Originally Posted by ijgordon
Not to mention a violation of the company's fiduciary responsibility to shareholders. Unless of course you believe the "sanctity of the BF cabin" argument over the long term.
But what they really should do instead of op-ups, is, perhaps starting with elites, ask if anyone would like a mileage-deduct upgrade (no copay), or maybe even better, just start offering paid upgrades (say $200 to Europe?) so at least they can get something out of it, either cash or reduced award liability. They could do something similar to AA where these types of upgrades are only offered at kiosk check-in (in AA's case only when it's clear that there will be empty domestic F seats, but in COs case when it's also clear that Y is oversold, but that may be more difficult to discern 2 hours before flight time). Obviously you don't want the folks who actually paid BF fares or paid miles+copay to know that CO is selling the upgrades for reduced rates. Maybe execution would be overly-complicated, but there has to be some good ideas in there, better than giving away op-ups.
UA also does what you suggest, somewhat - they offer international upgrades at the kiosk at check-in for prices that vary based on distance, such as LHR-IAD for $550 Y to C. I don't think this would work as well for CO because CO has less J capacity, and J is usually packed anyway. Also, I think the administrative difficulties of offering mileage upgrades with no fees at the gate would outweigh the mileage revenue that otherwise would offset the cost of an op-up. Everyone would hold back on using mileage upgrades until day of travel; there would be dozens of pax asking GAs and ticket counter personnel about the availability of mileage and/or revups; and in an oversold Y situation, GAs would have to take the time to solicit elites to cough up miles, process the transaction, etc., whereas now they can just op-up two or three people and hand them new boarding passes at the podium. Op-ups are just a cost of doing business, and savvy revenue management is the best tool airlines have to keep op-up cost to a minimum.
I know I sure as heck would cough up miles at the gate to upgrade to J for no additional fee if I were in Y on an int'l segment, however.