Domestic Upgrade with $ [money] Alone
Apr 4, 2012, 11:48 am
#76
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Actually, it's brilliant if you're aspiring to be the next Gerald Arpey. You can ruin the airline, get paid $6 million/year in salary, and blame it all on some poor sap who makes $45k a year serving Pepsi and orange juice to slack-jawed yokels.
The elite traveler can't check in for his flight if he wants to stay on the upgrade list unless he buys enough stickers to cover the upgrade. $$ in AA's pocket.
The kettle traveler isn't going to buy stickers--ever. But they will pay an equivalent price for a guaranteed upgrade. $$ in AA's pocket.
The elite traveler will never have the opportunity to use his stickers, since the kettle is being offered the seat first. So AA gets paid twice and only has to "ship" one product. Not bad, huh?
Of course, this is unsustainable in the long term. The elites will eventually wise up, and the airline will continue its vertical nosedive. But hey--what do you care? You're a Gerald Arpey, C-Suite, red-blooded American business executive. You don't care about the long run--only the Germans and the Chinese do that. Your job is to milk the company for every dollar it's worth and then move on to the next, Mitt Romney-style.
The elite traveler can't check in for his flight if he wants to stay on the upgrade list unless he buys enough stickers to cover the upgrade. $$ in AA's pocket.
The kettle traveler isn't going to buy stickers--ever. But they will pay an equivalent price for a guaranteed upgrade. $$ in AA's pocket.
The elite traveler will never have the opportunity to use his stickers, since the kettle is being offered the seat first. So AA gets paid twice and only has to "ship" one product. Not bad, huh?
Of course, this is unsustainable in the long term. The elites will eventually wise up, and the airline will continue its vertical nosedive. But hey--what do you care? You're a Gerald Arpey, C-Suite, red-blooded American business executive. You don't care about the long run--only the Germans and the Chinese do that. Your job is to milk the company for every dollar it's worth and then move on to the next, Mitt Romney-style.
Cheers.
Apr 4, 2012, 12:09 pm
#77
Join Date: Aug 2001
Location: VA
Posts: 144
UA sells upgrades out from under their elites all the time. Huge uproars on the UA board about it all the time.
DL does this too via FCM "first class monetization". Again, big threads on the Delta board.
I think it would be crazy to think AA hasn't considered doing the same and won't test the waters at some point. The only difference is that AA does earn revenue from it's PLT and GLD upgrades, so perhaps they can hold out longer, but I do think the era of free upgrades is reaching its end.
DL does this too via FCM "first class monetization". Again, big threads on the Delta board.
I think it would be crazy to think AA hasn't considered doing the same and won't test the waters at some point. The only difference is that AA does earn revenue from it's PLT and GLD upgrades, so perhaps they can hold out longer, but I do think the era of free upgrades is reaching its end.
All this fanfare caused many on the DL board to be upset as DL was selling first class tickets, leaving fewer seats for upgrades. Additionally people were upset because sometimes the P class ticket was cheaper than a Full Y.
Now when you book a ticket on DL, it automatically gives you the coach and first fare side by side clearly to dismay of some. Everyone including elites are given the opportunity to buy the first class ticket.
Apr 4, 2012, 12:15 pm
#78
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Apr 4, 2012, 12:27 pm
#79
Join Date: May 2007
Programs: AAdvantage, Hilton
Posts: 3,191
Well, I can't agree with you on this point. I believe any additional revenue is good for the airline. I just don't see what AA wins if it turns down even 100USD from a coach pax to sit upront in faviour of an EXP - so that the latter has an incentive to buy yet another deeply discounted coach ticket but consume a much higher value product (a seat in F)?
Upselling during check-in is a creative way to maximize revenue - why give something for free if there are people willing to pay for it?
My view is that selling an F seat in any manner does not run contrary to the EXP perks which is free upgrades where available.
Upselling during check-in is a creative way to maximize revenue - why give something for free if there are people willing to pay for it?
My view is that selling an F seat in any manner does not run contrary to the EXP perks which is free upgrades where available.
I know others have already mentioned this but you really are confusing the FT crowd with a typical EXP who achieves status by traveling for work.
Apr 4, 2012, 2:06 pm
#83
Join Date: May 2005
Location: Kyiv, Ukraine
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I think in general the problem here is that people tend to think that complimentary upgrades is a guaranteed right rather than a perk. If I knew that I was entitled to something upon availability I would not demand that the airline does not sell F tickets (regardless of the method) to leave some open seats for me...
Apr 4, 2012, 2:07 pm
#84
Join Date: Nov 2011
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Apr 4, 2012, 2:11 pm
#85
Join Date: Aug 2008
Location: HND
Programs: AA EXP, UA 1K
Posts: 1,230
I can tell you for a fact that the board told him the company was going to file Ch 11 with or without him and he chose to resign rather than be a part of it. Say what you want about the principles he had, the man certainly stuck to them.
Apr 4, 2012, 2:16 pm
#86
Join Date: May 2007
Programs: AAdvantage, Hilton
Posts: 3,191
So, that even helps my point. Presumably, these EXPs will be sitting upfront anyways because they choose to pay to be there, so AA should not worry that 'low-value' EXPs will defect to other airlines. And even if they do, other airlines seem to employ the same approach to filling pre,ium seats with paying customers.
I think in general the problem here is that people tend to think that complimentary upgrades is a guaranteed right rather than a perk. If I knew that I was entitled to something upon availability I would not demand that the airline does not sell F tickets (regardless of the method) to leave some open seats for me...
I think in general the problem here is that people tend to think that complimentary upgrades is a guaranteed right rather than a perk. If I knew that I was entitled to something upon availability I would not demand that the airline does not sell F tickets (regardless of the method) to leave some open seats for me...
As for the "other airlines seem to employ the same approach..." argument, this is where AA has stood out from the pack and differentiated itself and it is also the reason AAdvantage remains the largest and most popular frequent flyer program. For example, AA allows the use of eVIPs on all fares, where as the competition many times requires its elites to pay a much higher fare just for the privilege of getting on a waitlist for a possible eVIP equivalent upgrade.
Apr 4, 2012, 2:19 pm
#87
Suspended
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In a macro sense how many EXPs would be displaced if AA more proactively attempts to upsell F seats. DL and US gate upsell (DL only on certain fare codes though) and there does not seem to be rush to the podium. Also, EXPs usually clear before the airport battle ground begins. It would like be the poor GLDs that would find themselves sitting more in the back of the bus.
Of course, if you are that EXP that is sitting in the back because AA sold an upgrade to a non elite the overall macro factor would not mean much to you.
Of course, if you are that EXP that is sitting in the back because AA sold an upgrade to a non elite the overall macro factor would not mean much to you.
Apr 4, 2012, 2:48 pm
#88
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And DL's is certainly not widespread. I can count on one hand the number of times I've even seen it offered... usually off-peak when they can't even fill the F cabins with Silvers.
Apr 4, 2012, 2:51 pm
#89
Join Date: Aug 2001
Location: VA
Posts: 144
And it only occurs when there are more F seats than elites. K+ fare is required for the gate upgrade.