Speculation/Rumor: AA Selling Upgrades Before Clearing Elites?

Discussion in 'American Airlines | AAdvantage' started by DestinationDavid, Aug 19, 2012.  |  Print Topic

  1. DestinationDavid
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    DestinationDavid Milepoint Guide

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    Started on FT: LINK....

    And JonNYC's comments from TB: LINK.

    Will be watching very closely how this pans out. Should emphasize that there is nothing solid yet, but interesting enough that I figured a post was warranted if folks wanted to discuss.
     
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  2. Eloy Fonseca Neto
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    Eloy Fonseca Neto Silver Member

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    This is not news to me! I remember I made a comment about this on another thread about my parents paying the upgrade over the phone on a flight from MCO to NYC and being cleared before the elite window time, and it wasn't the fare change, because they only payed 70 dollars to go to F with an X BP!
     
  3. kw335
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    kw335 Silver Member

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    It appears that the upcharge for your parents were calculated based on the distance of the flight ($70 = the cost of two stickers). The OP's colleague on TOBB, however, was offered $90 for DFW-DEN. I believe the distance between DFW and DEN is only ~641 miles.

    Is $90 just an arbitrary price that AA.com offers? Had the OP's colleague agreed to pay for the upgrade, I wonder if s/he would clear to X or another fare class?
     
  4. DestinationDavid
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    The $70 price matching the cost of two stickers bought with AAgent assistance is part of the reason many did not view the previously mentioned incident above as a sign of a change and rather a misunderstanding/misremembering. It's common to purchase stickers at that price to upgrade, or to get a LFBU at slightly higher price as well, both of which were known attributes of the AA program.

    This offering of an upgrade and as noted by JonNYC the OP's access to the actual upgrade list and an understanding of how to read it is a bit more unique.

    No thoughts on the $90 price, tbh.
     
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  5. sukn
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    sukn Silver Member

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    $45/500 miles is the standard LFBU price.
     
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  6. kw335
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    kw335 Silver Member

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    Thanks for the clarification. I stand corrected. I guess as EXP I never had the opportunity to LFBU :)
     
  7. DestinationDavid
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    It's been about 4 years since my last LFBU offer. Seems so long ago!

    Indeed the LFBU price is listed in the Flyerguide: LINK.
     
  8. PosauneGuy

    PosauneGuy Silver Member

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    I have to say that I was surprised when I was offered LFBU through OLCI earlier in the month. First year of being non-elite after a number of elite years, and what was surprising is that I was traveling with my two kids. We were offered 3 upgrades for ORD-PHX. We checked in at T-23. Of course, I don't know if they cleared all the upgrade requests prior to our offer, but I thought it strange that they'd have 3 first class seats to offer. (I didn't accept the offer--no sense in spoiling the kids at this age!--but I think there were a couple of names on the upgrade list at the airport and flight went out full.) I did wonder if I had accepted the three upgrades would some elite members not have gotten their upgrades.
     
  9. DestinationDavid
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    There are some elites who do not request upgrades when they purchase tickets and only put their request in when they check in for the flight at the airport, thus allowing LFBUs to be offered to non-elites during OLCI and later having elites added to the upgrade list.

    That's what makes the situation linked to above so unique, it happened to an individual who has access to the upgrade list to view the activity prior to the flight taking off, so he can see that there are elites still waiting for upgrades while his friend was offered the LFBU.

    Welcome to MP, btw. :)
     
  10. JonNYC
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    JonNYC Silver Member

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    thanks for the link-over.
    Update here:
    http://www.travelingbetter.com/forums/showpost.php?p=38576&postcount=23
     
  11. John777

    John777 Silver Member

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  12. DestinationDavid
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    There's an ongoing discussion of that in the thread on TB. Seems the gist is that AA will sell LFBUs if the system believes it has enough seats to accommodate all upgrade requests from elites without actually clearing the list prior to offering them.
     
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  13. JonNYC
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    JonNYC Silver Member

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    That is definitely the case.
     
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  14. DestinationDavid
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    Which is good to know and expands my understanding of AA's upgrade system. Definitely something I hadn't known previous to this whole saga.
     
  15. gleff
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    gleff Co-founder

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    But at least as far as we know now, there's no "Tens of Dollars" approach at American like there is at United -- American offers up buy ups only when they expect all elites that have requested upgrades prior to checkin to clear. The model could be wrong, someone could buy up and then something unexpected causes elites not to clear.

    I'd rather them clear elites before offering paid buy up options. But this isn't the same thing as selling upgrades on the cheap instead of offering upgrades like we see on Continental.
     
  16. DestinationDavid
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    Agree that there still seems some small room for a unique situation to bump elites who are lower on the list, but nothing major enough to get worked up over.

    Till it happens to me that is. :)
     
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  17. The Saint
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    The Saint Silver Member

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    Let me see if I understand correctly. You want a bankrupt airline to give away upgrades for free rather than earn some revenue from them?

    Remarkable.
     
  18. DestinationDavid
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    This thread is more about a potential policy change than anyone griping about upgrades. Though not mentioned here, in the links above the general idea seemed to be that elites would like to be offered the change to purchase the upgrades before non-elites if this policy change had taken place, which is a view that I held. So while there will always be gripers, I don't think that label applies to most posts in this thread.

    Not to mention I'd wager AA would lose more money in the long run by driving elites away with an uncompetitive elite program than it would by selling upgrades for $90/$180 a pop, so I don't think I'm even on board with the idea that the path out of bankruptcy is to have a fire sale on everything including the kitchen sink.

    Ultimately I think our main goal is to know what the program allows, not really to complain about it all day. At least that's MY goal. :)
     
  19. newbluesea
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    newbluesea Gold Member

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    Of course people who know absolutely nothing about a specific program may have have a different agenda for posting here... seems things must be pretty boring elsewhere.:)
     
  20. Mike Reed

    Mike Reed Gold Member

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    Some people think bankrupt means cashless. Let them continue to do so.
     
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  21. DestinationDavid
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    To reference the Wizard of Oz.... "Pay no attention to the billions in unrestricted funds behind the curtain!"
     
  22. The Saint
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    The Saint Silver Member

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    I'd be pretty confident that a person with a double digit IQ could grasp the fundamentals of the AAdvantage proposition. Let's see.

    If you are an EXP on a coach fare on a domestic service you expect spare seats in F to be given out to you for free.

    This free upgrade bonanza has become a mainstay of the legacy carriers frequent traveller programmes in the US. It has led to a situation where carriers have cannibalised their F product, and even produces absurd results that paying pax cannot purchase an F seat last minute on some carriers because they've all been handed out to the self-styled "elites". That's just absurd.

    The carriers have allowed themselves to become captured by the "elites" threat that they'll take their business elsewhere if their demands for free upgrades are not met. On any view this is a broken model.

    Only the US legacy carriers have this model. This provides tangible evidence that it does not make good business sense. Of course a frequent flyer programme needs to reward loyalty, but it also needs to incentivise spend in premium cabins. The US model does little to promote the latter and few people are spending money on F fares. Indeed, such is the expectation of upgrade to the F cabin, the scheme is a positive disincentive to spend on premium domestic fares. Look at UA. At the gate, they show you a pictorial representation of the open seats in each cabin together with a list of the "elites" with their hand out for an upgrade. You can regularly see a cabin filled with 90% upgrades.

    Compare that with the (not bankrupt) European and World airlines. They upgrade to premium cabins only where there is an operational need. For BA at least, the standard procedure is for op-ups to go to the highest ranking members of the programme. But critically, if a pax expects (or wants) to travel in a premium cabin, the expectation is that s/he will pay for it and the scheme rewards those who do in other ways. European carriers regularly allow planes to leave with empty seats in premium cabins. Of course they could fill all of these seats by upgrading pax, but they don't in order to protect the brand. On BA it works very well, and the same model is followed by LH, SQ, CX etc.

    And we return to the central premise, which holds good for most businesses: you are making a mistake to give away for free something for which there is a demand from people who would pay. The legacy carriers need to break away from the broken model. Selling upgrades before giving them out would be a good start. Who knows, it might restore some actual class to First Class for which more people might be prepared to pay more.
     
  23. gleff
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    gleff Co-founder

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    It strikes me that the comments in the post above apply to American least of all of US legacy airlines, and so are especially misplaced here.

    1. American posted a US$135 million profit for the month of July. In contrast, the second quarter loss for BA parent IAG was US$116 million.

    2. American's domestic premium cabin product is superior to BA's (or LH's, or AF's) intra-Europe premium cabin product.

    3. American holds back seats for sale and to re-accomodate displaced F passengers during irrops, American is probably the most aggressive of any US airline when it comes to pricing first class seats, they're pricing them to sell rather than so high that no one buys them.
     
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  24. The Saint
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    You'll have to do better than that.

    1. Here's the BBC report if the half year figures for IAG. http://www.bbc.co.uk/news/business-19107667. You'll note,

    "Despite those higher fuel charges, UK airline British Airways turned a small operating profit of 13m euros at the start of the year. The group's main problems reside with its Spanish carrier Iberia."

    2. Not sure this is accepted as a universal truth. Shorter EU flights on BA have better food and are marketed as a business class service than equivalent AA flights. But even were your claim to be correct, it makes it all the more incredible that pax in Europe are prepared to pony up significant fares to travel in this sub-standard service.

    3. I know that, but that is mitigation, not justification. So great is the sense of entitlement of the "elites", that I'm not sure that the suggestion that F seats should go to displaced revenue F pax receives universal support. And if AA is really trying to sell its F cabin rather than give it away, that would lead it to conclude that a formalised system of pro-active upgrades for payment would be entirely consistent with this aim. By all means open it up to the "elites" and, if there remain spare F seats as departure nears give them away, but it's time for AA to give up this something-for-nothing nonsense.

    And your 3 points hardly begin to provide any justification for this policy.
     
  25. gleff
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    gleff Co-founder

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    My point is the AA policy isn't what you're describing it to be. AA proactively holds back F seats for sale and for re-accomodating F passengers during irregular operations. Maybe you could level your arguments against other US carriers, but they really don't hold up against AA.

    Arguing that BA made a small operating profit (excluding all sorts of costs) is beside the point, AA is making money under what you characterize as (a strawman of) its policies. And dismissing IAG losses as driven by Iberia misses the point, Iberia has been bleeding money for awhile despite pursuing the policies you'd recommend.

    You think the upgrade procedures are nuts but there's a tremendous amount of hubris in that statement considering it's (1) made despite lots of smart people in the US at several airlines who both have access to and analyze the data, (2) broad, sweeping, and seems less applicable to AA (the point of this thread where you make the claims) then to other carriers.

    AA also sells loujnge memberships whereas European carriers bundle access with premium cabins (in the US.

    Different markets, different customers, different corporate travel policies and cultures lead to different outcomes.
     

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