alvarez16

Hey everyone -

I bought a regular economy ticket on a long haul route (~10 hour flight) and being offered the chance to upgrade to Delta One for $499.

Considering Delta One on this route is pricing at $3,000+ each way, it seems like a great deal.

However, the Delta One cabin is almost completely empty, so I’m asking the question:

Should I expect this to decrease in price as we get closer to the flight date?

I understand the answer is “it depends” on if Delta is able to fill the cabin with paid tickets, upgrades, what happens over the next few days with seats, etc. However, given we can’t predict any of that, is there a rule of thumb on (all else equal) paid upgrade prices increasing or decreasing as we get closer to departure?

Wimsta

That the price decreases "from a good price" is extremely rare in my experience. If you see a price you like, I would not expect to see a drop.

Note: I have oftentimes seen it go from outrageous to reasonable, but I have rarely seen it go reasonable to better.

TankerT

I think that's an interesting question these days. In my limited experience, because business travel can often be booked last minute... when it got close to the flight date I would normally see these offers increase in cost. But, of course... business travel is pretty low these days which makes it more complex to guess...

I also would find these numbers to go up and down on a regular basis over time while a few months out when I had booked pre-planned leisure travel. I thought I scored a deal when I got a 13 hour flight upgrade to D1 for $900. (I had been checking weekly for a few months for a trip planned quite a bit out... and the price was normally $1,200 to $1,800 for the upgrade...)

For a 10 hour flight, I don't think I've ever seen it so low. I don't know how much lower it would go. Perhaps others can chime in. But I don't think it's going to drop much. It probably also depends on the route and type of aircraft.

Mind you, it's important to remember that seat upgrades are not refundable, and non-transferable. So if you change your flight, you can't move the credit. And, if you are flying somewhere that for whatever reason (I.E. COVID) you can't take the flight anymore, you don't get the $ back.

ethernal

Ultimately only you can determine the value of whether $500 makes sense to pay. I would prioritize your decision calculus based on this rather than trying to decide whether you could get it cheaper (I don't see it getting much cheaper.. but honestly, does $800 vs $1000 r/t make a difference in decision calculus? Probably not that much).

With the asterisk that with COVID, everything is an unusual demand environment, $1000 r/t for an upgrade to D1 is very good outside of extremely unusual demand periods. The only time D1 is within that range of Economy is around winter holidays where Y demand and J demand are highly unbalanced. Otherwise, a $1000 markup off of a reasonably priced Y ticket is a pretty good deal.

For what it's worth, I've never seen an offer this low for a 10 hour flight in D1. That said, I'm a DM (Delta penalizes their Medallions with crappier upgrade offers) and live in one of Delta's mega-hubs so take this with a grain of salt.

TankerT

While I knew that flying from a major hub had several disadvantages (as I can drive to one of those if the price was right, but I fly out of a tiny regional airport where the price is always lower...) I never knew that they gave DMs a worse upgrade offer. Is this a well known issue? Any idea why that is the case?

alvarez16

Do you know how strict this refund policy is? For example, where I’m going requires a negative COVID test and there is of course a non-zero chance that my test is positive. I’d imagine if it’s COVID related they would have some flexibility?

xliioper

I would take the $3000 "value" number with a large grain of salt. One-way fares can be substantially more than roundtrip fares depending on route. You also have to consider that discount D1 fares have advance purchase requirements (generally 28 to 50 days for cheapest Z fares). So if you looking at close-in fares, that will also distort pricing. The pricing is based on what a certain (fairly price insensitive) segment of flyers is willing to pay and not on any real definitive notion of value (which is going to be highly subjective -- with personal financial situation being a pretty significant factor for many people).

ethernal

There is no public reference to this but it is a well hypothesized fact. You can read the FCM thread for more. I don't think it is particularly unique to Delta as I had the same experience with United (except it was even more obvious.. no status / Silver / Gold on United, I got buy-up offers for $89 regularly EWR-ATL.. literally the day after I made Platinum, the offers changed to $300 - it was laughable). In terms of my personal experience on Delta, my partner and I have flown separate tickets (same routing) before and she received an FCM offer less than half the price of mine - at the time we was either no status or Silver Medallion. Of course, it could be random, but nothing is random in revenue management.

The reason why just comes down to revenue management. The assumption is that high-statused Medallions = higher income (or at least less price sensitive) = more likely to pay more for first class/D1. if Revenue Management's job is to try to extract the maximum amount of revenue from available D1/FC seats, upgrade offers provide an excellent way to execute price discrimination. If I have 3 seats available, my goal is to get as much money for those three seats as possible. I know I can fill them at low yield by offering cheap buy-ups.. the question is can I get someone to pay more than the average passenger on the plane?

It also comes down to brand management. I don't want Medallions de-valuing first class with cheap buy-up offers (or frustrating them knowing that "their" upgrades are going for pennies on the dollar).

alvarez16

Yeah, I understand that. I was basing the $3,000 price on a round-trip equivalent of ~$6,000. In any case, I'm not too fixated on the "value", just trying to gauge if logic / history implies it will go down a bit further or if $499 is basically a floor for a Delta One (ATL-GRU).

ethernal

Yes.. there is no "value" inherent to spending more money but getting a big discount. Buying a $1000 coat for $200 on sale still means you're out $200. Did you buy it because it was 80% off, or did you buy it because it was worth it to you at a $200 price tag? It should always be the latter, not the former. Same case applies here.

For me, $500 on a redeye is a no-brainer. $500 on a daytime flight when the alternative is a decent C+ seat? Probably not be worth it to me, unless I plan to be exhausted/sleep on the daytime flight. But different people value different things (e.g., I ascribe literally zero value to fancy food/drinks/personalized service.. I care much more about the hard product.. but for other people, they may care about those things).

xliioper

For reference, the 50-day advance purchase roundtrip D1 Z fares on this route currently start at $970 each-way.

TankerT

Upgrade terms and conditions indicate that these upgrades are non-refundable and non-transferable. I am not aware of any COVID exceptions. I have had a mixed bag experience before COVID. Unless someone can point to an exception that is clearly public, it's probably a risk and you should assume you would lose the money. But I am not certain.

ethernal

V fares in Y for the same dates are about $320 (taxes included) so technically still room for "arbitrage" if the upgrade offer is $500 each way.

While it should be no surprise, COVID is such a crazy beast. If you had told me a year ago that there would be widespread non-error fare availability across a lot of dates for $1900 D1 r/t non-stop ATL-GRU I would have laughed you out of the room. With fare restrictions (7 night stay, etc) you would have been lucky to get a $4-5000 r/t flight.. with fare restrictions almost always $7-8K+.

alvarez16

For context (and to help inform future readers) I bought the ticket with miles (~23,000) in regular economy and I do not have any status (I used to be Platinum 1-2 years ago, but completely stopped flying during the pandemic). I would be curious to see the upgrade offer for a Diamond or Platinum member to help validate (or discredit) the points being made.

In any case, it is a red-eye, it is part of a 3 segment trip, and I have to work the following day, so I will likely pull the trigger. Just wanted to check with the experts on this forum to see if there was some obvious / glaring rule of thumb (e.g., "once you're within 7 days, the upgrade offers almost always improve").

MSPeconomist

You need to make a decision. Upgrade offers can disappear quickly or go up in price, although COVID-19 would seem to make it less likely that DL will suddenly sell a bunch of D1 fares for the flight.