business

One of the most sought after benefits for frequent fliers is not free tickets, but the chance to escape the cattle car in the back, and sit up in business or first class with an upgrade.

But as most frequent fliers also know, those upgrades are not always easy to come by. Sometimes an airline will only release a few seats, other times passengers with higher elite status get all the upgrades. And sometimes an inexpensive fare is simply not upgradable.

Delta is one of the worst offenders on the non-upgradable fares. Sometimes, in fact, the only fares that are eligible for upgrades cost as much as the lowest discounted first or business class fare.

United Airlines and American Airlines, however, use different strategies. United limits mileage upgrades to a mid-level super-saver fare, which usually eliminates the lowest sale fare. The lowest upgradable fare, for example, from San Francisco to London in November of this year is $1,102 total. And requires 60,000 miles roundtrip. While the lowest sale fare is $775.

In United’s case, there is also the unusual corollary that some consolidator fares are eligible, if they are booked in an “H” or higher class of service. (Also, some special upgrades given to their highest level fliers are less restrictive, but that’s a whole different post.)

American on the other hand, allows mileage upgrades with most fare types, with the little caveat of a “co-pay.” Simply put, a co-pay is an additional charge that must be paid along with miles to upgrade any discount fare.

In a recent example, my clients who were flying from San Francisco to Rio de Janiero on American had enough miles to upgrade, and we found a fare for $1,002. To confirm the upgrade, however, however, required not only 50,000 miles roundtrip, but $350 per person each way, $700 roundtrip. Bringing the total ticket price to $1,702.

The lowest business-class fare in this case was around $4,000, so the clients decided to do it. But spending almost as much as the ticket cost for the upgrade did leave a slightly bitter taste.

The advantage of a co-pay, as American will tell you, is that passengers only pay when the upgrade is confirmed. So you don’t have the also bitter result of having paid for an upgradable fare, and then ending up sitting in coach.

Besides the fact that the co-pay can make a ticket really expensive, there are a couple other disadvantages. First, for anyone getting reimbursed for a trip, there are two separate charges, which may pose a problem with accounting departments. (And for most people, spending their miles is one thing, spending their money is another.)

The other issue is from a corporate travel department or agency perspective. Many large companies and agencies still do get some discount or commission on many international tickets. But only on the base fare. Not on surcharges, taxes, or things like co-pays. So that additional charge goes directly into the airline’s pocket.

As of January 2010, United is switching over to a co-pay model, with more of a sliding scale than the American program. They have already postponed this change once. But barring any further postponement, travelers on any sort of real discount fare, unless they are in the highest elite level, will have to start ponying up money as well as miles to get out of coach.

How about you? Do you prefer the all-mileage upgrade or the co-pay model. Not that airlines always listen to travelers. But we know for a fact that many of their executives do read this blog. (Mostly because they complain if we get anything wrong.)

(Photo by estzer/creative commons/flickr.)