Austrian Airlines allows customers holding an economy class ticket to bid on an upgrade to its longhaul business class. Business class award space on those same flights has dried up in the seven months the scheme has been in place.

Is that a coincidence or is this a possible scary future for us where airlines auction premium cabin seats at a discount instead of giving them to us with miles?

What is an Austrian Airlines Smart Upgrade? How is the award space in business class from the US to Europe on Austrian? Is selling discounted upgrades the future of business class cabins? And where does that leave folks with miles?

Austrian Airlines allows folks with an economy class ticket issued by Austrian Airlines to bid for an upgrade to business class up to 72 hours before the flight.

For more information, see the Smart Upgrade Frequently Asked Questions and Terms & Conditions.

The key term that would trip most of us up is that the ticket has to be issued by Austrian, meaning the first three digits of the ticket number are 257. If you booked an economy award on Austrian Airlines with United miles, you would not be able to use a Smart Upgrade because the ticket would be issued by United, meaning its ticket number started with 016. According to a FlyerTalk thread, awards booked with Miles & More miles are also ineligible for a Smart Upgrade.

Here is a FlyerTalk thread with info on some folks’ bid attempts and successes.

I used to find that award space on Austrian’s flights were a gold mine. That was great news because Austrian flies an almost fully flat business class product that is quite comfortable to New York, Chicago, and Washington DC. (I just flew it last week VIE-ORD. Trip report coming soon.)

But now that some business class seats are being sold as upgrades, space is very poor in business class with United miles.

Washington to Vienna

There are only 10 days in the next year with business class space–shaded blue or green–from Dulles to Vienna; two are in the next three days.

New York to Vienna

There are 16 days in the next 11 months with award space in business class from JFK to Vienna; again two in the next three days.

Chicago to Vienna

O’Hare to Vienna has the best award space with 22 days in the next 11 months having at least one business class award seat.

My three takeaways on the award space in Austrian Business Class from the US to Austria:

  1. Award space is awful, averaging fewer than two days per month on all routes.
  2. There is no business class award space after January 11, which is very strange since February and March are very low season to Europe.
  3. There is far greater award space within 72 hours of departure than further out.

I can’t explain point two, but points one and three make me wonder if Austrian is selling business class space as upgrades that it might otherwise release to folks with miles.

Presumably Austrian makes more cash selling an upgrade than its partners reimburse it for one of the partners’ customers booking an award ticket in Austrian business. All those upgrades are cleared 72 hours before departure, so at that point, Austrian makes no more money form upgrades and might as well release seats as award seats.

But all I can offer is my observation that award space has fallen since the introduction of the Smart Upgrade program and my conjecture about which is more revenue for Austrian, upgrades versus award seats. I can’t say for sure whether Austrian is replacing award space with upgrade auctions.

But even if Austrian isn’t, is this the wave of the future?

Part of me wants to say yes. Airlines want to sell all their seats, but especially their premium cabin seats with their massive mark ups. If they can’t sell them at full price, airlines want to at least get something for those seats. These auctions are a great source of revenue (as long as they aren’t just used by people who would have purchased business class seats to save money on the same seats.)

But if they are the wave of the future, why aren’t they the wave of the present?

I think the main reason to be optimistic that these auction won’t replace our access to premium seats is that they are fairly uncommon despite being technically feasible for all airlines.

Auction theory has been well understood for decades. The technology to handle an online auction like Austrian’s has been around for years.

And yet only a few airlines like Austrian, Etihad, Air New Zealand, and El Al use these auctions. That tells me that most airlines have concluded these auctions would lower their profitability.

Your Take

Are these auctions good or bad for us? Will they flop or will they spread? If you had an economy transatlantic flight on Austrian, how much would you bid for an upgrade to business class one way?

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