This has nothing to do with ethics. The funds belong to the employer and it is embezzlement (or whatever the crime is called in your state) not to turn the funds back in.

The fare difference, if you pocket it, is also income and reportable to the IRS.

Not exactly the same facts, but a couple of NBA referees who flew in paid F by contract, would cash those F tickets in and then purchase the cheapest Y seat they could find. The refs were convicted of tax evasion and sentenced to prison.