Originally Posted by
Kiwi Flyer
Welcome to Flyer Talk
drsmithy 
If you are referring to the incremental cost of food and beverage you might be right (then again some FTers can drink much more than this on longhaul flights
).
However, the cost to QF is not just better quality food and drinks. There is also a ongoing revenue impact. By being stingy with upgrades QF ensures that more passengers pay for business or first class than would otherwise be the case. That has a very real and large impact. Witness the difference in the profitability of QF and other major asia-pacific airlines compared with US-based airlines - at least some of that is due to the high revenue from the premium cabins on QF (and mainly awards and upgraders on US-based airlines). This also affects the quality of the premium cabins - QF has much better business and first class than the likes of United or American. One reason is they can afford to provide better seats, IFE, etc from the high revenue of that cabin.
Further, by not upgrading willy nilly, in the event not all seats sell out it provides a better experience for those who have paid many thousands of dollars for the premium cabin. This is a much better experience than being in a premium cabin that is full due to upgrading pax.
Prima facie this makes sense. BUT, what it assumes is that QF management is infinitely better than AA management, and AA management does not really understand how to make money. It assumes that AA management has decided to implement their operations in such a way that they don't maximise revenue and customer loyalty. Remember this is a company which eliminated 1-2 olives per serving in order to save on fuel costs. I can't see how they did not do a cost/benefit analysis of various upgrade policies and decided to go with the current regime because it was the optimal one given their environment constraints. I really can't see how they want to give us all upgrades no matter the cost
