In the last decade, we've seen first-class monetization in America improve over the years. First class was a prohibitively expensive option back in those days. Many seats would not be sold but instead go to those upgrading. As airlines decrease the price gap between economy and first-class, the percentage of first-class seats that are actually paid for is on the rise.
This post will share my thoughts on whether first class is worth the extra cost. How much am I willing and able to pay to upgrade to first class?
What are the advantages of flying first class?
It is probably worthwhile to share some background information so that we all get on the same page. This is not a post about Emirates A380 domestic first class with showers.
Although there are still some variations, you can generally expect that domestic first-class tickets include the following:
A wider seat will have more legroom and be more comfortable.
There is no alcohol and, depending on how long the flight, there will be something to eat.
Priority check in, priority security, priority board and priority deplaning
Checked bags free
If you are looking to achieve elite status, more miles will be earned
Domestic first class tickets do not include access to the lounge. However, there are some exceptions such as paid first class tickets for Alaska or transcon routes on American.
Do not get too excited about the first-class food you can find in your own country.
You should be aware that some airlines fly wide-bodied aircraft with flat beds on domestic routes. It could be worth paying extra or going all out to get these flights.
A fully flat bed with direct aisle access is the best.
Americans 777 Business Class
It is a lot more comfortable than the standard domestic first-class seat.
Americans 737 first class
How much do I value first class?
For me, first class is more valuable than economy at $50 an hour. If you look at it distance-based, that's roughly 500 miles. Although there are many variables, this seems to be a reasonable number and a good starting point for crunching the numbers.
First class is valuable for two reasons: productivity and comfort. High speed Wi-Fi is becoming more common on flights so I am able to be as productive on the plane as on the ground. Domestic first class is not something to be excited about. However, it can double as an office and a place to work.
First class has more space than the second.
Would I be able to work in the economy if necessary? Yes. It is uncomfortable. Im getting old(er). Bones I didn't know existed are starting to hurt. I wish I could avoid this.
These seats make it harder to do work.
Domestic first class for me is all about the space. While some might enjoy the food and drinks, I don't really care about getting drunk. (Unless, of course, I fly Emirates first class in which case it is a good enough occasion).
How can I decide whether or not to pay first class?
American Airlines is the airline that I fly the most, given that I am from Miami. I also have Executive Platinum status in AAdvantage. This status allows me unlimited domestic upgrades. However, that is subject to availability. Sometimes these upgrades are easy to obtain, and sometimes they don't.
How can I decide whether to pay first class or if I want to upgrade?
First, I look at the chances of my upgrade clearing.
What percentage of first-class seats are still available for purchase at the time you book? It is unlikely that any upgrades will be granted if first class is booked well in advance.
What is the market's competitiveness for upgrades? A Dallas to Los Angeles upgrade is generally more competitive than an Austin-to-Tampa upgrade.
What percentage of economy or exit row seats have been occupied? This can be a good indicator of the number of elites on the flight since they can usually assign these seats ahead of time.
Then, I often apply a discount on the fare difference. Imagine that I am looking at an American Airlines flight and there is $200 difference in the fare between first and economy class.
I am an Executive Platinum member and earn 11x AAdvantage points per dollar spent. I value these miles at 1.5 cents per mile; that's an incremental 16.5% return.
Paying with my Amex Platinum Platinum card earns me 5x Membership Rewards points for every dollar I spend. I value these at 1.7c each. That's an 8.5% incremental return on spending
I get a 25% return on my investment due to these two factors. This reduces my out-of-pocket expenses from $200 to $150.
These considerations aside, I take each case into account when making decisions. If I believe I can get an upgrade clearance of 50%, and I value first-class at $50 per hour, then I might pay $25 more per hour to fly first class.
When deciding whether or not to pay first class, I consider many factors
Here are some examples of how to choose between fares
Delta's first class pricing is the best, at least according to my willingness and ability to pay. My math shows that Delta's first class pricing is almost always right at the breakeven point.
Silver Medallion status is my Delta status, which means that upgrades are not always easy. For example, a Tampa-to-Boston Delta flight costs $144 in economy class and $344 in first class.
Would I be willing to pay $200 more to sit in first class for three hours? This is likely, especially considering that this cost me less than $170 after taking into account the incremental miles I would be earning. This is around $50 an hour. As a Silver Medallion, it can be even more difficult to get a comfortable Comfort+ seat without spending extra.
It is often difficult to justify spending first class when you book in advance, as we often see extremely low economy fares. Take for example a Tampa-to-Chicago flight where economy tickets cost $49 and first class is $331.
Block time for the flight is just under 3 hours. The price difference is $280. My odds of getting an upgrade cleared at more than 50% so I wouldn't pay for first class.
It is more difficult to fly from Fort Lauderdale to Los Cabos. Economy costs $220 and first class $399. This is a difference of $180. When you add in the 25% return on miles earned, it comes down to $135. This seems like a fair premium to pay for first class for over six hours, even though there is a chance an upgrade could be granted.
This is how I approach these situations. Based on my particular circumstances for others, I believe it's worth considering whether or not you have status in general and what value it brings you. Some elite statuses may already grant you complimentary checked bags, extra legroom economy seating and priority boarding. In these cases, the incremental value of first-class is reduced.
If you don't have status and you know you will be carrying two bags, you can subtract that cost from the price difference. It is also possible to factor in the cost of extra legroom economy seats or priority boarding.
Bottom line
Every person values first class differently so there is no standard formula to determine how much premium it's worth, given the many variables.
First class is worth more than economy. This is largely because it allows me to work productively while in first class. This doesn't include things like being comfortable, receiving a meal and complimentary drinks, or earning elite bonus qualifying miles.
In deciding which flight to book, I consider my upgrade opportunities and the miles I earn for the difference in fare. I see that as a discount.
In what situations would you consider paying first class?
