How Will Upgrades Work For American Premium Economy?

Yesterday I posted about American announcing a premium economy product on some of their longhaul aircraft, which will begin rolling out late next year. It looks like a solid product as far as premium economy cabins go, and will feature both more spacious seats and improved amenities.

American-Premium-Economy-1

On one hand I think it’s a smart move from the airline’s perspective, though at some point you have to wonder if they’re segmenting the market too much. On their 777-300ERs, American will have First Class, Business Class, Premium Economy, Main Cabin Extra, and Main Cabin. That’s a lot of options!

My primary concern with premium economy is if American only allows one cabin upgrades. This means that it’s most likely that you’ll only be able to upgrade from economy to premium economy, or from premium economy to business class. Given how much more expensive premium economy can be than economy class, this is potentially terrible news for frequent flyers.

British-Airways-Economy
British-Airways-Premium-Economy
Economy vs. premium economy cost on British Airways

Executive Platinum members are already going from eight systemwide upgrades to four systemwide upgrades per year, so could you imagine if those continued to only be useful for a one cabin upgrade? Going from eight business class upgrades to four premium economy upgrades per year would certainly sting (though given the state of the industry, also wouldn’t surprise me).

Since yesterday people have been sending me screenshots of interactions they’ve had with American about how upgrades will work with the introduction of premium economy, and are really reading into what they’re saying. But here’s the reality — American doesn’t even know how upgrades will work when premium economy is introduced.

Why? Because American was rushed in announcing premium economy, since they knew Delta was working on a similar product offering (which I’d speculate will be announced tomorrow, but we’ll see). They wanted to beat Delta to the punch in announcing the product, though I think they still want to follow Delta’s lead as far as policies go. After all, in the US airline industry Delta leads the way, and then the others follow.

Now Delta is rushing to introduce their premium economy product, since they didn’t expect American to introduce it so quickly. Delta will likely also announce premium economy in a rush, meaning they might not publish upgrade policies right away either.

The moral of the story is that Delta will likely set the precedent with how upgrades work when premium economy is introduced, and American will follow. Based on all the sources I have, American truly doesn’t know what they’re going to do yet.

How could this end up? It might be worth looking at how American’s two biggest joint venture partners (probably the motivation for American introducing premium economy) do it:

  • British Airways only allows one cabin upgrades, so you can upgrade from economy to premium economy or from premium economy to business class, but not from economy to business class
  • Qantas does let you upgrade from economy to business class and skip premium economy, though they charge an obscene number of miles, and upgrade priority is given to those who are booked in premium economy

In theory I suppose it’s possible that Delta and American introduce separate “business class” upgrade certificates and “premium economy” upgrade certificates, though I wouldn’t count on it. My money would be on upgrades being one cabin, though maybe they’ll try something creative. A few possibilities include:

  • Allowing you to double upgrade using two systemwide upgrades
  • Allowing you to upgrade economy to business class using substantially more miles than were previously required
  • Issuing special upgrade certificates at some mileage threshold which are good for a double upgrade

Bottom line

The moral of the story is that American really doesn’t know what they’re going to do with international upgrades. They hurried to beat Delta in announcing the new product, and most likely will follow Delta’s lead when it comes to the upgrade policy.

How do you see upgrades working out with the introduction of premium economy?

Comments

  1. It’s a huge SWU devaluation at the very least (unless the SWUs would still move you from steerage to business, leapfrogging steerage+).

    I think the steerage+ concept could be great for business travelers whose employers won’t pay for business class, but it’s a nonstarter for nearly everyone else. That flight to London might be $900 in steerage vs. only $2100 in steerage+, but if you’re smart and wait for a fare sale, you could fly business for that same $2100 instead.

    I just can’t imagine the thought process that would lead a leisure traveler to book it. If you have enough money that you’d fork over the extra $1200 for legroom and champagne, you’d probably just fly business. Am I totally off base?

  2. I don’t see any reason why they will change the policy for one cabin class as it stands. A coach ticket will get a system wide upgrade to PE, PE to Business, Business to First.

    The airlines are very clearly showing that all they care about is making more money off of their customers than they could previously. This includes devaluing the reward system they put in place to incentivize loyalty to a brand. I don’t begrudge them for trying to be profitable. I do feel as if the changes to their loyalty programs should be more gradual.

    Reducing the number of systemwide upgrades for EXPs and then shrinking the Mile Saver time frame was a double kick to the balls for those of us who worked hard to be loyal to an airline.

    We are going to get pushed to a point as consumers that loyalty won’t matter and we will find the cheapest fare we can fly.

    Not all of us who fly can afford to or have a corporation willing to pay for first or business class fares. That’s just the reality of the situation.

  3. So American is waiting on Delta to see how they’ll “innovate” by doing exactly the same thing? Pretty amusing. Less amusing is that Delta hasn’t exactly made a lot of customer friendly moves of late.

  4. Would it be possible that exp will get free upgrade to pe if that’s not sold out, same as domestic upgrade?

  5. Single cabin upgrade only, period.
    Y to PY or PY to J, but not Y to J.
    Time to kiss good bye to the good old days of buying cheap tickets to Asia/Europe and sitting in the front.

  6. If they kept EXP with 8 SWUs using/needing 2 of them to go from Main Cabin to Business would not have stung so much.

    But reducing from 8 to 4 – and then needing 2 for the same Main-Biz upgrade – they have in effect reduced upgrades from 8 down to 2 a year

    I think they will come up with something in between.

    For me, it doesn’t matter. I generally fly 50k paid miles a year and 50k award miles. Coming over from UA to AA i decided to give EXP a shot with the promise of 8 SWU a year with no W fare class requirement it seemed like a good deal. Now it’s dropped back to 4 SWU I’m not going to do that “bonus” 50k paid mils a year to get to EXP. Just not worth it. I will fly 50k paid with AA – and the other 50k or so on cooler airlines redeeming my miles.

    I like the idea of P.E. class. My main routes are LAX-SYD and LAX-LHR – those are 11 and 14 hour flights. A LONG time in coach! I can do those in P.E. and I am much happier and less stressed and enjoy the flight. So for me this is great. I will buy P.E flights to SYD and LHR (even though they are expensive) and waitlist tp upgrade with miles to Biz. If it doesn’t clear – I am still in P.E. – which is a hell of a lot better than Coach for 14 hours.

    It would be great if P.E. was not priced so high though. I’ve paid $3500k for P.E LAX-SYD.

    But I just cant do that flight in coach anymore.

    Something like

    LAX-LHR
    Coach $1000
    Premium $1500
    Business $3000

    would be good.

  7. As a customer, I’d like to see them do something like issuing single class certs to Plats, Xplat get 4 double class certs or something. To me that’s a creative recognition of the extra flying. That being said, I suspect the best we as can hope for is you can use 2 certs to “double jump”.

  8. We all know that unfortunately Mr. Anderson is the “real” CEO of all US airlines. Whatever he decides to do on Delta which is almost always customer unfriendly the other US airlines just follow like puppies. AA tried to be smart and announce their Premium Economy before Delta but we all see now that is a “half baked” announcement since not even AA knows the rules yet. As some said yesterday it is said but the airline industry is downgrading the entire system. Before there was a huge glamour in flying first class and business class was a great cheaper alternative. And then there was coach. Now what used to be the glamour of first class has turned into today’s frugal business class and they are now adding a Premium Economy at a price of a business class ticket that is shameful when compared to real business. My concern is that corporations trying to cut cost will start changing their policies and have business people flying Premium Economy rather than business class.

  9. Most of AA’s long haul fleet wont have First Class anyway. PE is their solution of offering 3 classes of service without having to add in First Class.

    Like someone else said yesterday, Business is the new First, PE is the new Business. At some point, Business seats are going to evolve and have suite doors and someone is going to offer angle flat PE seats and call it a revolutionary PE upgrade and then evolve it to lie flat seats

  10. I just can’t imagine the thought process that would lead a leisure traveler to book it.

    Business is $5,764.91 on the route Ben mentioned. There are a lot of affluent folks who would be happy to pay $1000 to upgrade into what is basically domestic first class but who can’t stomach $6k for business.

  11. What a pointless and worthless scrap of clickbait. Proof: “American doesn’t even know how upgrades will work when premium economy is introduced.”

  12. Ben,

    Sorry, but that is absolutely false. American was not rushed to announce this because of DL!!. I’ve known about AA launching Premium Economy for months, but was sworn to secrecy.

    American has been prepping for awhile.

    If you knew the head count at their HQ that crunches numbers, you’d be in absolute shock, I know I was. They already know how the SWU’s are going to work, and will announce when ready.

    DL might have been the trend setter for the past few years, but no longer.

  13. Miles already got devalued while I’ve been saving up to take my girl on a trip in the future, come on AA don’t screw me again and make these easier to get with miles.

  14. Does it look odd? We’re coming back in time (on the premium classes only). PY looks like the old J of the 1990s and earlier, and the current J looks often like F did long ago.

  15. I don’t understand why AA opted to publish their new award chart before introducing premium economy. Had they planned to introduce prem economy in 2016, why not publish the new award chart after introducing it? Anyway, I’m ok with PE and if AA and DL are able to sell those seats to keep themselves alive, then so be it. I do have a feeling, however, that at the next award chart devaluation, prem econ award seats will cost around the current price for business class seats and business award seat prices will become higher.

  16. I don’t see a huge deal – “frequent fliers” that are flying long haul should be able to purchase at least premium economy flights on these routes. More likely, they are purchasing directly into business class or first class, as their travel policies should allow for long haul. Frequent fliers that fly a lot on discounted economy seats and get upgraded a lot due to their flying patterns are being systematically demphasized by airlines – which should not be a surprise.

  17. yeesh. really sad how AA has gone downhill. Now they are offering their old biz class as “premium” economy. And their first class really never was a true first class – more like a biz class on other airlines with crappy food. No reason to fly them anymore, especially since they have devalued their FF program to near extinction and the price of their tickets are nearly twice as much as other carriers (who have better service) out of my area.

  18. From what I have seen, I’d rather fly Delta. You get a cheaper ticket with a better seat, route, food and service. The ONLY reason I have ever purchased tickets with AA is because of their frequent flyer program. Now since that’s gone to hell, there really isn’t much of a reason to fly them anymore.

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