findark

A recurring topic with traveling on the US legacy carriers lately has been upgrades (or the lack thereof), and changes to the way airlines want to collect revenue for their premium cabins. United seems particularly aggressive about pursuing cash for their premium seats, and everyone here has heard of TODs and their impact on CPU rates. The fare landscape definitely makes flying discount paid F attractive, and to that end I've become very interested in its pricing. I've always been intrigued by fares, inventory, and the ticketing backend, so it's been an interesting project to do. I thought I'd share some of the results, both because I found some interesting things, and also to provide a thread to point to for understanding how domestic First is sold today. I've tried to (a) avoid confusing jargon where possible, at the expense of using pedantic names like United First [shorthands like 'F' can confuse the cabin with the booking code], and (b) remain unbiased as to whether United's moves in this regard are a good thing or not. For my part, I don't fly quite as much as a lot of you, so I've been happily benefiting from flying almost exclusively paid F and not feeling it so much in the wallet. I suppose writing this much means I have a bit of an obsession with flying, but don't we all?

Anyway, to address this topic from a (somewhat) newbie's point of view. I'll be generally assuming you know something about what a fare class is, and what specific booking codes on United mean. I also expect you're familiar with the idea of needed a published fare to go with available space in a booking code - for those basics of airline ticketing I don't see a thread, but hopefully you can pick it up somewhere .

If you're already an expert, just search for "Table 1" and "Table 3" to see the interesting stuff.

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A Simple Model for Selling United First

The simplest way to sell seats, which is still used for most international United BusinessFirst fares, is to just publish a fare for that class of service, corresponding to a booking code, and be done with it. If you're new to the concept of /UPDI fares, maybe this is how you think United still sells domestic First. For example, you could have a fare ZNC5NT, SFO to ATH, booking code Z. Then United will sell some number of seats in Z inventory on flights connecting between SFO and ATH, determined by RM's tolerance for selling at the Z level. This is still how all United Economy tickets work, and most international business class fares, including the example.

But, there's a potential problem with this approach. What if the Economy cabin is heavily loaded, with only Y inventory remaining? Does UA want to advertise a premium cabin as cheaper than the back? This could create awkward situations for business travelers on a Y-only policy, and perhaps cheapen the premium product. In the above example, the fare YR1 is $470 more than our cheap Z fare, so we could end up seeing an Economy ticket which is over $500 more than a currently offered Business ticket. In this instance, I had to create a pretty contrived inventory scenario for this to happen, which is why the pure premium fares still exist on international routes. For domestic pricing, it would be much easier for this to happen. All major US airlines with a domestic First cabin except Virgin America (VX) have abandoned this pricing method. And it shows -- I can routinely find close-in VX flights where First is cheaper than Main Cabin (economy).


Differential Fare Premiums - A New Model for Marketing First Class

In an attempt to better discriminate between their two cabins, US airlines have adopted a new model of inventory and fares for premium cabin travel. I prefer to call them differential fares, although in the United forum they are mostly commonly referred to as "/UPDI fares", in reference to the suffix to the fare basis that all such United fares used in the past. For consistency, I will use "/UPDI" as it is in common usage; although airlines other than United use different suffix designators, the idea is the same, and some of United's differential fares now use a different naming scheme. The goal of the /UPDI fare is to ensure that the First cabin is usually a certain amount more expensive than the Economy cabin.

This is accomplished by adding a complicated inventory restriction to this new type of fare. An /UPDI fare is paired with a regular Economy fare; for example we could consider the following two fares, on SFO to BOS:

These two fares are identical, except for a very few distinctions. The latter is a United First fare, with a booking code of P. As such, it will book into P inventory, but it also has one other very important caveat: it can only be booked if W inventory is also available. Therefore, it is subject to inventory restrictions from both the First cabin (P), as well as from the Economy cabin (W). So if Economy is filling up, forcing the lowest fare to be, say, an M fare (which is $742.33), then this First fare will also not be available, even if the First cabin is empty. United will publish one /UPDI fare to go with each Economy fare, and the difference between the Economy and First fare will remain constant. That means that, under normal moderate-load conditions, the difference between Economy (lowest) and First (lowest) will always be the same. (What happens at each edge will be discussed later). As an example, here is another pair of fares added to the SFO-BOS fare table, a Q and a Q-up, with the same difference in price. Note that /UPDI fares may book into any premium revenue inventory bucket, and that generally the higher fares use higher buckets. Which buckets are used is highly route dependent.

Some routes still use the actual suffix /UPDI to an Economy fare, instead of the newer name with "UP" embedded in the fare basis. For example, SEA to BOS:

We can call these fares which actually include the "/UPDI" suffix "old-style" fares, where the ones with "UP" embedded are "new-style" fares. They are very similar, and I will discuss the differences later. There has been some confusion as to the type of these fares, as they carry an Economy basis, and this will sometimes cause agents to believe you are on an instrument or complementary upgrade from an Economy fare (it doesn't help that some systems happily chop off the /UPDI suffix so the fare looks identical to an Economy one). Almost every fare for domestic premium travel is, however, now an /UPDI fare. It is my firm belief [opinion] that United intends these to be "proper" premium cabin fares, and any treatment otherwise is simply the result of incorrect agents and/or IT bugs.

One thing you might wonder from this, as I did, is how much United values First on various routes. While the fare differential is constant across the fare table on a given route, it varies widely based on route. The table below shows what the actual fare differential is, for a list of city pairs between large airports (perhaps biased toward the West Coast and United hubs). The price given is the difference in all-in price, which is where marketing wants the numbers to end nicely in 9s. The actual fare differential will be slightly smaller, according to taxes. Some of the footnotes will be explained later.

Table 1: United First fare differential versus same fare in United Economy
x indicates that there is no normal nonstop service between the city pair. Up to two transfers (connections) are free in each direction.
‡ indicates there is no /UPDI fare published for this route. Amount is the difference between lowest available UP fare and current Economy (lowest), provided for reference.
-- indicates United does not publish a fare for this city pair.

Obviously all of these numbers could change at any time, but they are surprising resilient to market forces, at least compared to fares in general. Table 2 shows the average CPM price by airport - since new style differential premiums were introduced, the premiums are strictly distance based.

Table 2: Average fare differential by airport, in cents per mile (cpm)
xps - excluding p.s. flights (which don't use /UPDI pricing)


Premium Fare Routing and Other Restrictions

It's been mentioned on the SDC thread several times, and it's a good idea. United's p.s. flights don't use the /UPDI structure and their premium fares are much more expensive. Can I route a cheap /UPDI SFO-XXX on a p.s. flight? Unfortunately, the answer is no. United thought of that too, and they use a template of flight restrictions which they copy onto all /UPDI fares. They prevent you from using the fare component on p.s. flights, and also generally any flight with lie-flat seats in the front cabin. The latter, however, is enforced manually by encoding specific flights into the fare rules as they are added into the schedule. So, in the case of equipment swap (or sometimes if you're lucky), you can score a Global First style seat on a K-up with booking code A. The template is encoded at Category 4 on the fare rules. The template is updated regularly as the schedule changes, and will be different on different copies of the same fare (different by date). This is low-tech compared to most of United's competitors, whose fare texts explicitly prohibit routing on certain configurations of certain aircraft.

New style fares have a nice clean block to do this:

Old-style fares have not been cleaned up. See if you can spot mistakes!

In addition, the new-style fare template has a $20 surcharge per connection which is absent from the Economy fares. This is presumably to charge you for your extra meal .


UP Fares: What Happens if my Flight is Y0?

If a flight is completely sold in Economy, then the /UPDI pricing model breaks down. To that end, United also publishes what really should be true premium fares. They behave exactly like a true premium fare, except that they start with a letter of an economy booking code. I truly don't know why they do this, other than speculating that it's a holdover from odd things long ago. In general, they are substantially more expensive than most /UPDIs (and much more than any other fare with their "fare basis letter"), and will only be bookable if the Economy cabin is completely sold out.

This is also the pricing model used on p.s. routes, and when internationally configured aircraft are present on a route (and the /UPDIs get blocked correctly), then seats in those premium cabins are sold only using these models. There are no longer any "true, true" premium fares (those with a premium first letter) available in domestic markets, except for full unrestricted F (bases FUA and F, available on all routes), and occasional "discount" unrestricted First FUA2F. Generally speaking, even UP fares try to keep you off of unintended 3-cabin aircraft on lengthy routings, although they do not surcharge connections. Only unrestricted F allows you to route however you wish (according to the actual routing rules). To add a few of these fares to our table from SEA to BOS, we would have

Currently, UP fares (as opposed to full F) seem only to occur on connecting routes with old-style differential fares.


Not That Good a Deal - No Matches for N Fares

Unfortunately for deal seekers, there's a limit to how cheaply you can get your ticket in First. United usually will not publish a matched /UPDI fare for its best deals in Economy. Frequently the fare classes N and G will not see a match, and sometimes K fares are also unmatched. Table 3 gives an idea of how this works. As long as the /UPDI floor is low (let's say T or lower), it's generally reasonable to say that for the average traveler they could have paid the differential to sit in front. But this isn't strictly true - an N fare hunter is facing a steeper premium to sit up front, and this has some bearing on the perceived fairness of the infamous "TOD" upgrades. And in some markets, the differential is downright misleading, such as where SEA-BOS is up-fareable for $149... if you're already shelling out for a U fare.

I have noted where the match was also the lowest published fare at the time. While most of these are K fares, and I highly doubt UA will go below K-up most of the time, I leave open the possibility. This table is somewhat more fluid than the upgrade price one. It's also worth noting that for city pairs where neither is a UA hub, taking a fare break at the hub could be cheaper than a higher fare class /UPDI through fare.

Table 3: Minimum fare class with matched United First fare
- indicates no /UPDI fare is published for the route
‡ indicates the minimum matched fare is also the minimum published fare
* indicates that there is a lower, unmatched fare with the same basis letter as the lowest matched fare
The United Economy booking code hierarchy is: Y B M E U H Q V W S T L K G N


Upgrades After Purchase

Allowing people to upgrade their ticket after purchase is (at least on FT) one of the more controversial things United lets customers do. As these are covered in other threads, I won't say too much here. Briefly, there are generally two options: buying up for the difference in fare, and buying up for the /UPDI differential. The former is frequently offered on the United site any time between purchase and check-in, and may also be done by calling an agent. The simpler of the two, it allows you to pay an add/collect to increase your fare to the lowest available First fare at the time of upgrade. This is generally allowable without the change fee; see here for more information.

At and after check-in, UA frequently (but not always) offers customers the chance to upgrade again, using a completely different pricing scheme and sometimes booking into a non-revenue bucket. These upgrades usually do not earn PQD, and sometimes do not earn a class-of-service bonus (so behave like an upgrade). These are called "TOD upgrades" or "TODs". The etymology of this acronym is unclear - many contend it stands for "tens of dollars" in reference to the perceived lowball nature of the buyups, but perhaps better suited would be "time of departure" upgrades, as we will freely use TOD to refer to this type of upgrade at OLCI, regardless of the price.

I have generally observed the price of these TOD upgrades to track closely with the fare differential for the route. For example, SFO-ORD upgrades tend to be roughly $199, SFO-DEN is about $139, and so on. Frequent deviations of $10-30 are common, but larger ones are much rarer. It is my belief that UA's pricing algorithm uses the differential price for the route as a starting point, and then feeds that into a black box of mystery. Loosely, then, this does not provide much advantage to purchasers of the TOD upgrade, unless they are on a fare which was too low for an /UPDI to match, or if the First cabin was uncommonly loaded at purchase (in which case TODs might be unavailable as F is fully booked). In any other case, the would-be upgrader had the option to buy First outright for a very similar price, without gambling on a non-revenue fare bucket or just not seeing the upgrade at all.

As always, and especially here, YMMV. Too many bugs and layered systems and methods to every be sure what will happen.


Conclusion

Whether or not you like where the frequent-flyer game is headed, it's good to know the rules. I've been focusing much of my obsession on fares, inventory, and booking, and find myself answering a lot of questions about /UPDIs. Hopefully this thread can serve as a reference for this fare type, and how much UA domestic First costs in general. If you made it this far, thanks for reading!

transportprof

Thanks for a fascinating analysis! ^

I think that when one looks to certain international routes, perhaps not TATL or TPAC, the /UPDI mechanism goes into the lower fare buckets more deeply.

I've got a YVR-EWR trip next week with a fare code of:

LNN1A9SS/UPDI

It's priced around $800 USD round-trip, and includes a return on ps EWR-SFO-YVR.

Kacee

I just booked SFO-RDU via EWR and the ps segments are a T fare basis booking into C. So these just keep getting weirder and weirder.

This is a great fare btw, at $1107 RT.

Boo_Radley

Wow, so this explains why the "Buy up to United First" will be like $628 for a midcon (and varies wildly), but I'll sometimes be offered $199 (or whatever is in Table 1 for the route) at OLCI.

fumje

Excellent writing. ^

Art Thomas

I learned a lot from this post. Thank you for taking the time to make this easy to digest for those of us who are less "in the know".

Juventini

another way United restricts routing UP-fares on ps flights: use J,C,D,Z fare codes for ps flights, when most of the UP-fares were booked into A,P buckets.

exerda

Thanks for the information--there's quite a bit of it there.

One caveat I'd add is that lie-flat on the 752s does not seem to be restricted; I've flown many segments on IAD-SFO & v-v and several on IAH-IAD which were booked in A or P over the past few months, all via /UPDI fares.

The 3-class 777s do seem to be a glitch or missed coding when they're bookable; I did it on IAD-SFO last year via an A fare for the same price as the 739s on the same route (and not through a swap, either; it was the normal equipment at the time). However, within weeks after that, they seemed to fix the bug and all the 3-class F went sky-high.

findark

Yeah. I was all ready to confidently write that you can't route /UPDIs onto p.s. and then was reading the fare rules again. Cat 4 absolutely used to have a line prohibiting travel between SFO and EWR, just like the SFO-LAX prohibition. The new line makes absolutely no sense. It reads like a blackout for an int'l config aircraft, but those flight numbers don't even correspond to the 3-class 772 which is flying SFO-EWR. The fact that those flights don't seem special is what convinces me it's a mistake and will get fixed.

But then, why blackout EWR to SNA? What's so special about that? The /UPDI Cat 4 block changes slightly by fare (probably dropping blocks sometimes based on the routing rules of the fare). EWR-SNA has a set of /UPDIs which are relatively specific to that routing. Sometimes I wonder if even UA can't clean up their mess all the time.

Notably, I think you found a loophole also with this /UPDI routing. I assume you grabbed TEA21AFN/UPDI (booking code A). I realized a few weeks ago (there's a thread on it somewhere) that if you can book into A on one leg, an A fare allows C inventory on one or more other legs. SHARES is treating this as routing a 3-cabin First fare into full fare basis of a lower cabin when connections are missing that cabin (like getting full Y on an CR2 with a premium through fare).

Yeah, it's always hard to tell. UA is a little silly in blocking the int'l configs by hand, and if you can book one on a normal fare, do it! Other airlines use seemingly more sensible approaches; e.g. here is a Delta /UPDI using Cat 12 to surcharge lie flats:

Kacee

That's the one, booking into C on the ps segment and A on the connector EWR-RDU. On that same search, I see the same fare booking into A on the 772 via IAD or ORD - does that mean it's going to allow seating in the three-cabin F cabin?

findark

Yes! If you can get booking code A on a 3-cabin aircraft you get to sit all the way up front. They still haven't blacked SFO-ORD 744/772 in April, but it got added to the schedule after people woke up and realized it's time for spring break, so the higher inventory makes it not worth a trip just to route the GF seat. (and the 772 is always at risk for the Hawaii config getting swapped in)

Kacee

Though tempted by the GF seat, I'll stick with the EWR routing, it's all mainline and the schedule's better as well

dorisrpas

Dear Findark - agree with Art completely. Thanks for the taking the time to do the research and for an excellently written summary. A thread I'll be following !

expressboy

Very nice findark. Thanks.

goodeats21

Chiming in with my thanks for a great thread. Always so much more to learn about this fun game we play!

Thanks. ^