I find this an interesting challenge from the yield management perspective of the airline. True, if they build a reputation of being able to get cheap last minute business class upgrades (especially on long haul), they could cannibalize business class sales as people shift to economy and try to upgrade at the gate. On the other hand, flying with 13 or more empty seats that could have received a few hundred or more each from last minute sales is money left on the table.

At one point I saw AE was part of optiontown (bid for possible upgrade), but it looks like this was abandoned around 2013-2014. To me, this would be an ideal approach to balance both sides of the equation. Must not have worked for them though since they stopped participating.

-db