The airfare upgrade option that most US airlines don’t offer

Airline passengers often find themselves at odds over many aspects of the in-flight experience: a reclining seat at knee level, groups of travelers asking others to change rows, and fights over cabins, between others. Now, on many international airline flights, there is a more civilized way to compete with other passengers: a seat upgrade auction.

How it works is quite simple: about a week before a flight, passengers receive an email informing them of potentially available seat upgrades. If they want to participate, they provide their credit card details and make an offer. If they win the winning bid, their card is charged and their seat is upgraded, often at a significant discount from what the upgraded seat would have cost at the time of original purchase.

While the concept has spread around the world, American airlines are mostly an exception. Spirit Airlines is offering upgrades to its Big Front Seat (which is exactly what it sounds like: a larger seat near the front of the plane) through its SeatBid program. But no other major U.S. carrier offers upgrade auction programs.

Major U.S. carriers will likely at least weigh the costs and benefits of the practice, says Zack Griff, senior aviation editor for travel site The Points Guy, since the upgrades are already built into the business model. But the auction model specifically raises significant tensions about how upgrades are offered today.

“Most major U.S. airlines offer several ways to enhance your flying experience, whether you’re looking for seats with more legroom, premium economy or business class seats. Traditionally, this includes three methods “You can redeem miles, cash in your elite status benefits, or simply purchase an upgrade like you would a regular ticket,” Griff said.

The auction model is different because it often offers deep discounts, and this approach relies on a truth about the economics of supply and demand: distressed inventory is always available as flight dates approach .

“In recent years,” Griff says, “the concept of selling distressed inventory – seats that would otherwise go unsold – at a blind auction has gained popularity.”

Companies like PlusGrade, which describes itself as being in the “ancillary revenue solutions” niche, have sold the technology to numerous carriers to make this offering available on many flights operated by international carriers.

Imagine yourself a week before your flight: you receive an email inviting you to bid online to participate in a seat upgrade auction. No calling an airline, no high upfront fees. You choose your own price, a meter tells you how likely it is that the bid will be a winner, and you leave it at that. Maybe you get the seat, maybe you don’t, but you’re in the game and you haven’t planned anything in advance. From the airline’s perspective, there will be the highest bidder, and those who don’t win the auction will be no worse off than before.

But not everyone wins, especially when it comes to how U.S. airlines reward their passengers today. Think of the conscientious pilot who collected and protected his points and elite status, partly in the hopes of receiving free upgrades. This person may be quietly holding their elite card, running their thumb over its edge, and feeling a little underappreciated. The airlines don’t want to alienate this person.

The largest US airlines, such as American, Delta And United, have not yet offered this type of auction on a large scale, likely because they are holding onto their premium cabin inventory for upgrades via miles, frequent flyer perks or last-minute purchases, a Griff said. “These airlines present upgrades as a key benefit of their loyalty programs. If they continue to sell the last premium seats to generate additional ancillary revenue, frequent travelers could switch to other airlines,” he said. he declares.

The American declined to comment; other U.S. carriers did not respond to requests for comment.

The upgrade pattern in the United States could change, but it’s unlikely to happen quickly.

Airlines aren’t known for being particularly tech-savvy — integrating AirPods, for example, could be a major breakthrough — but offloading the most expensive seats is going to become increasingly important, according to Griff, who says the traditional way of handling upgrades might not be the same. be optimal from the point of view of results.

While in the short term, the flights most likely to be associated with an upgrade request (longer international flights) are those most requested by U.S. travelers, there is another aspect of the new reality that will potentially last longer for a long time: a sharp drop in activity. travel that is likely to stabilize but unlikely to return to pre-Covid levels.

Scott Keyes of Going (formerly Scott’s Cheap Flights), an online platform that connects travelers with affordable airfare options, sees both the challenges and the potential of such programs. “The auction of unsold premium seats is, without doubt, a major trend in the industry. More and more airlines have adopted upgrade auctions for premium economy, business and first class seats that would otherwise would be unsold.”

For airlines, Keyes says the rationale is simple: Upgrade auctions generate far more revenue for airlines than handing out free upgrades.

Travelers who win these seats also do well in the process, since they often receive up to 70 percent off and more on a seat at the front of the plane, Keyes said. But that also leaves a loser who wasn’t even in the competition. “Travelers with elite status who, a decade ago, might have counted on being upgraded to otherwise empty seats,” Keyes said.

Perhaps a key to the potential evolution of how upgrades are offered is its wording: “ten years ago.”

“Now these seats are being sold instead of being given away for free,” Keyes said. “Many travelers seek elite status in the hopes – fair or not – of being rewarded for their loyalty with future free upgrades.”

If more airlines adopt auction practices, this advantage of elite status could disappear, although it would undoubtedly be replaced by other perks: for example, swanky private airport lounges.

Given the reality of upgrades within the airline industry and the changing landscape of business travel, it would not be surprising to see an increase in upgrade bidding from domestic carriers. future, probably satisfied by new ways of building customer loyalty. frequent travelers.