Will The Free Upgrade Become Extinct — and Is That a Bad Thing?
One of the most important perks of elite status in a frequent flier loyalty program is that free upgrade from the economy class cabin to a premium class cabin, which in some cases has become more elusive…
…but are free upgrades an endangered benefit which may eventually become a thing of the past — doomed to be replaced by upgrade auctions via the Internet?
Over the past couple of years, a variety of commercial airlines have switched either partially or completely to an upgrade auction model:
…and FlyerTalk members have been tracking successful bids as well as unsuccessful bids in the auctions for upgrades, such as on Air New Zealand, as commercial airlines are loathe to voluntarily reveal the precise prices one can expect to bid for a successful upgrade.
A company based in New York called Plusgrade offers an option for air carriers worldwide designed to increase revenue by offering upgrades to customers by asking them what price they are willing to pay to be upgraded on a flight in advance of the flight rather than pay for an upgrade at the last minute for a set price, as is the practice of some airlines. The upgrade auction is offered as an invitation to the passenger purchases the ticket via the Internet…
…and on some airlines, you are out of luck if you purchased an airline ticket which was heavily discounted.
If a bid is successful, the passenger will usually be notified a minimum of three days in advance and have their credit cards charged accordingly; while unsuccessful bidders are simply that — unsuccessful, with no change in their class of service or their finances.
No commercial airline based in North America has offered upgrades for auction — but that is apparently set to change this year, as it has been announced that one airline yet to be identified has supposedly signed up with Plusgrade. FlyerTalk members are guessing as to which airline based in North America will the one named to offer upgrade auctions.
FlyerTalk member StayingHomeIsBetterwonders if Delta Air Lines may follow suit. Delta Air Lines offers free unlimited upgrades to SkyMiles frequent flier loyalty program members at all levels of Medallion elite status on most flights within North America, the Caribbean and northern South America. However — unless you are lucky enough to earn an operational upgrade — seats in its premium class cabin remain empty on international flights unless passengers pay outright for them, redeem SkyMiles frequent flier loyalty program miles for award tickets, or upgrade to them if they have the proper upgrade instrument and have already purchased an economy class ticket in one of the two most expensive fare classes.
In the case of Delta Air Lines, auctions for upgrades might be a positive benefit for passengers on international flights — but Medallion elite members might balk at having those free unlimited upgrades greatly reduced if the concept was introduced to domestic flights. Some FlyerTalk members might argue that such a development may be good, as it would increase the exclusivity of the premium class cabin on domestic flights and thus result in a better experience.
While some FlyerTalk members may dread the concept of the upgrade auction — believing that it reduces or even eliminates the free upgrade to which they may be potentially entitled as elite members of frequent flier loyalty programs — the author of the Very Good Points weblog is actually excited. Excited?!?
“Personally, it’s great for someone like me who has status with an airline like US Airways but flies Star Alliance partners regularly“, she writes. “I never get upgraded overseas and this would allow me to bid for upgrades. I’m all for it and it might change the way I fly. Heck, it will change the way I fly.”
That seems to make sense. After all, why should an airline depart with a potentially valuable yet perishable item left unused, such as a lie-flat seat in the premium class cabin — especially on a transoceanic flight? Why not earn some extra revenue and simultaneously have a happier passenger as a result? Nor1 — a “cousin” to Plusgrade which offers various upgrades at set rates for hotel rooms immediately after the customer books his or her hotel room reservation — has existed for several years to the chagrin of FlyerTalk members who believe that certain upgrade opportunities have either been reduced or eliminated. My experience with Nor1 is simply that it offers upgrade opportunities of which I might not otherwise take advantage — such as an upgrade to a suite in the Hilton HHonors frequent guest loyalty program, which is typically not offered to elite members. Otherwise, Nor1 usually offers me the upgrade for which I would have qualified anyway at no cost…
…and although I have never paid for a Nor1 upgrade, there are those who do, earning the hotel property additional revenue it might not otherwise realize — and is that a bad thing?
I have always opined that I have no problem with commercial airlines, lodging companies and rental car companies creating new streams of revenue — such as baggage delivery service by American Airlines or premium meals offered by US Airways — as long as there is little to no averse impact on the benefits of their customers who are elite members of their frequent travel loyalty programs. In fact, I encourage creative and innovative ideas which result in win-win scenarios for travel companies and their customers.
What are your thoughts on the upgrade auction technology powered by Plusgrade?