Hey now, you're not following the correct FT protocol. You know, where mid-tier members declare that they scored 100% upgrades on the 85 flights they took. But strange how those 85 flights didn't get them top tier status...

why doesn't it come with a pet tiger named petunia?

That's the most valid point so far. Presumably you'd be filling up more of the first class cabin with elites willing to pay the (more sensible) premium in order to guarantee themselves first class and get the EQM and mileage bonus. You'd be increasing the value of 1K for those people, but then of course devaluing it for the others.

On some levels this question gets to the very complicated area of airline revenue management, and whether its worth sacrificing the loyalty of many 1Ks who fly mostly on highly discounted tickets for the loyalty of a smaller amount of 1Ks who are flying the same amount of miles but are willing to pay maybe 2x as much for guaranteed first class. I'm sure that a ton of math and statistics goes into this.

But there is definitely a simpler level to look at this, "top tier elites already have a great chance of upgrading for free from their discount economy ticket, why not grab some more of their money by offering them a more attractive price to get guaranteed first." And of course airlines would do it intelligently and the discount would be less significant for flights where people are already buying out the first class cabin at current prices, and for flights that are very heavily traveled by elites.

The premise that 1K's are all flying on highly discounted tickets is also not based in reality.

Really, where is your data coming from? The most frequent flyers at any airline don't have the ability to make their plans enough in advance to get the highly discounted tickets, nor do they have the flexibility to meet requirements for things like minimum stay, Saturday night stay, etc.

Your entire premise is based on data points that are just not at all valid.

I didn't say anything like that. I said that you could be sacrificing the loyalty of those people, yes, because please correct me if I'm wrong but people who are buying last minute tickets are often buying full fare or at least full fare is less of a premium to whatever else is the cheapest that they can buy, and then in that case they get higher priority for free upgrade than the others.

I don't see how it effects my premise at all. My premise is:

1: Top tier elite frequent flyers are already spending a lot on airfare (and it would be even more for the travelers you describe who are often flying last minute during typical business travel times). They are also spending some premium to stay loyal to a particular airline. They have demonstrated with their dollars that they are willing to pay a premium for better service.

2: Top tier elites already get nearly all the benefits of 1st class travel, plus they have a good-to-great chance of getting the upgrade to 1st itself

3: Yet they are given the same price for a 1st class ticket as anyone else, who doesnt already get all those benefits and have a chance of getting upgraded for free.

Its an inefficient pricing trap. People know that with their $500 economy seat they have an X% chance of being upgraded, and they would be willing to pay $1000 to get the seat guaranteed, but X is too high to justify them paying $1500 to $2000 that first class is to everyone else.

That would be my bad then, I assume that when you said that

and

You were saying that many elites are flying on highly discounted economy tickets. I totally misunderstood.

:rolleyes:

Think because there is a segment/demographic of buyers that have much higher willingness to pay for certain fares (business reimbursement or personal weath) - even at the slightest benefit - so airlines would leave money on the table if they didn't charge as high as possible (which is the unrestricted first class fare).

E.g. If I was a earning 7-8 figures a year I'm not sure I would care about $1000 vs $4000 flights. I'd just want the best thing possible. To the extent I probably still can't afford private.

That isn't a true premise.

The economy seat is $500
The full class business is $1500
The 'discount' business you propose is $1000.

But the company will still only pay $500. Thus $500 + good chance of upgrade is far more valuable to those elite passengers flying on the company dollar (where economy is mandated at least for short routes - and that is a huge number of companies these days) than the 'cheaper' business fare, which would cost them $500 out of pocket (assuming they can still get the company to pay $500 for economy, even if they fly business, which again, not all companies allow, nor do all airlines allow changes to flight class without penalty). Buy economy (on company dollar) and fly business, say 50% of the time (I think 85% is far too high) for $0 cost to the individual, or buy economy (on company dollar) and fly business 100% of the time, but at a cost of $500 each and every time to the individual which, if they fly 3 times a week, is in the region of $75k. I know which option I would go with!

I see your point that a certain proportion of corporations are not going to allow their employees to pay for 1st no matter how much cheaper it is than other airlines, and those people are going to try to find a frequent flyer program that is going to allow them to upgrade as much as possible off of coach tickets.

To make it clear now, so that you guys don't nitpick: like I said, airlines could implement this program intelligently, and one of those factors would be that they would still want to give consistent upgrades to full fare travelling elites to encourage their full fare business. This is standard revenue management. On flights with a lot of full fare travelers, you set the price of 1st class seats higher to accommodate more full fare upgraders.

It would obviously be a trade-off in terms of the passengers that you are attracting. But to me it seems like the passengers you are attracting are the frequent flyers who are willing to spend more money on their fares. Which seems like a good demographic for an airline to go after.

And my numbers are hypothetical. The point is that you would price the elite discount 1st class at enough of a premium over economy that it was worth taking the money vs upgrading someone for their loyalty, and also attractive enough to enough flyers that they would be loyal to your airline and pay that premium rather than join some other frequent flyer program and get free upgrades X% of the time.

I was an economics major in college and to me this is just an interesting pricing situation. Its almost like "the welfare trap" where people work less than they would because if their income stays below a certain amount, they can make more money in welfare. With airline top tier elites, they pay less for their tickets then they would because they have too good of a chance to get a free upgrade to justify the price multiple on 1st class tickets.

CO has been doing what the OP suggest via M-Ups.

CO Plat - and only CO Plat - get free advance confirmed domestic upgrades when they buy M class fares (or above). CO also was a very active in offering instant upgrades to Plats - trying to get them to pay. Some would pay to skip the upgrade queue; others would not and often fly economy.

What the new UA willl do is not yet known.

to all intents and purposes and for discussion, UA does not sell biz class in domestic flights. in intl flights, they do not ug biz to first at all. seen biz full, and first empty iad-europe many many times. they don't even put the employees in first.

only other experience i havve is LH. NO ug biz to first in intl. maybe honor get UG.

negotiated fares are just that.negotiated.

do not confuse domestic y to f with intl flights.