Causing Deeper Thinking about the Various Ways of Upgrading within North America
In April, FCF detailed why Delta was offering new, deeply discounted First Class domestic seats. That bold move has had an effect, finally, on other airlines, which hasn’t changed the First Class landscape entirely, but it’s not a one-off either. Here’s more on how Delta’s initiative is influencing First Class fares across other airlines.
Delta Increases the Number of Routes with Deep Cuts Up to 55%
The airline still offers discounted First Class fares on many routes and many have become even lower. The biggest surprise is that Delta now offers a promotional First Class fare on its New York-Los Angeles (LAX) transcon, one of the most expensive domestic routes. The First Class fare in April, $3,118 (plus taxes and fees), has dropped to $1,390, a decrease of $1,728 (55%). Other examples of routes that have seen fare decreases include New York-New Orleans at $714 (down from $874) Atlanta-Detroit at $566 (down from $710).
[aside headline="" alignment="alignright" width="half" headline_size="default"]Due to lack of space we were not able to show as many fares as we would have liked, so please look for more deeply discounted First Class fares this month in our newsroom[/aside]
Delta’s Biggest First Class Effect: On US Airways, up to 45%
US Airways has seen the light. Not only did it match most of Delta’s domestic First Class fares, but it undercut Delta on many routes. From Atlanta-Phoenix, US Airways charged $1,018 in April, but has dropped the price to $558 (45%), as the Delta fare is $862. The message to Delta: Don’t try to mess with our hub city. (The one place it didn’t cut deeply is its transcon LAX-Philadelphia route, reducing the fare only $350.)
US Airway’s Domestic First Class Fare Update 2011
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American: On some routes, especially where it competes with Delta head-to-head, AA has dropped its First Class fares. Such routes include New York-Miami at $1,046 (down from $1,454); Chicago-New York at $756 (down from $1,644); and Chicago-Atlanta at $838 (down from $1,246). However, it’s far from across the board. FCF recommends that you always check to see how AA’s First Class fares compare.
United: Similar story as AA: Always check published First Class fares, especially on routes where United competes with Delta. Example routes that have seen a fare decreases include Chicago-New York at $756 (down from $1,654) and Chicago-Atlanta at $844 (down from $1,256).
Continental: One can only assume that its merger with United has given Continental tunnel vision, as it does not seem to be paying attention to the competitive environment. Fares have basically remained unchanged.
Fare Trend Impact: On Mileage Upgrade Decisions
You might not want to use miles to upgrade when domestic First Class fares are very low:
Especially when an upgrade may incur a cash co-payment, spend the money instead on the ticket and reap the miles. Always check the published fare before using your miles for an upgrade. Some examples:
American: Allows mileage upgrades on any published fare and charges 30,000 miles r/t plus a $100 co-pay surcharge r/t, so on a Chicago-Minneapolis r/t, the cash outlay (including the co-pay) is about $300 plus 30,000 miles—versus the new First Class price of $414—which doesn’t require any miles! The cost to replace the 30,000 miles is about $750 (plus taxes and processing charge), so you’re actually down $600 plus the 50% mileage bonus miles if you upgrade with miles.
Delta: Allows upgrades on some fares (B, M, H, Q and K on domestic routes) and charges a flat 25,000 miles r/t. On its New York-Miami route, the First Class fare is $586 and the best upgradable fare is $446 plus the 25,000 miles. Given the cost to replace the 25,000 miles is about $728 (plus taxes), you could be down about $590 plus the 50% bonus miles.
United: Allows upgrades on the lowest published fares for up to 40,000 miles r/t, plus a $150 r/t surcharge (one of the highest mileage and co-pay requirements). New York-Chicago r/t First Class fare costs $756 and the upgradable fare, including the co-pay, is $428 (W class), plus 35,000 miles. The cost to replace the 35,000 miles is about $1,317, so you could be down $989 plus the 50% bonus miles.
US Airways: Charges a flat 30,000 miles r/t to upgrade. On Phoenix-Omaha for example, a coach ticket costs $308 plus 30,000 miles as opposed to $414 for the published First Class fare. The cost to replace the 30,000 miles is about $825 (plus taxes), $719 higher and miss out on the 50% bonus miles.
Fare Trend Impact: On Mileage Award Decisions
Think twice about using miles for a free award ticket when First Class fares are low, too! Most airlines charge about 50,000 miles r/t (Delta asks 45,000) for a domestic award ticket. In order to get at least a 3¢ return on your miles (the minimum, in FCF’s opinion, as that’s the price airlines charge for miles approximately), your published fare would have to be at least $1,500.
Fare Trend Impact: On Elite Upgrade Decisions
When elite upgrade roulette odds get worse: With some First Class fares starting as low as $400 r/t, many more travelers are going to buy the ticket, which fill the cabin sooner and end up lowering the odds of scoring an elite upgrade. So don’t buy economy and wait to upgrade if the First Class fare is otherwise low. Some examples:
American Elites: A First Class Chicago-Minneapolis fare is about $414 for a three-hour r/t flight. In coach the lowest fare starts at $200, and if you choose to buy the 500-mile elite upgrades, the cost increases to $260 ($30 per 500-mile segment and two are required for the r/t). It’s worth springing for the First Class ticket, as you earn a 50% mileage bonus and EQMs, and there’s no upgrade anxiety.
US Airways Elites: A 21-day advance purchase First Class Phoenix-Omaha fare is about $478 for a five hour r/t flight. In coach, the lowest fare starts at $308. But for First Class you earn a 50% mileage bonus and forego upgrade anxiety.
When elite upgrade roulette odds get better: When First Class fares are on the high side, especially on transcon flights, mid-to-top tier elites still have good odds at finding upgrades to First with few paying the fares. For example, on Continental, the odds haven’t changed since the carrier has stayed out of the fray.