The airline can afford the hit: because these business seats would otherwise be empty most likely. It likely will have nil impact on costs. While there are fliers that would abuse the *G privileges for domestic lounge access, some people will fly Copa and will never have considered them before.

What it screws over though are the actual frequent fliers with Copa who credit their miles to them. They have to compete against elites who are there just for the upgrades. In other words, it devalues the FFP. This is less of a problem in other status match programs where there are no upgrades involved. But this should all be over in 2017 when most expire.