Iberia to introduce ‘bid for upgrades’ – BA to follow?

BA’s sister airline, Iberia, has announced its intention to operate an auction system for business class upgrades. Google Translate offers its own slightly dubious version of the announcement on the Iberia website:

Iberia allows customers offer price to buy upgradings to Business

In these departure and return dates holiday, Iberia offers its customers the opportunity to “buy” upgradings to Business offering price through the website of the company, whose acceptance depends on the availability and offers made. This is a new initiative of the company’s business plan aimed at capturing new revenue and improve the customer experience, both objectives of the Transformation Plan.

Now, once purchased the ticket in economy class, customers can enter your locator to “management reserves” iberia.com, and opt to fly on Business indicating the price they would be willing to pay a fee in minimum / maximum that the company proposes that varies depending on the type of flight for which application for upgrading. The request for upgrading can be performed from the time of ticket purchase, and customers can modify or cancel his offer up to five days before departure.

In the following days, the company will communicate if it has been accepted or not your offer, depending on the price and availability of the promotion on every flight. This new mode upgradings sale is available to all passengers on certain flights economy class, whether they have purchased their ticket in iberia.com or Serviberia, as if you bought in travel agency. The advantages of buying these upgradings are, above all, the ability to fly in Business Class at a very advantageous, and benefit from all the services offered on board Iberia also differentiated billing at airports, VIP lounge access, the use of fast track security desks and priority baggage delivery at the destination airport.

This is not a new business model for the hospitality industry, although it is one that I don’t come across often. I think the Hilton in Stockholm was the last place to email me in advance of my stay offering me a chance to make a binding bid for a better upgrade.

Outside the UK, this system is already widely used. If you look at the website for OptionTown, which runs most of these systems, you will see that they have Adria, KLM, AeroMexico, Vietnam Airlines, Cyprus Airways, SAS, airBaltic, Air India and Corsair as partners. Air New Zealand also offers it, and Virgin Atlantic ran a trial on a few routes – albeit with no signs of a major roll out.

Now, there is always the possibility that whatever turns up at Iberia will eventually turn up at British Airways. That said, this seems unlikely for now.

BA already has a ‘buy an upgrade’ option through ‘Manage My Booking’, where you can be offered a cheap(-ish) one class upgrade. This is not an auction, this is a ‘buy it now’ offering which also gets you tier points and additional Avios points for the upgraded class. This is less tacky than the auction route, whilst still allowing the company to increase revenue.

For long-haul flights, World Traveller Plus also presents a (literal) barrier. With only a modest number of World Traveller Plus seats, BA does not have much spare capacity to auction off to World Traveller passengers. And with so few World Traveller Plus seats, it would not be very cost effective organising an auction for upgrades to Club World – they would be lucky to receive one bid on most flights. Iberia does not have this problem, as you would be upgrading directly from Economy to Business.

So, in the short term, I don’t see this coming to British Airways. If you want a cheap upgrade on a cash ticket, I recommend keeping a close eye on ‘Manage My Booking’ instead for the chance to buy one.

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