The best way to upgrade

Given the cattle-car seating and lousy service in coach/economy airline cabins these days, lots of travelers are interested in upgrading to business or first class. But figuring out how to do it isn’t always easy.

One reader recently asked, “I heard it’s better to buy a coach ticket and upgrade to business with frequent flyer miles. Is this true?” As with so many of these questions, the answer is more complicated than the question. However, if you limit the question to upgrade options with frequent flyer miles, the answer depends on the value you place on your frequent flyer miles—as well as the airline and the trip.

The value of miles

When I first started writing about frequent flyer programs, most people—myself included—valued frequent flyer credit at somewhere around two cents a mile. Then, you could easily compute a value of two cents—or even higher—by comparing the cost of a purchased ticket with the number of miles you need to get that same ticket. Now, however, there’s a big difference, and most of us peg the value at closer to one cent a mile. That’s because frequent flyer seats have become too hard to get to sustain a high value.

In those two-cent days, buying a cheap ticket and using miles to upgrade it was always the better choice. But, beyond seat scarcity, two recent factors have shifted the balance even further:

• The big airlines now restrict the coach/economy fares eligible for upgrades to some of their higher levels.
• In addition, American and Continental add a surcharge for upgrading lower-level fares.

Now, therefore, you’re usually better off with a “free” ticket, using nothing but mileage, and only occasionally with the upgrade.

Sample trips

The best way to illustrate my conclusion is through some sample trips. I chose midweek round-trips for mid-February 2007, with credit valued at one cent a mile. For reference, I also list the least expensive coach/economy fare—a fare that is not eligible for upgrades.

Test 1: Northwest Airlines, Detroit to Amsterdam

Here are the relevant figures:

• “Free” business-class ticket: 100,000 miles, worth $1,000
• Round-trip upgrade 60,000 miles, worth $600
• Minimum fare qualifying for upgrade: $1,186
• (Regular minimum economy fare: $506)

Upgrading the cheapest qualifying ticket costs $1,186 for the ticket plus $600 worth of miles, or $1786, total. An all-mileage ticket costs $1,000.

Test 2: Northwest Airlines, Detroit to Los Angeles

• “Free” first-class ticket 45,000 miles, worth $450
• Upgrade 30,000 miles, worth $300
• Minimum fare qualifying for upgrade: $389
• (Regular minimum economy fare: $292)

The total cost of the ticket plus upgrade is $689; the cost of the all-mileage ticket is $450.

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Test 3: United Airlines, Washington, D.C., to London

• “Free” business-class ticket 80,000 miles, worth $800
• Upgrade 60,000 miles, worth $600
• Minimum fare qualifying for upgrade: $713
• (Regular minimum economy fare: $452)

The total cost of the paid ticket plus upgrade is $1,313; the cost of the all-mileage ticket is $800.

Test 4: United Airlines, Washington, D.C, to Los Angeles

• “Free” first-class ticket 45,000 miles, worth $450
• Upgrade 30,000 miles, worth $300
• Minimum fare qualifying for upgrade: $709
• (Regular minimum economy fare: $399)

The total cost of the paid ticket plus upgrade is $1,009; the cost of the all-mileage ticket is $450.

If you value your credit at two cents a mile, the difference narrows but still favors the all-mileage ticket:

• Trip 1: Upgrade plus paid ticket, $2,386; all-mileage ticket, $2,000
• Trip 2: Upgrade plus paid ticket, $989; all-mileage ticket, $900
• Trip 3: Upgrade plus paid ticket, $1,913; all-mileage ticket, $1,600
• Trip 4: Upgrade plus paid ticket, $1,309; all-mileage ticket, $900

Only if you put a significantly higher value on each mile does the upgrade approach come out ahead.

Clearly, in all my tests, the “free” seat approach beat using miles for upgrades. I suspect I’d find the same result with the other “legacy” airlines—maybe an even bigger edge to Europe on American and Continental, which require you to pony up as much as $450 in addition to a higher base fare to use a mileage upgrade.

However, if you’re a really high-level frequent flyer in your airline’s program, you might find some cases where a lower coach/economy fare qualifies you for an upgrade. My guess is that anyone who qualifies is already very well aware of the specifics.

How to do it

A final consideration—one that I can’t evaluate—is whether either approach gives you a better shot a seat, and if so, which one. I’ve never seen anything about relative seat allocations, and the airlines aren’t talking.

In my experience, either approach beats buying a ticket in business or first class. And the real question, then, is not the relative cost, but instead is whether you can find the seat(s) you need either way. That’s why I suggest checking out both options:

• First, see if you can find all-mileage seats; if you can, that’s your best deal.
• If you can’t, check to see if you have any better luck buying a ticket and upgrading it.

Either way, you’ll do better than buying a premium ticket.