In the age where airlines are always trying to get one more dollar from your flight booking, there is a lesser-known source of revenue. Many carriers allow their passengers to bid for an upgrade for less than the cost of booking the next travel class.

While some airlines operate a bidding system, others will attempt to sell fixed-price upgrades. An excellent example is the London to Los Angeles flight with British Airways. In January 2017, I was flying this route and was offered the option of upgrading from economy to premium economy for £240 when I checked in. I didn't take it at the time and flew in economy. However, this would've been a bargain with premium economy selling for up to £2,600.

How to bid for an upgrade?

Airlines usually set different rules on times and limits for bidding for upgrades, but the concept is pretty much the same across the industry. You will receive an email from the airline a week or a few days before the traveling date asking if you would like to bid for an upgrade. This is usually from economy to premium economy or business class.

Photo: Singapore Airlines

If you are not invited, it's usually available by visiting the carrier's bidding platform. Airlines then set a minimum bidding price and sometimes a suggested bid. If two or more people travel together on the same booking, the price doubles or triples depending on the number of passengers.

After making an offer, you can pay with a credit card and will only be charged if the offer is accepted. You will be notified about 24 hours before departure if your bid is successful. If there is no communication from the airline, and you aren't missing a few dollars in your account, then chances are your bid was unsuccessful.

Why offer upgrades?

There can be a range of reasons why an airline would offer upgrades. Firstly, flights are occasionally overbooked, and if seats are available in premium or business, it is customary for airlines to upgrade a few people. Traditionally, they had to bear this cost, but if the airline offers a few passengers the chance to upgrade at a small fee, they move people around while making some amount of money.

Secondly, airlines may have several unsold seats, and instead of flying them empty, they offer them to economy passengers. I recently flew on Ethiopian Airlines business class from ADD with just one couple in the cabin, which I assume was not very good for the airline.

Photo: Tatenda Karuwa | Simple Flying
 

However, ET is one carrier that offers its customers a chance to upgrade to Cloud Nine (business class). With one-way tickets between Addis Ababa and Johannesburg going for $2,000 or more, you could get a terrific bargain by bidding for an upgrade.

South African Airways offers a similar experience with its Step-Up Cabin Upgrade platform. The success of your offer will depend on the amount you are willing to pay for an upgrade, competition, the original amount you paid for your economy ticket, your frequent flyer status, and the number of seats available for upgrade.

Bidding wars

If you choose to upgrade your ticket, your airline will probably ask you to act fast, as other people can do the same. The process is democratic, as the same conditions apply to all passengers. The best way to guarantee a spot in the premium cabin, of course, is to purchase the full ticket.

Photo: British Airways

When offering these upgrades, airlines must be careful with factors such as how many they allow. In the case of BA, upgrades are offered to passengers who haven't booked business, perhaps to give them a taste of a higher cabin, so they return for more or as a treat for customer loyalty.

The important thing is that they don't want to lose passengers from a higher tier. If passengers could rely on the upgrade system, then there is a chance that they would stop paying for the higher class and try their luck. This would mean that the airline would lose money from upgrades rather than making more.

Have you ever had a successful bid and upgraded to a higher cabin? Please share your experience with us in the comments!