Why Free Elite Upgrades Cost You in Any Economy

The recession drives United to go the Free route, which seems like great news, but it’s really a bad omen.

Last month, United announced the launch of a new “free unlimited” domestic upgrade program for its elite-status members, doing away with elite upgrade certificates (which were earned by flying, or purchased from United). The new program will offer members and a companion automatic free upgrades (with a 48- to 120-hour confirmation window, determined by elite-status level) for travel within the U.S., Canada, the Caribbean, and Central America. Link to details: United Elite Upgrades

At first glance, “free unlimited domestic upgrades” sounds like a great benefit for United Airlines elites. But further scrutiny leads me to contend that the carrier is taking more than it’s giving.

Benefits of United’s Elite Upgrade Program

Effective through the second quarter of 2010, elites can buy upgrade certificates, which normally are sold in bundles of four, for $325. Sample savings: The Los Angeles-New York route (one of the most popular for upgrades), requires ten 500-mile elite upgrade certificates ($812) for the 4,900 mile round-trip. Add that to the lowest economy fare (about $200) and the net cost is $1,012 (plus taxes). United’s lowest Business Class fare is about $2,824; the upgrade saves $1,812 (64%).

United’s Elite Upgrades vs. American Airlines’

AAdvantage, the only other major program that sells elite upgrades, offers them at $30 per 500-mile segment. With the $200 fare, the Los Angeles-New York ticket comes to $500. American’s lowest Business Class fare is about $2,244, so using elite upgrades saves AAdvantage members $1,744 (78%). With United’s Business Class upgrades costing roughly twice what American charges, it’s clear why its Mileage Plus program is inferior to AAdvantage.

Why United’s Upgrade Program Goes from Average to Bad

Okay, but you’re a UA elite member and think you’ll be getting upgrades for free. That’s true, if you ever get one. Like Continental, Delta, and US Airways—other inferior elite upgrade programs for a different reason—United’s new program will lengthen the line for upgrades, with EVERYONE in the bloody program in line for one—given that they are free, and automatic. So those of you who now confirm one of maybe every two upgrades are about to see your odds drop to one out of maybe every three, four, five—who knows? If you’re a cellar-dweller elite member, your upgrade odds will be especially slim.

United’s Motive

The dark side of me whispers that this entire program is a sneaky way of getting United’s First Class habitués to pay for the seat outright. Serious travelers will not tolerate the longer lines and plummeting odds of scoring an upgrade. As more people are willing to step up to the plate, the fewer First Class upgrades there are to give out. So, in the long run, United really makes out: It makes those who really want the First Class seat pay for it, and offers everyone else “hope.” Odds are, only 1K elites will have any chance to get this something for nothing.

Is This All There Is to the Story?

Airlines are famous for testing to see how far they can push changes. In this case, United announced these program changes well in advance of their effective date, in order—we surmise—to find out how disgruntled (and prone to jump the loyalty ship) its most important travelers will become. Admittedly, these current changes are hard to see through; airlines have honed the muddying of benefit-reducing waters to a faretheewell.

If you’re on any rung below 1K, write to UA and say you see through its ploy, and lobby anywhere else you can for reinstating the fees, at a cost in line with American’s to shorten the upgrade line, and raise the odds of playing elite upgrade roulette.

[aside headline="Memo to American’s CEO, Gerald Arpey" alignment="alignright" width="half" headline_size="default"]

If history tells us anything, you can bet that American will match United’s elite upgrade move. We plead with you: Be different, fly by your own lights. And sure, we have a selfish motive: $300 round-trip for a transcon upgrade is a small price to pay to keep my elite upgrade odds significantly higher.

AAdvantage members: If there were ever a time to say “hi” to Mr. Arpey, it’s now. Domestic elite upgrade programs could soon be worth close to nothing for those who value them most.

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Decoy or Airlines Confusion

Another unsatisfying feature of United’s new program is that it will allow First Class upgrades (domestically) from discounted Business Class fares (code Z). This would appear to be great news, but when was the last time you saw a domestic Z fare? Furthermore, on the rare occasion you see a Z fare, it’s on the airline’s p.s. transcon service. Sorry Charlie: United stipulates that the upgrade is not available “on three-cabin transcontinental p.s.-branded flights.” That “p.s.” stands for premium service, which includes First Class suites, and is offered only on the two most popular transcon routes (Los Angeles and San Francisco to New York). This only shows that the fare and mileage departments don’t always work together. It’s another reason to become an elite with American, as all its domestic routes qualify for elite upgrades, unlike United, whose most popular routes will see the end of elite status upgrades altogether.