shgroamer

Bingo.


Anyway, my understanding was that $90 upgrades were not offered if elites were in the mix for upgrades. It's been told to me that way a year or two ago here on FT actually (and poster made me feel stupid for asking about that).

swag

The additional irony here seems to be that if the flight is F6 with 10 elites on the upgrade list, LFBU/TOD upgrades won't be sold. If walk-up or distressed pax get 3 of the F seats, then top top 3 elites will still get their upgrades.

But if the flight is F6 with only 1 elite on the upgrade list, they'll sell 3 or 4 upgrades to non-elites, and then if the same 3 walk-up or distressed pax come along, the sole elite on the list is out of luck.

In other words, if you're #1 on the list, the folks on the list behind you protect you.

ESpen36

I agree. The issue seems to be that RM is releasing inventory for LFBUs at T-24 hours, but not for elite upgrades, assuming that elites will clear at the gate. But, if IRROPS or walk-ups happen in the meantime, elites lose out to non-elite LFBUs....

Easy to solve: clear the elite upgrades FIRST, and then offer LFBUs at the last minute. Just flip flop it. Probably can be done if the LFBUs could book into R/X instead of A/C (the latter of which requires ticket reissue, and many agents don't want to bother with all the typing right before boarding).

JonNYC

That's never been the case.

shgroamer

And that makes more sense to me than what I was told here when I first started flying AA

arkyrab

I am not smart enough to understand the web described in this thread of how upgrades are received but I do know I am EXP, have 80,000 miles logged this year so far, rarely get upgrades and virtually never get upgraded when I fly with my wife who is P. I wish I could sell my 500 mile upgrades since they don't get used but just accumulate.

wetrat0

As a large, publicly traded company, AA is required to do its accounting on the accrual basis, not cash basis, which means that income goes on the books when the service is provided, not when payment is received. Selling a sticker for $40, recording the revenue immediately, and then valuing the liability associated with that sticker at $0 as you imply, would be very fishy (I would love to invest in such a business!!). How they handle the difference between "earned" stickers and purchased stickers, I have no idea.

coolcoil

I'm not a GAAP expert, but one reason that I suspect that they do that is because they took away the right to trade the stickers for miles. When you could do that, then the stickers had potential value for which the airline ultimately had to lay out cash (e.g. if you used those miles to buy passage on another airline). Now, the stickers pose no risk of cost to the airline, as the airline can control their redemption in a manner that their use costs the airline essentially nothing. I think that the GAAP rules would consider the extra cost of a few drinks or carrying a few extra pounds of luggage to be non-material.

Another reason to believe that they aren't carried as liabilities is that they don't have an expiration date. I'm pretty sure that the reason that airlines added the 18 month expiration date to miles is that they had to carry liability on the books to cover miles that were unlikely to ever be redeemed.

I could certainly be wrong about this. In any case, it's a sideline discussion to the main topic, as whether it is true or not does not change the fact that AA is screwing elites. It only affects whether AA's motivation is to gain $10 in revenue for that flight or $90.

Back when I was a UA flyer, this practice bothered me, but I didn't get too hot under the collar about it because the upgrades were free, so no money out of my pocket. On AA, I buy half the stickers that I use, so in my view AA is taking my money and then treating me shabbily.

One way to look at this is to understand that a sticker upgrade is really an LFBU, and when I request an upgrade, I'm saying "If you choose to offer LFBU's, then I will take one." Then, they ignore my offer to take their LFBU and offer it to a non-loyal flier. I don't dispute their right to do that, just I have a legal right to treat non-loyal customers better than my loyal customers, even while telling my loyal customers that I really appreciate them and there are huge benefits for being loyal.

I will also stipulate that this may be due to poor execution (polite words for incompetence) rather than intent on the part of AA. Hanlon's Razor is too often true:

"Never attribute to malice that which is adequately explained by carelessness."

wetrat0

I hadn't thought about the fact that redemption is essentially not guaranteed-- it's only space available. The question is space available after what. Theoretically they could maximize revenue for that particular flight by selling that last seat for $1 (or any amount less than the sticker price) and not letting you use your sticker (thus keeping the revenue), but long-term that's not a profitable move.

LINDEGR

I just experienced what might be the ultimate FCM, albeit by DL. Although I am Silver, I was not logged in as I was buying ticket for a friend. The site offered me $170 one way upgrade from PHL-MSP-SEA. I passed. Then after I purchased the ticket, when I went to select seats I was offered the option to upgrade but now for only $83. Considering he'd be spending $25 anyway on a bag, the upgrade cost is really just a net $58- coast to coast! And yes, I bought the upgrade for him!

ThreeJulietTango

AA does not intentionally sell upgrades out from under its elites like UA does. As others have mentioned, they do not offer day-of-departure upgrades unless there are enough seats remaining in the premium cabin to accommodate all elites standing by, plus a certain amount of seats set aside for last-minute walkups and/or IROPS. AA does not offer DODUs to elites on sticker-upgradable flights because the stickers are cheaper. Stickers currently cost $40 per 500 miles of travel and DODUs are currently pricing at an average of $45-$50 per 500 miles of travel.

However, there are occasions where the cabin may fill up unexpectedly and leave elites behind.

Part of the reason for not having elite upgrades clear before DODUs are sold may be related to the upgrades coming out of different inventories: X and R for sticker upgrades and A and C for DODUs. The latter inventories are usually more likely to have availability.

oneant

Are you 100% sure that AA is not changing their stance on this? Unless you run into a situation like mine where I was both the recipient of LFBUs & a failed upgrade request as a Plat, how would anyone on the upgrade list actually know how all of the other pax in F made their way to the front?

First, with the new revenue requirement for elite status beginning in 2017, the bolded part above does not make sense. Second, it is, in fact, in direct contrast to what I was told by multiple agents (phone, counter, AC, gate), since it was made clear that the revenue of the LFBUs was preferred to my "complimentary" sticker upgrade. Third--just as each elite level grants you the combined benefits of the lower tiers PLUS [insert benefits here]--an elite should be presented with the same offers as a non-elite; it should be my decision whether to take an LFBU for extra cost or stay with the sticker request.

JonNYC

Those statements were incorrect. Not uncommon.

As far as the public-facing language, not only has it not been changed to reflect what you were told, as pointed out, by you, in this thread, it has, over time, morphed into language that can easily be read as the exact opposite. (Even though internally, nothing has changed on this front, it's exactly as ThreeJulietTango states.)

oneant

Are you basing that statement solely on the public-facing language?

JonNYC

Of course I'm not. My information is from the highest level at AA.