<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by lstoner:
Just to check the water, I e-mailed Beth Shultis at NWA with my concerns about International upgrades from ALL fares. Her answer, to my question about any program changes coming in this area in 2003..."In regards to upgrades on all international fares, that's a tough one. We, like many airlines, do limit what type of international fares are eligible for mileage upgrades. We do this to manage demand for these seats as then are a limited commodity and to avoid fare dilution risk. At this point we do not plan to change this aspect of the program."
Do any of you NWA "insiders" put any hope into the "at this point" qualifier, or should I get back on my white horse and head for AA? ...and what the heck is "fare dilution risk!?!"</font>
The first argument is much more convincing than the second. What she says is that, above all, they limit the fare classes available for upgrade because they can. They obviously feel people are buying the more expensive seats to upgrade so they aren't upgrading the cheap seats.
Second, what she means by fare dilution is that that if they let people upgrade cheap seats, all they'd buy are cheap seats, diluting the revenue that they make.
Buy allowing a premium seat to go to an upgrade, your cost is the "opportunity cost" of that seat. Obviously they'd much rather sell the seat and not have it available for upgrade. Because they will go out not sold, they can either let them go out empty or give them to frequent flyers. Given that one can become a VFF by flying on low yield travel, the airline has to find some way of bebeffiting from allowing you to upgrade. They do this by having a middle ground. If you think about this from reverse logic, it makes sense -- everybody is allowed to "upgrade" the most expensive fares (that is, buy a revenue seat in premium inventory) and that the incentive to fly the airline is that the more you fly, the more "discounted" premium fares (i.e. you can get a premium seat at a cheaper rate) you can have. From the airline's health, it makes much more sense to do it that way than to allow the cheapest seats to always be upgraded.