Raffles

As a business decision, one of the worst things the US airlines ever did was to devalue their business class product by literally giving it away.

That happens nowhere else in the world, with the benefit that people who want it, buy it. If they don't buy it, the cabin goes out half empty which makes for better service for those who did pay.

If one of the big 3 broke ranks on this I'm sure the others would follow quickly.

baccarat_king

It is not just US Airlines. Look at KLM. They will "sell-out" the business cabin through 3-4 different methods of upgrades. (bidding, OLCI, chart copay + miles, Delta GUCs DOD used for KLM metal).

KLM also does the same with intra-Europe though it's really not as good of a deal (but, sub €99 upgrades to Euro-Biz are not unheard of....)

Some might argue, for example, that while a carrier like Delta does up-sell and FCM to domestic first class they are very protective of their international routes.

Try upgradeing to Delta One (Delta international business class) ex-USA and you'll find it is very very very difficult.

IMO, you need to protect (if that's your "concept") your high-revenue international business class product much more so than your (US) domestic product.

84fiero

What airline financial information do you have that shows this was a worse business decision for the airlines?

You describe why you view it as less desirable from your perspective traveling in the premium cabin but I'm curious as to why this equates to a worse business model for the airlines.

Raffles

Because you don't pay double (or triple) $ for something if you believe you have an 80 per cent chance of getting it for free.

We saw that here in the recession with some restaurant chains. They massively discounted for a couple of years but the net effect has been devaluing the product and they now struggle to get people back in at full price - the same people who were happy to pay full price a few years ago.

Kagehitokiri

Raffles im with baccarat_king, 99% of domest/regional premium, everywhere, is a joke

TMM1982

99% of domestic premium might be a joke compared to international premium (international premium costs a lot more too) but it's not a joke compared to economy.

84fiero

Do you have actual experience with flying US domestic as an elite? 80% is not even close except for the very top elite tiers. Mid-tier might on rare occasion score on a shorter, elite-thin route at a sub-optimal time of day...lower-tier elite? Forget about it.

Not everyone receiving a complimentary upgrade would otherwise pay for it - I'd say most would not. And if every F seat sells out before the upgrade windows open, no one gets a complimentary upgrade anyway.

Complimentary domestic upgrades are only available after one has spent and flown enough on the airline to earn them - it's an incentive to direct dollars more to that airline as opposed to others. That's the business model, not that upgrades are dispensed for "free". The likelihood that US airlines could, or could not, actually earn more by eliminating the perk and selling more F seats, I don't know. That would require a much more in-depth analysis of actual data, which is why I asked if you had such. Otherwise it's all simply armchair speculation either way.

Raffles

Of course it is speculation. But every other major global airline outside the US has decided that they more money selling short haul J and not upgrading elites, so the odds are stacked against the US carriers doing it right.

baccarat_king

Well, yes, but let's take one isolated example :

Delta, upgrades elites and is one of the most profitable airlines in the world. (and has a stellar one time performance.....)

KLM/Air France, does not upgrade elites and is a financial mess.

While I do not think the upgrading is necessarily related to profitability (as a major element); if KLM/Air France are making so much money on Euro-Biz and no free upgrades why is this not reflected with regard to their financials?

But, I don't really like speculation. I believe it's a different business model. But, in the end, my assumption is that the goal of any airline is to make money for their shareholders. Too many variables involved. Also, US Domestic is a big enough demographic to stand on it's own with regard to many metrics.

Not to mention the fact when you say "doing it right," now that US Carriers are making more money they are starting to improve their domestic first class product. (numerous examples out there of improvements at AA, DL And UA with regard to domestic soft product....)

IMO, these things are cyclical. Airlines making money, they invest in soft product. Airlines not making money they cut soft product.

TMM1982

Air France had a major crash 6 years ago which they couldn't even track down until several years later. Airlines don't recover from crashes that quickly. See Malaysia Air.

So this is a bad example.

baccarat_king

I was just trying to relate that charging for first/business short haul and no free upgrades was not necessarily related to operational excellence or profitability. I am sure you could fill in a number of other examples.

CMK10

I think that's a pretty bad reason for Air France's financial woes. By your logic, Asiana should be struggling too.

TMM1982

http://abc7news.com/travel/asiana-ai...-crash/831296/

CMK10

I find your rebuttal of a suit that has been filed against an airline, that may never result in a payout, to be unconvincing.

TMM1982

Read the article and you'll understand that it is inevitable. If you're still unconvinced, well go watch Forest Gump.