Are AA's "First Special" fares approaching TOD levels?

Discussion in 'American Airlines | AAdvantage' started by cova, Oct 25, 2012.  |  Print Topic

  1. cova

    cova Gold Member

    Messages:
    2,165
    Likes Received:
    2,241
    Status Points:
    1,370
    I am finding that with AA's "First Special" fares, upgrades are getting harder for EXP and CK. I am finding that F is selling out and we are now seeing EXPs way down on the upgrade list.

    Some First Special (FS) fares are only 50% more than Economy Super Saver fares and half of what Economy Saver fares. For example, a transcon FS fare IAD-LAX can be as low as $180 more than the cheapest Super Saver fare. If one were an AA Platinum, upgrade segment coupons would cost 5x$30 or $150 for the waitlist upgrade. But confirmable with an FS fare is only a few dollars more.

    Are we starting to see the TOD (Ten's of Dollars) effect on AA, like UA - but at ticket purchase time rather than check in time?
     
    tondoleo likes this.
  2. NYBanker
    Original Member

    NYBanker Gold Member

    Messages:
    32,725
    Likes Received:
    191,901
    Status Points:
    20,020
    CK has no bearing on upgrade status.

    I (a lowly AA PLT) often buy these First Special fares. Reasonably priced, avoids gate lottery.
     
  3. downhillcrasher

    downhillcrasher Gold Member

    Messages:
    1,328
    Likes Received:
    2,395
    Status Points:
    1,270
    No, this is nothing like TODs. The trouble with TODs is that they are offered to various people at various times at various different prices, often times only to non-elites while elites are left un-upgraded. AA is not doing that, they are being very straightforward and pricing their F product at price people will actually pay. It isn't opaque or underhanded like United's process.
     
    tondoleo likes this.
  4. cova

    cova Gold Member

    Messages:
    2,165
    Likes Received:
    2,241
    Status Points:
    1,370
    True. It would cost you $150 for a one way transcon upgrade - so the difference to buying the FS fare can be very low.

    So you have FS fares at $500 one way and $2000+ as standard F fare. And coach is $300+ one way.
     
    tondoleo likes this.
  5. gleff
    Original Member

    gleff Co-founder

    Messages:
    3,616
    Likes Received:
    6,793
    Status Points:
    4,670
    I haven't been sitting in back much, and will certainly look at the price differential and what i think my odds of a free upgrade are, I've seen $100 premiums for DCA-MIA and $50 premiums for DCA-JFK. Actually I've seen $100 premiums for DCA-MIA when there were only 4 F seats left for sale and the EXP upgrade window hadn't yet opened. That's a pretty big incentive to just buy the seat.
     
  6. TheBOSman

    TheBOSman Silver Member

    Messages:
    290
    Likes Received:
    515
    Status Points:
    560
    I prefer this to TODs, at least us EXPs have the same chance at it as everyone else. Pay for F (now somewhat reasonably priced), or take chances with the gate lottery. Seems fair enough to me, I still received my BOS-LAX upgrade this weekend at T-24.
     
  7. NYBanker
    Original Member

    NYBanker Gold Member

    Messages:
    32,725
    Likes Received:
    191,901
    Status Points:
    20,020
    Selling first class seats. Novel idea! ;)
     
  8. horseguy

    horseguy Gold Member

    Messages:
    276
    Likes Received:
    2,009
    Status Points:
    1,025
    There have been a few threads on flyertalk about this subject. I priced a bunch of flights from where we live (Orlando) and was astonished by what I saw.

    Historically, the lowest first class price has been around 5-10% lower than what we pay on our Aairpasses. Now it appears that most destinations are being priced 40-50% less than the Aairpass price. I predicted my family will rarely be using on Airpasses going forward.

    AA also appears to be offering seriously discounted first class international product, something I've never seen before. For example, MCO-LHR a few months out is $9406 each way in F, but discounted first P-class can be had for $3469. AA might actually start selling some of those...
     
    eponymous_coward and tondoleo like this.
  9. anabolism
    Original Member

    anabolism Gold Member

    Messages:
    1,403
    Likes Received:
    1,771
    Status Points:
    1,120
    A domestic price difference of $50-300 is something I'd pay to guarantee F and earn more mikes (CoS bonus) and EQP. Problem is, for work travel, my company doesn't have an easy way for me to opt for a more expensive fare but get reimbursed for the cheaper one. I suppose I could the agency ticket in Q or whatever, then call AA to re-ticket in P, but I'd probably have to pay change fees, or can those be waived by buying a higher fare or within 24 hours of ticketing?

    Sent from my iPod Touch using milepoint
     
    tondoleo likes this.
  10. firstglobal

    firstglobal Silver Member

    Messages:
    94
    Likes Received:
    163
    Status Points:
    380
    In my experience, the change fees are not waived - although I have no idea if a 24 hour window matters. This is why I expect everyone to go to the TOD model eventually (although hopefully with costs set a bit more appropriately than UA have been doing). There are plenty of folks who would pay a bit more for an upgrade but can't because of the way business travel is booked.
     
    tondoleo likes this.
  11. Mike Reed

    Mike Reed Gold Member

    Messages:
    2,414
    Likes Received:
    3,574
    Status Points:
    2,025
    I saw this on a DFW-ATL flight I booked last night. Q Econ was ~$187, special F was ~$380. That's not enough of a flight for me to pay $200, but it's a more reasonable difference between the two given the actual service changes between cabins on this < 2 hr domestic flight.
     
    eponymous_coward and tondoleo like this.
  12. tondoleo
    Original Member

    tondoleo Gold Member

    Messages:
    16,063
    Likes Received:
    100,905
    Status Points:
    20,020
    Agreed.
     
  13. Mike Reed

    Mike Reed Gold Member

    Messages:
    2,414
    Likes Received:
    3,574
    Status Points:
    2,025
    We use Concur, and it allows me to ask for less than the actual cost of the item I'm submitting the receipt for. I suppose I'd have to submit a Matrix description of the economy fare to justify that... but I could make it work. Since I don't need the EQP, though, I can't personally justify the up charge when I'm already in the lottery.
     
    viguera likes this.
  14. eponymous_coward
    Original Member

    eponymous_coward Gold Member

    Messages:
    1,901
    Likes Received:
    2,975
    Status Points:
    1,470
    Indeed. The other thing is if AA is going to invest considerable cash in having a premium product going forward, it's not unreasonable for them to find out where the optimal pricing point is with respect to revenue management, and if this boots some mileage runners who love doing TPA-MIA-JFK-ORD-DFW-LAX-PVG mileage runs for $800 to get back to EXP (while being upgraded all the way courtesy of EXP and a SWU)... too bad. ;) Giving away F to elites has not surprisingly yielded us death by a thousand cuts as the costs of providing F gets decoupled from revenue derived from selling it, and F thus becomes a target for the beancounters doing cutbacks.
     
  15. anabolism
    Original Member

    anabolism Gold Member

    Messages:
    1,403
    Likes Received:
    1,771
    Status Points:
    1,120
    I disagree -- free domestic upgrades is, to me, a major benefit of AAdvantage.

    My recollection is that the cutbacks in F started years before the free upgrades, and I think there are still a decent percentage of people in F who've paid for it (e.g., bought a premium ticket (maybe a discounted one), bought an international premium ticket (maybe a discounted one) with some domestic legs, used miles for an F award).
     
  16. eponymous_coward
    Original Member

    eponymous_coward Gold Member

    Messages:
    1,901
    Likes Received:
    2,975
    Status Points:
    1,470
    It's not going away- nobody else is abolishing it. DL, UA and AS have all done various forms of this. None of them have abolished free F upgrades on space-available basis.
     
  17. mowogo
    Original Member

    mowogo Gold Member

    Messages:
    7,078
    Likes Received:
    12,942
    Status Points:
    12,520
    Actually, the service I've gotten on the flight makes that a tempting buy-up
     
  18. anabolism
    Original Member

    anabolism Gold Member

    Messages:
    1,403
    Likes Received:
    1,771
    Status Points:
    1,120
    I didn't think it was going away, I thought you were advocating for it going away. Sorry if I misunderstood your point.
     
  19. eponymous_coward
    Original Member

    eponymous_coward Gold Member

    Messages:
    1,901
    Likes Received:
    2,975
    Status Points:
    1,470
    My point is probably something like this:

    Airlines should set F cabin prices much closer to market clearing prices, with an expectation that since, like a banana or baker's goods, sometimes you'll have "spoilage" that is better to give to elites/high-value customers as goodwill for their patronage, than to let go empty.

    This incents the airline to have consistent quality and to be competitive with others, since a shabbier F cabin that you have to sell (as opposed to give away) isn't as attractive to potential customers as those of competitors who invest in their F product. It's very clear that AA is doing this going forward, given their fleet turnover, with enhanced domestic and three-class F, as well as the grace notes they are adding (pajamas, F checkin in LA, and so on). I hope they are successful at doing this.

    I realize that airlines doing this reduces the odds of cheap bastards like me being in the F cabin. I don't mind it so much because most of my travel is OK in Y and I would rather have better F cabins less frequently than shabby F cabins more frequently- and I realize that I am a quintessential free rider when it comes to airline premium cabins. ;)
     
    horseguy likes this.
  20. anabolism
    Original Member

    anabolism Gold Member

    Messages:
    1,403
    Likes Received:
    1,771
    Status Points:
    1,120
    What you describe is very much the way many non-U.S. airlines operate. It's a different way to structure a FF program, and provides different incentives to people. Personally, I'd be far less likely to go to such great lengths as I do to keep flying AA if I didn't get frequent upgrades. I understand making international F much harder to get in exchange for much better J, but personally, on a domestic flight, I'll take a shabbier F that I almost always get over a super fancy F that I almost never get. On a four hour flight, it's all about the extra space and better seat. The food is nice, but I'd pay for that if it came to it.
     
  21. eponymous_coward
    Original Member

    eponymous_coward Gold Member

    Messages:
    1,901
    Likes Received:
    2,975
    Status Points:
    1,470
    The thing is, would this actually cost AA revenue over selling your Y seats to Joe Kettle through Kayak and selling more F seats that you would have upgraded into?

    Also, I suspect that it will be hard to monetize F on <3 hour flights, so free upgrades will still exist (it's going to be longer flights where it sells out more). WN's success sort of shows that an F product is not a particularly important component of domestic shorthaul flying. Where it comes in is in longer flights.
     
    horseguy likes this.
  22. anabolism
    Original Member

    anabolism Gold Member

    Messages:
    1,403
    Likes Received:
    1,771
    Status Points:
    1,120
    Not my field, so I wouldn't hazard a guess. I'm sure there are a lot of factors that are not obvious to me. Note that I do a mix of domestic and international travel, as well as business and personal. The purchasing decisions I make are quite different (I'm happy to pay more for a personal ticket to get F or even to get higher EQP, but for business travel I must adhere to corporate rules just to be able to fly AA).

    Maybe the conclusion is that F is not important domestically, or maybe it's that there is a significant segment of passengers for whom it isn't important (these are quite different conclusions). As I said, this isn't my field, so I freely admit I have no clue.
     
  23. horseguy

    horseguy Gold Member

    Messages:
    276
    Likes Received:
    2,009
    Status Points:
    1,025

    I agree that a market clearing price for F cabin is what the airlines should be aiming for. And that is noteworthy because the airlines, AA in particular, have done such a great job of building pricing tiers to extract every dollar possible from people. The exception has been the first class cabin. It seems like the airlines just forgot about playing the same pricing and tier building games with the seats in the first class cabin. It appears that those days are coming to an end. I do expect AA to see a drop in Aairpass revenue, but I expect the extra revenue from selling many more first seats should more than make up for it.
     

Share This Page