I’ve made no secret of the special place AAdvantage holds in my heart. I fly Delta almost exclusively nowadays, and while I think Delta is a great airline, and operationally the best in the USA, AAdvantage is a program I cannot break up with completely. One of my favorite features of AAdvantage is the way they handle upgrades for elite fliers. Top tier elites receive unlimited complimentary domestic upgrades, but everyone else has to earn upgrade credits, or buy them by 500 mile increment.

While I may be in the minority of opinion on this, I think the benefits of such a system outweigh any positives that might be attained from moving to unlimited upgrades for all. We all have different needs and wants when it comes to our travels, and under an “earned upgrade” system, travelers will only request upgrades they truly care about, meaning lower level elites have an honest shot at more upgrades.

I was actually working for American when the decision was made to move Executive Platinum members to an unlimited upgrade system. If I recall correctly, the theory at the time was that our most frequent fliers were a little upset that other airlines had move to a complimentary system. That was not feedback any of those folks ever shared with me, but I suppose it’s possible in a “grass is always greener” sort of way. When the decision was presented to employees, it came with the caveat that moving all elite tiers to such a system was very costly from a revenue perspective. In short, the airline was actually making some money on upgrade credit sales.

Now that new American has arrived, the consensus opinion is that AAdvantage will move to the same system as the other airlines, especially because US Airways has such a system. While it’s certainly possible, perhaps even likely, I have to wonder if the new American’s, “new” accountants will see things that way? I think we can all mostly agree that among the big domestic airlines, American’s first class catering is a cut above. More meals/snacks on more flights, and a bit better quality too. That doesn’t come without a cost. Revenue does matter, and you can bet there’s a big accounting exercise going on right now. I vote for keeping the current AAdvantage upgrade system. I hope the accountants agree with me.

-MJ, June 2, 2014

11 Responses

  1. 1) American’s ‘new’ accountants were onboard enough that they had unlimited complimentary upgrades at US Airways.

    2) I suspect that revenue from sticker sales have been on the decline anyway. Cabins are full up front and even EXP upgrade percentages seem down as AA has made moves to better monetize the cabin through cheaper F fares.

    3) AA will STILL draw more revenue on average for its F cabin than competitors because of availability of confirmed domestic ugprades combined with the co-pay that isn’t waived for elites.

    I don’t like unlimited complimentary upgrades, I think that system will reduce upgrade percentages for Golds and Platinums. better to make a conscious choice about when you want an upgrade most rather than just competing against every elite every time.

    But it will be hard to take away the perceived benefit from US Airways elites, something they already have and that is offered by both United and Delta.

    Of course if they decide to invest in the program (give up revenue) that way…

    (1) we can expect a lesser domestic F product, since there’s less revenue attached
    (2) the money needs to come from elsewhere in the program, at best from something else they’d have invested in or at worst by givebacks elsewhere. Although I’d hope that April 8 constituted those givebacks already ;)

    Comment by Gary Leff on June 2nd, 2014 at 1:43 pm
  2. I am hoping that the new revenue mix at the combined airline helps those accountants reach the conclusion that the current AAdvantage way is better. :D Only time will tell, but being fully immersed in an “unlimited complimentary” system now, I can tell you it ain’t all that great. Way too many 50+ upgrades lists. Some of that has something to do with where I’m flying, for sure, but still…..

    Gonna be an interesting year.

    PS I should also add…I wonder if the F product at AA is perceived as being more worth “paying for” with upgrade credits too? Just pondering/pontificating.

  3. I am a current EXP Advantage member and I too hope they keep the current upgrade program and only offer auto upgrades for EXP. Even at Platinum and Gold, the current program is much better and gives a better likelihood of getting the upgrade you really want. I currently have a bank of over 60 upgrade coupons and I would like to use those when and if I ever loose status. I have been saving all of those upgrades for a long-haul trip and I’d hate to loose them for one, and then have to compete with the masses of new US Air elites and gold and platinums. If they take them away, then what happens to all of those saved upgrades?

  4. I’m certainly in agreement with all of the above in hoping American doesn’t move away from it’s current system of domestic upgrades.

    I’m hoping Doug and team see enough revenue from sticker upgrades that they decide to leave things alone. Alas, as Gary said, that pile of cash is probably not as big as it used to be.

    It’s also possible (likely) that they expect to cull elites a la the Delta and United method of imposing dollar requirements on elite customers. They may view this as the way to “solve” the problem of 50+ long upgrade lists.

  5. Interesting timing on this post. I am a former AA EXP with over 2 million miles (now lifetime PLAT) who moved to SFO 5 years ago. UA matched my status the first year and I had most, but not all, of my flights upgraded. Due to company travel restrictions I have been PLAT ever year since and I dropped to GLD this year. My upgrade rate as PLAT was much less then 50% and was getting worse as time passed. I haven’t been upgraded once this year.

    Due to the merger, there are more AA/US choices out of SFO now and my first AA trip (SFO-JAX) starts tomorrow. The DFW-JAX leg was upgraded at the window and I just got notified that the SFO-DFW cleared. I was completely shocked when I got the email. That’s how accustomed to NOT being upgraded under the UA unlimited upgrade system I am, especially in advance. I happily just spent $60 for the 2 upgrades I was short and can now relax knowing exactly what’s in store for me tomorrow. And the food will actually be edible!

    If I was on UA I most likely wouldn’t be upgraded and I’d be going through the “will I or won’t I” stress at the airport tomorrow. NO THANKS…I sure hope they keep the current system!

  6. If they kept a paid upgrade for all
    6 days out EXP
    5 Days out PLat
    4 days out Gold
    3 days out free EXP
    2 days out free Plat
    1 ay out free gold
    or had a similar wait list that may be best of both

  7. […] how well it will work in practice. I’m sure we’ll hear reports starting Wednesday. I posted last week that I really hope the new combined program maintains the AA way of dealing with upgrades. I think […]

  8. […] posted previously about my desire to see the current way that American Airlines handles its AAdvantage elite upgrades […]

  9. […] you create a lot of demand with a limited supply. I know I’ve blogged about it before, but I much prefer the AA way of doing things when it comes to upgrades for elites. With a system […]

  10. […] blogged a bit about the things I hope the new American does and does not change. While I think that over the longer term, it is more likely than not that AAdvantage morphs […]

  11. […] struck a nerve a while back when I opined that I really hoped the current upgrade system in place with American AAdvantage remains in place […]

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