The challenge of obtaining a complimentary first-class upgrade has increased.

• Airlines have learned that travelers are willing to pay a premium for extra space at the front of the cabin.
• The number of frequent flyer members is increasing, resulting in more competition for upgrades when seats become available.
• Airlines are competing to provide first-class or larger international business classes with amenities such as lie-flat seats, larger entertainment systems, and private suites with closing doors.

Cheap seats aren't enough for airline passengers anymore.

Due to the pandemic, airlines have observed that travelers are willing to pay more to sit in the front of the cabin, which has resulted in many seats being occupied. As a result, it is becoming increasingly difficult for frequent flyers to obtain complimentary upgrades to the front of the aircraft.

The number of frequent flyers with elite status is increasing rapidly, from the airport lounge to the first boarding group, resulting in more competition for seats. During the year-end holiday season, airlines anticipate an even greater influx of passengers, which they predict will break another record.

Despite the off-season in early 2025, executives have predicted strong demand for U.S. airlines' capacity in the first quarter, which will be up about 1% from the previous year, according to aviation data firm Cirium.

President Glen Hauenstein stated at an investor day in November that our best unit revenues are likely on transatlantic routes, specifically during the winter months.

The cost difference between first class and coach tickets varies depending on factors such as distance, demand, time of year, and time of day. For instance, a round-trip ticket from Newark, New Jersey, to Los Angeles International Airport during the first week of February cost $347 in standard economy and $1,791 in the Polaris cabin, which includes lie-flat seats but not access to the international business-class lounge.

During Easter week 2025, a nonstop flight from New York to Paris cost $1,104 in coach and $3,038 in the airline's Flagship Business class.

Airlines' revenue is at stake, and managing their loyalty programs effectively is crucial to maintaining profitability.

American Airlines has announced that it will maintain its current requirements for earning status next year, which starts in March.

From giveaways to paying up

Last month, Hauenstein informed investors that the percentage of travelers paying for seats in Delta's domestic first class has increased from 12% to around 75%, with the trend continuing.

"In 2010 and earlier, Hauenstein revealed that first-class seats were given away based on a frequent flyer system. The goal was to spend as little as possible, fly as much as possible, and get upgraded as often as possible. This strategy resulted in our most valuable products being the biggest loss leaders."

In 2010, Delta generated 60% of its revenue from main cabin economy tickets, but now only 43% comes from that source.

The trend of adding more luxurious seating options is spreading throughout the industry, from Delta, the most profitable airline, to discount airlines such as Frontier, which is introducing roomier first-class seats to the front of its Airbus fleet in 2025. On Wednesday, Frontier announced that it would introduce two or three rows of domestic business class on planes that don't have its highest tier Mint business class with lie-flat seats, dubbing it "junior Mint."

Hawaiian Airlines, which was acquired earlier this year, announced that it would retrofit some of its planes with premium seats in preparation for new international flights. The revenue from higher-priced seats has been outpacing standard economy seats.

"According to Andrew Harrison, Alaska's commercial chief, the Airbus 330s and Boeing 787s are under-indexed in business class and do not have an international premium economy cabin. As a result, beyond 2027, Alaska expects its premium mix to continue growing."

Bigger business

Airlines are competing to include premium sections with larger screens and enclosed flatbed seats in their international business class.

"American Airlines' vice president of revenue management, Scott Chandler, stated that there has been a surge in paid demand for premium cabin since the pandemic, indicating that more individuals are seeking the premium cabin experience."

American has made it easier for customers to purchase pricier cabins over the past few years, with post-purchase options to upgrade to first class or other cabins like premium economy.

American is upgrading some of its long-range aircraft with premium seating options, similar to other carriers, by eliminating first class entirely on some planes and adding larger international business class cabins with new seats featuring sliding doors. Delta and United have also enhanced their premium offerings to remain competitive and meet the demands of customers seeking to pay for premium seats.

"Henry Harteveldt, founder of Atmosphere Research Group, stated that salespeople should do everything possible to encourage customers to purchase their premium products. According to Harteveldt, customers do not expect to receive a designer bag for free when purchasing a store-brand item at a department store."

In 2026, it plans to fly with several rows of extra-legroom seats, retrofitting its standard coach-only cabins that it has flown for more than half a century and doing away with open seating.

CEO Bob Jordan said it's partly a "generational shift."

He stated in an interview that our younger customers are looking for a more premium travel experience, which is a shift in mentality that allows them to spend more on travel and less on other things.

The airline opted to maintain the number of seats on its aircraft and not introduce a first class, following customer feedback and cost analysis.

Jordan stated that discussing ovens, meals, and provisioning is a significant capital investment and a significant leap for first class.

"But never say never," he said.