Why does AA make upgrading with miles so $$$?
#16
Join Date: Jul 2004
Location: Buffalo, New York
Programs: AA EXP 4MM
Posts: 304
Have you priced a JFK-LHR J ticket lately? Lowest fare I could find on AA.com in J was roughly $5500 all in for non-stop RT JFK-LHR for a trip on random days in October. Same price for Y? Lowest fare...$676 all in. Add another $700 for the RT upgrade, and you're at $1376.
Assuming you also have the miles to burn (not to minimize that cost) Still seems like a pretty good deal financially (even with the valuation of miles at
say .02 per) if you want to fly in J. May not be worth it to you, but I know plenty of people who'd take that deal...even for the relatively short JFK-LHR hop.
#17
FlyerTalk Evangelist
Join Date: Apr 2001
Location: NYC
Posts: 27,234
Of course some people will pay the fee, but has AA ever actually said the net impact is positive? It's a tricky analysis because the $50 is cash, which is king, and the 15k miles is just an accounting liability.
That said, between my S.O. and I, we've taken 6 transcon segments in the past few months (and I have 2 more in the next month). Because of the $50 fee, I only requested a mileage upgrade for ONE segment (JFK-SEA for S.O.) I requested electronic upgrades (had plenty in the bank) for all the other segments, and they all cleared except for two (SEA-JFK x2). I would have requested more mileage upgrades if there was no fee. Surely the co-pay has reduced the demand for mileage upgrades, but has the fee revenue offset the liability that remains on the books? They really should be encouraging people to use their AAdvantage miles on AA, as opposed to using them for free F/J tickets on partners, which does cost AA $. If anything, Elites should be exempt from the mileage co-pay, as is the case on CO.
Totally not worth it...to you.
Have you priced a JFK-LHR J ticket lately? Lowest fare I could find on AA.com in J was roughly $5500 all in for non-stop RT JFK-LHR for a trip on random days in October. Same price for Y? Lowest fare...$676 all in. Add another $700 for the RT upgrade, and you're at $1376.
Have you priced a JFK-LHR J ticket lately? Lowest fare I could find on AA.com in J was roughly $5500 all in for non-stop RT JFK-LHR for a trip on random days in October. Same price for Y? Lowest fare...$676 all in. Add another $700 for the RT upgrade, and you're at $1376.
#18
Join Date: Oct 2008
Location: Austin, TX
Programs: IHG Spire Elite, Marriott Titanium, AA Plat, WN A-List Preferred
Posts: 267
Somewhat annoying but it did come with some benefits - this was last year, but at that time if you paid the fee to book within 7 days you didn't have to pay any change fees on tickets later on. So I ended up changing my ticket to return from Quito instead of Guayaquil, and then later on changed the date to come back one day early. No fees for either change
#19
Join Date: Jul 2007
Location: NYC-BNA
Programs: Lifetime Plat/4mm miles, Starwood, HiltonHonors
Posts: 657
#20
FlyerTalk Evangelist
Join Date: May 2001
Location: MSY; 2-time FT Fantasy Football Champ, now in recovery.
Programs: AA lifetime GLD; UA Silver; Marriott LTTE; IHG Plat,
Posts: 14,518
It's my biggest pet peeve with the AAdvantage program.
In fact, you could make the argument that (ignoring the fee), it's financially beneficial to the airline for you to book your upgrade or award ticket on short notice. Upgrade and Saver award availability is based on projections that AA makes on how many seats can be sold for cash. The closer to departure it is, the more accurately that can be forecasted.
#21
Join Date: May 2000
Location: Houston, TX, USA
Programs: UA 1K, AA Lifetime Platinum, DL Platinum, Honors Diamond, Bonvoy Titanium, Hertz Platinum
Posts: 7,970
With most legacy carriers, the 21- or 14-day expedite fees date back to when a paper ticket or paper upgrade certificate was required for every award. If you booked greater than that far out, they'd put it in the regular mail at a time convenient to them. If your travel was coming up soon, they had to a) use a more expensive business process to get the ticket or upgrade certificate issued by a specific date, and b) pay to have it mailed to you via express courier.
The fees were designed to cover those costs. When they went to electronic ticketing and electronic upgrades, those cost recovery fees quietly turned into a new profit center, as obviously once it's all electronic, there's no extra cost to process quickly and nothing to deliver. And once that profit center gets worked into the bottom line, it's probably not going away without it being made up elsewhere.
The copay fee is a totally different matter. That's something most carriers added just in the past few years. I remember that CO was one of the first. There were angry passengers here on FT, threatening to never fly CO again, and there were people conjecturing that many of the upgrade seats would go out empty because not enough people would be willing to pay for the upgrade. Well, it didn't turn out that way. At the CO DO I (FlyerTalk gathering), which was about a year after the co-pays were introduced, CO's CEO was asked about them, and if they might be reduced or go away. He said that in fact, during the first year that they were in place, the number of upgrades actually went up by a small amount, so if anything, maybe the co-pay needed to be raised (although they had no plans to do so). So, for every person that used to upgrade but now sits in coach because they don't think the copay is worth it, there's another passenger that got the upgrade and paid the copay that couldn't before because they were all taken. At least that's the way it worked out on CO, and I'd be very surprised if AA was substantially different.
The fees were designed to cover those costs. When they went to electronic ticketing and electronic upgrades, those cost recovery fees quietly turned into a new profit center, as obviously once it's all electronic, there's no extra cost to process quickly and nothing to deliver. And once that profit center gets worked into the bottom line, it's probably not going away without it being made up elsewhere.
The copay fee is a totally different matter. That's something most carriers added just in the past few years. I remember that CO was one of the first. There were angry passengers here on FT, threatening to never fly CO again, and there were people conjecturing that many of the upgrade seats would go out empty because not enough people would be willing to pay for the upgrade. Well, it didn't turn out that way. At the CO DO I (FlyerTalk gathering), which was about a year after the co-pays were introduced, CO's CEO was asked about them, and if they might be reduced or go away. He said that in fact, during the first year that they were in place, the number of upgrades actually went up by a small amount, so if anything, maybe the co-pay needed to be raised (although they had no plans to do so). So, for every person that used to upgrade but now sits in coach because they don't think the copay is worth it, there's another passenger that got the upgrade and paid the copay that couldn't before because they were all taken. At least that's the way it worked out on CO, and I'd be very surprised if AA was substantially different.