Buying Discount Business Class Fares vs. Upgradeable Economy

As I've written about lately, there have been a ton of super cheap business class airfares recently - even to Europe during peak season. Continental also usually runs a pre-summer sale on business class, so I expect more low fares (and subsequent matching by competitors) to appear in the next month or so.

These fares are so low, they are almost as cheap as coach. I almost feel sorry for the people who don't know any better and are booking coach for pennies less, rather than getting to enjoy full lie-flat seats (and tons of extra miles) on their flights.

I ran into another case of this situation when I was presenting options to a client for an upcoming trip to Israel. Israel awards are tough, because there are few gateways and those flights are in high demand - especially around Jewish holidays. I've read many reports that Tel Aviv routes are among the most profitable for the airlines - not surprising since it's a long trip and not many people want to connect in Europe and extend an already lengthy flight (plus the connection times on most carriers don't line up nicely and require day long layovers).

So when I started researching whether a client should upgrade or flat out buy a business class ticket, I was once again reminded that business class is sometimes only a tiny bit more than upgradeable coach fares - especially on Delta who restricts international upgrades to the highest fares (Y, B, and M).

Check out the difference for this itinerary:
Upgradeable coach fare on Delta= $3,256 plus 50,000 miles to upgrade roundtrip
Discount business class fare (I) = $3,347

So "splurging" an extra $91 saved my client 50,000 miles per ticket - a steal if you ask me and the reason why you should always check the price of business class when booking an upgradeable award or a coach ticket that seems really expensive.

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While this situation is extreme, there are some things you should know about discount business fares. They are usually only available 30-90+ days in advance. Also, they carry cancellation penalties, so they don't have the same flexibility as full-fare business class. However, most airlines will give you a voucher (less a cancellation fee), so it's not like you will lose the entire value of the ticket if you need to cancel.

I've also seen a lot of domestic US airlines closing the gap between traditional first and business class fares and discount coach prices. Continental has been marketing upgrades much more aggressively lately - whether at check-in or anytime before your flights, much to the chagrin of their frequent flyers who have noticed marked decreases in their complimentary upgrades. Delta has also announced a planned initiative to "monetize" first class, which could make the cabin more accessible than it's ever been in the past.

While I personally love my near unlimited complimentary domestic upgrades, I think it's smart of the airlines to have more sensible upgrade policies. For example, Delta restricts L,U,T fares (the most common, cheap fares) from upgrading at the gate when seats are still available. So even if you want to pay the $50-$150 fee - you aren't allowed since you bought a cheap ticket. Since most customers don't even realize what fare class they are buying, I think this policy makes no sense. In fact, it aggravates people because they see the "First class seats available for upgrade" and approach the gate agent with credit card in hand, only to be turned away because they didn't purchase a YBMHQ or K fare.

And while the airlines have been rebounding, with oil prices creeping up again, I bet they'll be more aggressive about capitalizing on new revenue sources. And as flyers are already mad about fees, giving them the opportunity to purchase up to first class while not breaking the bank, could be a mutually beneficial situation.
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