American Airlines And US Airways Move Closer On Reciprocal Upgrades, But They Have Other Work To Do

View From The Wing has some thoughts this morning on an announcement from American Airlines that reciprocal domestic upgrades are weeks away, not months.

I actually wasn’t expecting this move so soon because of the technical difficulties in getting everyone on the same upgrade system, but Gary brings up a good point that it could be an interim solution that lives inside of the existing upgrade procedures.  Let’s recap those real quick.

American Airlines offers unlimited domestic upgrades to Executive Platinum members, their top tier.  Platinum and Gold members earn certificates that they can redeem for upgrades (500-mile upgrades).  I still think of them as stickers, as they used to be physical stickers you could redeem.  The upside there is that there were some ticket agents who wouldn’t take the sticker from you when processing an upgrade, so you could use them more than once.  Now, Gold an Platinum members earn 4 500-mile upgrades for every 10,000 miles of paid travel they have.  They can buy more upgrade certificates as needed.  But, because some Gold and Platinum members don’t want to pay for extra upgrade certificates, Executive Platinum members generally enjoy better upgrade percentages than their top-tier piers at other airlines.

US Airways employs a system used by the other domestic legacy carriers, United and Delta.  All elite members earn unlimited free upgrades, prioritized by status level.  Lower level elites don’t have to pay for upgrades but may have a difficult time clearing upgrades on popular routes.

I’m a big fan of the American Airlines system, due mostly to the fact that I’ve cleared over 98% of my upgrades as an Executive Platinum over the last 4 years while averaging closer to 50% on United as a 1k.  In the beginning, I thought for sure that American would adopt the US Airways system because that was Doug Parker’s preference.  But, if the sale of upgrade certificates is substantial, I could see Doug raise the price of  “stickers” and keep them around.  Another reason I think this is more likely now is because of the shrinking of some of the first class cabins domestically.  They’ll likely want to sell seats for upgrade like US Airways does, and using the “sticker” sale method they may be able to market these better to elites.  We’ll see.  I certainly wouldn’t bet money on either outcome.

At any rate, as Gary suggests, it’s likely a temporary solution where American Airlines elites get free upgrades on US Airways flights and Chairman Preferred members from US get unlimited upgrades on American Airlines flights, to match the Executive Platinum benefit.  I’m not sure how they handle lower tier elites from US Airways as there’s no easy way to start tracking progress towards earning 500-mile upgrades for them.

Before they do that, they need to fix their pricing, IMO.  I was getting ready to write this as a separate post, but it’s relevant as it relates to upgrades, since I’m not 100% sure how they’ll implement.  They could announce two general systems:

1.  American Airlines’ elites who buy a codeshare flight on a US flight from AA.com may automatically qualify for whatever system is ultimately proposed.

2.  American Airlines’ elites may be required to go to the US Airways website and enter their American Airlines frequent flier number into their record there (or some semblance of this).

Here’s why it matters.  American Airlines and US Airways isn’t doing a very good job matching pricing.  I’ve seen this at least a dozen times since they started to increase the size of the codeshare relationship.  But, here’s one recent example:

This is for an upcoming trip I was researching.  The flights on top are all operated by US Airways.  The flights on the bottom are the American Airlines codeshare.  Up until now, I really haven’t cared that much.  It’s annoying the American Airlines prices are higher because I don’t love the US Airways website for booking.  And, the American iPhone app is great for boarding passes and such.  US Airways, well, they have an app.  Useful?  Not so much.

Depending on how they implement upgrades, these pricing irregularities may cause some issues.  I can also imagine customers finding out after the fact that they booked a more expensive seat on the American codeshare when a cheaper one was available on the US Airways flight #.  It’s easy to say the customer could have done more research and found the cheaper flight.  But if the customer is already irritated at you, explaining it may have been partially their fault probably doesn’t win any points.

At any rate, I’m glad to hear something that looks like reciprocal upgrades is coming.  It makes me think it’s more likely we’ll have combined qualifying miles to determine elite status in 2015 since the timeline seems to be moving a bit faster than I anticipated.  I’m still probably a slight favorite to suffer under the new combined upgrade policy, but that’s nothing new.

How do you feel about the progress American Airlines and US Airways are making?

Which upgrade procedure do you want them to keep?