold getting the upgrade are better.
Last year, as they brought US Airways Dividend Miles (which has the complimentary unlimited model for all elites) together with American AAdvantage, they adopted a hybrid system — complimentary unlimited upgrades on flights up to 500 miles, 500 mile upgrade certificate-supported upgrades on longer domestic flights. It’s not uncommon for me to see 40 or 50 people on the upgrade list for my short Dallas – Austin flights. (It’s also not uncommon to see that many on the list for my Thursday 5pm DC – Dallas flights, but that’s another story.)
There’s two other changes that have happened.
- American has raised the price of 500 mile upgrades from $30 to $40 apiece.
- The price of buying first class outright has gone down.
When first class cost $750 or more one-way, $150 in upgrade certificates off of a $200 fare represented a decent value. You were getting the leftover seats, but you were getting them for half.
But with first class often sold for no more than $180 – $220 more than a coach ticket, getting that first class seat confirmed at booking (and earning bonus miles and double elite qualifying miles) seems a better deal than spending $150 on upgrade certificates if there’s leftover seats.
Let’s look at Dallas – Las Vegas. I pulled up fares on a random date and find American selling first class for $159 more than coach.
Or since it’s 1055 miles, it takes (3) 500 mile upgrade certificates costing $120. A confirmed upgrade, bonus miles, and double elite qualifying miles costs $39.
Now that’s not always the case. A lot of it has to do with the number of upgrade certificates required for a route. With no grace mileage, a trip just over 500 miles or just over 1000 miles takes more certificates and is relatively costly. Maximize those certificates and you can do better.
I still do think a priority system makes some kind of sense rather than a free for all. But raising the price of upgrade certificates at the same time that the price of outright buying domestic first class seats made little sense and undermines the model. If anything, the price of an upgrade certificate ought to fall along with the price of the seat itself.
Granted, a higher price should limit demand for upgrades. But with a price so close to buying the seat and when upgrades come with neither the frequent flyer program benefits nor the flexibility (such as for same day flight changes) of a paid ticket the math just doesn’t work.