The Airlines’ Dilemma : To Upgrade or Not To Upgrade

The less full an airline's premium cabins, the less well managed it is.
The less full an airline’s premium cabins, the less well managed it is.

I wrote, last week, at my dismay at being refused access to the business class cabin on a 10 hour Fiji Airways flight, even though I was holding a business class ticket.  For sure, that’s an extreme example of being overly protective about the premium cabins, but some airlines seem to have a love/hate relationship with their premium cabins, their passengers, and how they mix and match the two.

Historically, airlines seldom upgraded passengers from one cabin to another, for two reasons.

First, they did not have the computerized tracking systems they now have, so when passengers turned up at the gate, the airline neither knew the type of fare and price each person paid for their ticket, nor did they know if the person was a very frequent flier and deserving of extra consideration or not.  It was hard to know who deserved upgrades and who didn’t.  This was the era where schmoozing gate agents could sometimes get you an otherwise undeserved upgrade.

Secondly, airlines – and the world in general – was more snobbish, and airlines would snootily boast ‘we protect the integrity of our first class cabin’ – the implied thought being that if they were to upgrade coach class passengers, they would be letting ‘inappropriate’ people into the first class cabin (think back to when people would dress up for a flight) and the people who had paid full price for their first class tickets would be horrified at the introduction of ‘lower class’ people.  A related thought was that the people who paid full price would be outraged at seeing other people admitted to the cabin for less than full fare.

The net result, which many of us may have experienced, was sometimes being the only person in an entire first class cabin, but with the rear of the plane crammed full of people.

That’s a scenario that does no-one any good.  If the airline moved 12 or however many people from coach to first class, that could potentially directly please 36 people – notionally each of the 12 people might have been in a middle seat and now the people on either side have spare space, so they are pleased, and of course the 12 people upgraded are beyond pleased.  There is also more space in the overheads due to the lower passenger density, less pressure on the toilets, and every which way, a lighter load in coach class makes improvements to just about everyone in the coach class section of the plane.

On the other hand, there’s much less sense of crowding in first class and (since its introduction) business class, so filling up the premium cabins doesn’t notably detract from the experience of premium passengers, while improving the lot of all coach class passengers.

These days airlines know more about our travel habits than we do ourselves, and they know to the last penny exactly how much we paid for our tickets, giving them the ability to create what passes for some type of fair system for prioritizing access to upgrades, and the whole ‘dressing for a flight’ thing only applies in one remaining situation – if you are an airline employee traveling on a free ticket in a premium cabin, the airline typically still insists you dress up for the flight.  Amusingly, this means that rather than blending in, as was the original requirement for this dress code, airline employees on free tickets now conspicuously stand out!

The other thing that has changed is that people now understand that the person seated next to them on any given flight might have paid twice as much or half as much for their ticket.  Even the premium cabins now have multiple fare levels available.  Everyone is free to either guarantee their first class seat by buying a first class fare, or to take their chance by spending less on a ticket and hoping they have the frequent flier ‘horsepower’ to pull them forward.

In theory, airlines should also realize, now, that while the incremental cost of having someone seated in first rather than coach class is trivial (maybe $5 more for food and beverage, a dollar for an amenity kit, and a dollar more for accelerated wear and tear on the seat and its fittings) the benefit in terms of customer goodwill is enormous.  Most airlines now consciously fill their premium cabins.

Furthermore, some airlines have instituted various types of ‘pay to upgrade’ programs, so as to get as much extra money as possible from each empty premium cabin seat.  Needless to say, these ‘pay to upgrade’ programs co-exist uneasily with the free/courtesy upgrades offered to elite level frequent fliers, particularly the programs that allow elite fliers to confirm their upgrades one, two, three or even more days in advance.

But a few ‘hold out’ airlines still begrudge access to their premium cabins to anyone other than passengers paying the applicable full fare.  As observed above, this is a lose/lose/lose proposition.  Potential upgradees definitely lose out, everyone else in coach class also loses out, and the airline too loses out, either from some incremental upgrade-fee type revenue or from the massive loyalty boost a free upgrade would give them from the people so upgraded.

So, here’s an interesting test.  As a quick rule of thumb, any time you are on a flight in a full premium cabin, you know the airline is well-managed.  But if there’s even one empty seat in the cabin, you know the airline is shooting itself in the foot.

With that fair measuring stick, how to describe the management quality of Fiji Airlines and the almost half empty business class cabin on the flight from Auckland to Fiji, and the presumed one-third empty cabin for the long 10 hour flight from Fiji on to Los Angeles (both flights suffering from densely packed coach class cabins).  Yes, they deserve a full management fail.

5 thoughts on “The Airlines’ Dilemma : To Upgrade or Not To Upgrade”

  1. Good points. I think most airlines could gain additional revenue with the “upgrade at the gate” for a reasonable price. Most would pay an extra $200 or so from coach to business on a 6+ hr. flight. So if 10 empty seats in business, an extra $2000 in revenue. On the other hand, if I am in business class (via a paid or even award), I prefer fewer people as a bit better service, fewer people using the restrooms, easier to disembark, no running out of 1st choice in meals, etc. All little things – but still a preference.

  2. I might disagree on this unfortunately. When MALEV Hungarian Airlines had this policy, the full-fare paying customers realized that it is more cost-effective is to buy an economy ticket and ask/receive an upgrade free of charge. So the revenue from business class customers decreased all the time. If people smell that they can get such a big value with little investment, they will try the game. Also, if people realize that an upgrade is easy to ask for, they will overload the gate agents with requests, where probably the refusal will generate bad feelings against the airline (why he, why not me etc).

    I agree though that full-fare paying customers should sometime get a complimentary upgrade.

    Keep up the good work, I enjoy reading your newsletter every Friday morning!

    1. Hi, Laszlo

      Nice to hear from you, all the way from Budapest.

      It is interesting to read your local perspective, although I’d want to see the truth of Malev’s claims before accepting them. 🙂 Here in the US, not a lot of full fare premium cabin tickets are ever sold, particularly on long haul flights, with most people in those cabins either being on upgrades or free tickets.

      I think it was the Chairman of Cathay Pacific who said, when announcing his airline’s decision to scrap first class, that it was proving to be the most expensive staff/employee club in the world!

      Plus here the airlines now have such a structured formal system for upgrades that most people understand and accept if they get upgraded or not.

      All the best


  3. We’ve run into another conundrum. Using miles, we are ticketed in coach, roundtrip from the US to Sydney. We would happily pay for the upgrade to Economy Comfort or even Business Class. However, Delta refuses to allow us to do that.

    1. Hi, Ruth

      That’s a slightly different situation. You’d have to cancel the coach class travel and then rebook in the other class, and potentially eat the cancel fee as part of the deal. Yuck.

      You would of course think that it would be sensible for an airline to not only issue mileage awards in coach class but also to have some type of conditional upgrade from coach to premium cabins for more miles, but perhaps it is an issue of practicality – gate agents can’t realtime access passengers’ frequent flier accounts and deduct miles for upgrades?

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