The Latest Airline Up-Sell: Direct Flights

The Latest Airline Up-Sell: Direct FlightsBy Kelli B. Grant, SmartMoney

The next time you book a connecting flight, keep your cellphone at hand with the ringer as loud as it'll go - you could get a call for a cheap up-sell on a direct fare.

American Airlines (AMR) called travel writer John Discala, aka Johnny Jet, within hours of his booking of a $160 one-way Los Angeles to Toronto flight, with a stopover in Dallas. Discala usually flies direct, but picked the connecting flight because it was $200 cheaper and added just three hours of travel time. "If it saves me $200, I don't mind spending a few extra hours in Dallas," he says.

But American wanted to know, did Discala want to upgrade to the direct flight, for an extra $49?

Discala says he was home sick at the time and, not thinking clearly, declined the offer. "I should have taken it," he says. "I've never heard of airlines doing anything like this, and I fly all the time."

"I didn't know we do that," was the initial response from American Airlines spokesman Ed Martell. After asking around, he came back to Pay Dirt with details of the program, internally known as "Project Direct," which has been quietly operating for four years. Here's how it works:

Revenue managers identify individual flights that are heavily booked, and look to see if there are passengers making a connection that might be moved to a direct flight. Although direct flights are typically more in demand, from a business perspective it makes sense to offer that upgrade for a small fee, variable by flight, if it frees more valuable seats, Martell says. (Looking at available fares on Expedia.com, in Jet's case, an upgrade might have allowed American to turn his one-way $160 ticket into $239 for the Los Angeles-Dallas segment, and another $307 for the Dallas-Toronto leg.)

Rick Seaney, the chief executive of Fare Compare.com, says it's more common as airlines trim schedules for consumers who booked direct to find themselves rescheduled onto connecting flights. But American's upgrade program -- and its secrecy -- makes sense in the competitive airline market, where connecting flights are often priced within a dollar or two of other carriers on the same route to appeal to cost-conscious travelers.

Martell cautioned against booking the cheaper connecting flight in anticipation of a call. Complex formulas have resulted in very few upgrade offers being made (hence Project Direct's under-the-radar status), and those that are extended are first-come, first serve. Discala, an elite frequent flier, would have been at the top of the list. "If all the planets align just right, you might get a call," Martell says. "[Discala] missed a rare opportunity."

Nickels and Dimes will keep tabs on new and rising fees and surcharges eating into your bottom line. Have one to share? Email kelli.grant@dowjones.com.


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