The Rise of Seat Upgrade Auctions on International Flights Unlocks Premium Travel

Airline travel can be a contentious experience, with passengers often clashing over reclining seats, seat switches, and overhead bin space. However, a more civilized approach to securing better seats has emerged on international flights: seat upgrade auctions.

On multiple occasions during the past few months, I was offered the chance to secure premium economy seats at a 50% discount compared to their original booking prices, a few days before departure. This article aims to demystify the workings of this innovative seat upgrade auction system, its worldwide prevalence, and the reasons behind the cautious approach of major U.S. airlines.

A week before a flight, passengers receive an email offering the opportunity to bid for seat upgrades. Interested travelers provide their credit card details and enter their desired bid. If their bid is the highest, they are charged, and their seat is upgraded, often at a substantial discount compared to the original booking cost.

While international airlines have enthusiastically embraced seat upgrade auctions, major U.S. carriers have been more cautious. Currently, Spirit Airlines is the primary U.S. airline offering upgrades through its SeatBid program. The hesitation among major U.S. airlines is due to the potential conflict with existing upgrade practices.

Traditionally, U.S. airlines offer various methods for passengers to upgrade their flight experience, including redeeming miles, leveraging elite status perks, or purchasing upgrades like regular tickets. These methods have been integrated into the business model, and airlines want to ensure they don’t alienate loyal passengers who have accrued points and elite status perks for potential free upgrades.

The seat upgrade auction model is disruptive because it often provides steep discounts, particularly for distressed inventory—seats that would otherwise go unsold close to the flight date. This approach taps into the supply and demand economics, appealing to cost-conscious travelers.

While the U.S. airline industry may eventually adopt upgrade auctions, the change is unlikely to happen quickly. Airlines have relied on premium-cabin inventory for upgrades via miles, frequent flyer perks, or last-minute buy-ups. This practice is an attractive perk of frequent flyer programs, and abandoning it may lead loyal travelers to switch airlines.

The future of upgrade auctions is intertwined with the changing landscape of business travel. While international flights have seen the most demand for upgrades, there is a longer-term trend of declining business travel, which may not fully return to pre-Covid levels.

Airlines benefit from upgrade auctions as they generate additional revenue compared to offering free upgrades. Travelers who win these auctions enjoy substantial discounts, often exceeding 70% on premium seats. However, this could reduce perks for elite status passengers, who historically relied on free upgrades.

Seat upgrade auctions represent a significant trend in the airline industry, benefiting both airlines and passengers. As more airlines adopt this practice, the traditional method of offering free upgrades may evolve. While elite status perks may change, airlines are likely to introduce new loyalty rewards to maintain customer loyalty, ensuring a dynamic and competitive landscape in the travel industry.