The Upgrade Trap
Imagine this…you’re checking in for you flight and see an upgrade offer for $199 to go from economy to business. Do you take it?
You’re probably thinking that it would depend on a variety of factors, but part of you might say yes because flying at the front of the plane is an amazing feeling. You think of the early boarding, free drinks, better food and maybe even a seat that lies flat.
You remember when you were first booking, the business class seat cost $1,200…absolutely not! But often times, that comparison can be very misleading.
Thinking back to the $199 upgrade offer, the question isn't how much you're saving…
The real question is how much value you're receiving.
Why Airlines Discount Upgrades
Most premium seats are priced for business travelers. As departure approaches, airlines may sell empty premium seats at steep discounts rather than let them fly empty.
This creates upgrade offers that appear attractive even when the value is questionable. And when this happens, travelers need to understand the rational value as to what the experience would be when deciding to upgrade or not.
A Better Framework: Cost Per Hour
Here at The Fare Theory, we take a very practical and rational analysis of determining whether a flight, upgrade, etc. would actually be worth it on a specific flight. So instead of asking whether an upgrade is cheap, calculate the cost per hour of additional comfort. Check out these two examples below:
Example 1
EWR–MIA
Flight Time: 3 hours
Upgrade Cost: $150
Cost Per Hour: $50
Would you pay $50 per hour for a larger seat, free drinks, and earlier boarding? Maybe.
Example 2
EWR–LAX
Flight Time: 6 hours
Upgrade Cost: $150
Cost Per Hour: $25
Same price, double the value.
From a pure monetary perspective, this is more of a “standardized” practice in terms of evaluating a “cost per hour” upgrade. Transparently, within the United States and domestic flights, the rational value is easier to analyze since many carriers typically operate in the same fashion and type of aircraft.
But where it then starts to deviate from this method is when there are many different factors, such as aircraft type, aircraft age, meal service and even carrier (when traveling internationally).
When Upgrades Usually Make Sense and Don’t Make Sense
From a very generalized perceptive, The Fare Theory believes upgrading make sense in the following scenarios:
Red-eye flights
Flights longer than 5 hours
International premium economy to business offers
Situations where sleep matters
Trips where productivity matters
On the other hand, we feel strongly about when upgrades don’t make sense:
Flights under 2 hours
Leisure trips where arrival time isn't critical
Upgrades purchased solely because they're discounted
Upgrades that cost more than the hotel room at your destination
At the end of the day, the idea is to maximize the rational value that you receive from your plane ticket as airline pricing can often times be confusing and difficult to understand.
The Fare Theory
Airlines want travelers to compare upgrades against the full retail price of premium cabins. Smart travelers compare upgrades against the value they actually receive.
The best upgrade isn't the cheapest one.
It's the one that delivers the highest value per dollar.