Reader Jered asked,
Why don’t airlines open all remaining international premium cabin seats for awards for day-of travel? Surely getting something for them is better than having them go empty?
Here’s Jered’s question — if a seat is going to go empty, an airline is getting literally nothing in exchange for that seat. They get something, whether reduction in liability (and thus recognition in revenue) for their frequent flyer program and a transfer of funds from the program to the airline… or cash for the seat from an airline partner.
So why would an airline let a seat take off empty, rather than reaping an incremental revenue gain for it?
Now, many airlines do follow this strategy. They make seats they expect to go unsold available as awards. Some seats may be opened early on when an airline’s schedule loads, but nearly a year out there’s limited data to go on so it’s only as travel approaches that they know which seats will go empty and release those seats as saver awards. Indeed, as the day or two before travel approaches they might open up all or most of the unsold seats for folks using points.
There are essentially two reasons not to do this:
- Preserve the exclusivity of the product. The belief here is that there’s value for the paying passengers in having a lightly booked cabin, and that a cabin you have to pay for is more special, harder to get, and worth paying for. Something you can get cheaply and easily on points could be harder to justify paying for, at least for some passengers at the margin.
- Prevent passengers from redeeming points instead of spending cash. Some passengers might buy the seat, but choose to use miles is mileage seats are available. Indeed the highest revenue customers are those buying last minute tickets. Why give them a points option when they’re stuck needing to spend cash?
In both cases the idea is that in giving up incremental revenue for the award seat, the airline might be protecting revenue (because a customer spends cash instead of miles) and protecting the long-term revenue-stream (By keeping the cabin exclusive).
That’s the argument anyway. That said, many airlines do fill the cabin. The question is how: award seats, upgrades, or employees. And upgrades may be ‘supported’ upgrades (with miles, or upgrade instruments) or ‘operational’ upgrades (a lower cabin is oversold so some passengers get upgraded in order to have the flight go out full and on time).
Each airline’s approach is different, though North American carriers tend to fill their forward cabins while practice varies more in other regions of the world.
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