An Overlooked Airline Upgrade Option Rarely Found Among U.S. Carriers in 2023.
Air travel often sparks debates among passengers, ranging from cramped seats and reclining disputes to requests for seat switches and battles for overhead bin space. Amid these frictions, a more refined method of engaging fellow travelers is emerging on numerous international flights: the seat upgrade auction.
The mechanics are pretty straightforward. Travelers receive an email about a week before departure outlining potential seat upgrade options. Interested participants provide their credit card details and submit a bid.
The payment is processed if their proposal emerges victorious, resulting in a seat upgrade. Remarkably, this often comes at a significantly reduced cost compared to the original upgrade price at the time of booking.
While this concept has gained traction worldwide, it must still be addressed among major U.S. carriers. Notable exceptions include Spirit Airlines, which extends upgrade opportunities via its SeatBid program, allowing passengers to secure the more spacious Big Front Seat. However, most major U.S. airlines have yet to implement upgrade auction systems.
Zack Griff, a senior aviation writer at The Points Guy, notes that U.S. carriers are likely deliberating the merits and demerits of this practice. After all, upgrades are already woven into their business models.
However, the auction model presents challenges that diverge from the current upgrade mechanisms.
Griff explains, “Traditionally, most major U.S. airlines offer multiple avenues to enhance your flight experience, encompassing extra legroom, premium economy, or business-class seats.
This typically involves redeeming miles, leveraging elite status benefits, or purchasing upgrades like a standard ticket.”
The auction model departs from convention by providing substantial discounts, underscoring a fundamental principle of supply and demand: the availability of unsold inventory nearing flight dates.
Recently, the notion of auctioning distressed inventory—seats that would otherwise remain vacant—at a blind auction has gained popularity. This concept is facilitated by companies like PlusGrade, specializing in “ancillary revenue solutions,” which equip numerous international carriers with the technology for such auctions.
Imagine receiving an email a week before your flight inviting you to an online seat upgrade auction. There is no need to call the airline or make a substantial upfront payment.
You establish your bid, a meter gauges your bid’s likelihood of success, and you wait. You might secure the upgraded seat or not, but you’re engaged in the process without an initial financial commitment. From the airline’s perspective, a winning bidder emerges, and those who miss out are in the same position.
However, only some people stand to gain in this scenario, particularly when considering the current perks provided by U.S. airlines. Consider the devoted flyer who has diligently accumulated points and safeguarded their elite status, partly aspiring to enjoy complimentary upgrades.
Such a passenger might find themselves somewhat unappreciated, holding their select card and contemplating the situation. Airlines are cautious to avoid alienating this demographic.
Prominent U.S. carriers like American, Delta, and United have yet to embrace widespread auction mechanisms fully. This hesitance likely stems from their desire to reserve premium cabin inventory for upgrades via miles, frequent flyer privileges, or last-minute purchases.
Griff posits, “These airlines tout upgrades as a pivotal perk of their frequent flyer programs. Loyal travelers might defect to rival airlines if they consistently sell the remaining premium seats for added ancillary revenue.”
When approached for comment, American refused a response, while the other U.S. carriers remained silent.
In the evolving air travel landscape, seat upgrade auctions are compelling. It offers passengers a chance to vie for enhanced comfort at a fraction of the regular cost. At the same time, carriers navigate the delicate balance of maintaining customer loyalty and generating supplementary revenue.
As the industry ponders the future, the seat auction model could become an intriguing chapter in the ongoing saga of air travel refinement.
The U.S. airline industry’s approach to upgrades might be on the cusp of change, albeit at a pace that doesn’t promise rapid upheaval. Although airlines are not typically associated with cutting-edge technology adoption—where innovations like AirPod integration could be groundbreaking—a shift toward offloading higher-cost seats is becoming increasingly imperative.
Zack Griff, a seasoned aviation writer at The Points Guy, underscores the growing significance of unloading these premium seats, noting that the conventional upgrade process might not align optimally with the bottom-line perspective.
In the immediate term, the flights most likely to drive demand for upgrades—longer international journeys—are also highly coveted by American travelers. However, the emerging reality presents a different facet that could persist for an extended period: a marked reduction in business travel.
This trend, precipitated by the COVID-19 pandemic, might eventually stabilize but is unlikely to revert to pre-pandemic levels fully.
Scott Keyes, the founder of Going (formerly Scott’s Cheap Flights), an online platform linking travelers to budget-friendly airfare options, recognizes both the challenges and opportunities that upgrade auction programs present.
He notes, “Auctioning unsold premium seats has undoubtedly emerged as a major industry trend. Airlines progressively embrace upgrade auctions for premium economy, business class, and first-class seats that would remain vacant.”
For airlines, the rationale is straightforward: Upgrade auctions generate substantially greater revenue than freely granting upgrades. According to Keyes, successful bidders also benefit, often securing front-of-the-plane seats at discounts as substantial as 70% or more.
However, this arrangement inevitably results in those who weren’t even part of the competition being left without an upgraded seat. Keyes explains, “Travelers with elite status, who might have anticipated complimentary upgrades to these unoccupied seats a decade ago, find themselves on the losing end.”
Keyes highlights a pivotal aspect of this potential shift in upgrade dynamics: the phrase “a decade ago.” He elucidates, “Now those seats are sold instead of being provided for free. Many travelers pursue elite status with the expectation—whether justified or not—of being rewarded for their loyalty with future complimentary upgrades.”
If a broader spectrum of airlines embraces auction practices, this hallmark perk of elite status could dwindle. However, such a change would likely be accompanied by introduction of alternative benefits. For example, luxurious private airport lounges could take center stage as compensation for loyal, frequent fliers.
Considering the prevailing state of upgrades within the airline sector and the evolving landscape of business travel, it wouldn’t be surprising to witness an upswing in upgrade auctions among domestic carriers in the foreseeable future.
Such a shift might necessitate the creation of innovative approaches to maintain customer loyalty among frequent travelers.
As the airline industry continues its journey, the transformation of upgrade models promises an intriguing narrative featuring adjustments to cater to changing traveler preferences, economic realities, and technological advancements.
While the pace of change may be measured, the eventual outcome could redefine the passenger experience and loyalty dynamics for years.
