As FCF first announced in a June 18 Alert—and has kept you up-to-date for the past month—2013 Holiday fares have arrived: First Class starts at an eye-dropping $2,411 round-trip and Business Class starts at $1,608, both extremely good prices. Okay, great. Yet, to me, what comes to mind is:

• Which is the better deal, Business or First Class?

• How do 2013 Holiday fares compare to last year (what’s the trend)?

• Which airlines have lie-flat Business Class seats?

• What’s the good news?

• Is there any bad news?

2013 Holiday Fares Under the Microscope

THE BEST DEAL…

First Class fares during Thanksgiving on United: Starting as low as $2,411 round-trip. See chart on page 4 for more sample fares and pay close attention to the travel restrictions below.

Thanksgiving restrictions: Booking availability code A; departure window: Nov. 24 to Nov. 29; return window: Nov. 29 to Dec. 4;

The True Net Cost of First Class to Europe – $1,734: First Class fares are, in fact, even lower when you consider the “mileage earning benefit off-set value”: While United charges $2,411 New York-Brussels, the 18,334 miles earned (even without elite status) have a value of about $677, the cost of buying them from United (e.g. something I recommend considering) and will give you a free domestic one-way upgrade, for perspective. Subtracting the value of the miles earned from the fare yields a net cash cost of a mere $1,734, a savings of 75% versus United’s everyday discounted First Class of $6,804.

Thanksgiving Travel Savings: Sample R/T First Class Fares on United Save Up to 75% *

* Fares include average taxes and fees for the routes shown in the chart.

You can’t even fly to Hawaii from Los Angeles in First Class on United for that amount, and even if you could, you’d be getting a domestic, not an international, First Class seat. Plus, international First also gets you access to United’s Global First Class lounges—something Business Class does not—at O’Hare, JFK, LAX, San Francisco, and Washington, DC.

Top Elites: If you’re a United 1K, you also earn a 100% Premier bonus, 7,334 award miles more ($263 value), which reduces the First Class ticket net cost to $1,471. (All United members also earn about 11,000 Elite Qualifying Miles.)

A LOOK BACK: HOW NEW HOLIDAY FARES COMPARE WITH LAST YEAR

Fares in 2013 are about the same on many airlines. But this year the fares came out a month earlier, an indication that airlines would still rather sell Premium Class cheaply instead of offering mileage award seats because they know that the holiday season is soft for premium travel and prefer cash. They generate more revenue when they play their cards perfectly.

This Year’s Unique, Early Announcement Benefit: You don’t have to wait as long to pull the trigger. See the ball, hit the ball.

Fare matching for First Class: Only United currently offers Holiday First Class fares; other Star Alliance partners (Lufthansa and SWISS) and American have not yet matched.

If you can wait (and do not mind the gamble) you could find that American and other Star Alliance airlines might join United in offering Holiday First Class fares (as they have done in past years). I predict (and I’m right probably less than 70% of the time) that as Thanksgiving and Christmas travel dates come closer, other airlines will match (or come close to matching) United’s First Class fares on some routes in an effort to sell unsold First Class seats.

The upside to the risk is that you could have more routing and airline options, but on the other hand, fares could increase or sell out on United. See chart below for more First Class holiday fares on United.

FCF Recommendation: When you find a fare that is close to your budget, grab it. Pay the consequences of changing later. Know the cost of change. (See FCF November 2012 for more on Change-Fee-Think.)

Christmas/New Year’s restrictions: Booking code A; departure window: Dec. 16 to Jan. 3, 2014; return window: Dec. 25 to Jan. 7; 2014; minimum stay: 3 days; maximum stay: 10 days.

Christmas Travel Savings: Sample R/T First Class Fares on United Save Up to 62% *

* Fares include average taxes and fees for the routes shown in the chart.

MORE ON THE BACKSTORY

Fare matching for Business Class: Within hours of United and other Star Alliance airlines releasing their Holiday Business Class fares, Delta and other SkyTeam airlines matched. American, however, did not; its fares are $300+ more. In an attempt to push 2013 holiday fares up, Delta then jumped ship and matched AA’s higher fares. This means that 2013 holiday fares are unstable; so if you see a deal you like, jump on it. Don’t get too ambitious because you know the cost of that if you’ve followed FCF’s Intelligence for very long.

Get something great and forget about it!
See charts below and page 6 for sample holiday Business Class fares.

Thanksgiving Travel: Sample R/T Business Class Fares Starting at $1,608 *

Fares include average taxes and fees for the routes shown in the chart. Fares are based on using Star Alliance: Air Canada, Austrian, Brussels, Lufthansa, SWISS, and United. * Valid also for Virgin Atlantic. *** Valid also for US Airways.
Restrictions: Booking code P for Austrian, Brussels, Lufthansa, SWISS, and United; booking code Z for Air Canada and US Airways; travel season: Depart, Nov. 24 to Nov. 29; return, Nov. 29 to Dec. 4; minimum stay: 3 days.

Christmas Travel: Sample R/T Business Class Fares Starting at $1,883*

Fares include average taxes and fees for the routes shown in the chart. Fares are based on using Star Alliance: Air Canada, Austrian, Brussels, Lufthansa, SWISS, and United. * Valid also for Air France, Alitalia, American, Delta, Iberia, KLM.
Restrictions: Booking code P for Austrian, Brussels, Lufthansa, SWISS, and United; booking code Z for Air Canada, Air France, Delta, KLM, and US Airways; booking code I for Alitalia, American, and Iberia; travel season: Depart Dec. 16 to Jan. 3, 2014; return Dec. 25 to Jan. 7, 2014; minimum stay: 3 days; maximum stay: 10 days.

Very Interesting: US Airways, American’s merger partner, decided to match Star Alliance’s lower holiday fares on most routes rather than AA’s. Goes to show how long change can take!

THE GOOD NEWS

More new lie-flat Business Class seats to Europe: United now offers new ones on all international routes; Delta has them on 70% of its fleet now and completion is slated for year end; US Airways has all A330’s re-fitted; while American and Lufthansa just started rolling out their new seats on U.S. routes this year. See chart on page 7 for up-to-date status on Business Class seats to Europe for airlines offering Holiday Business Class fares.

Best Case Scenario:
(When Your Route Doesn’t Offer a Low, First Class Fare) Upgrade to First Class from Business, Plan B American and United allow upgrading from their lowest Business Class fares (with miles and a co-pay).

JUST IN!

American, Iberia, and SkyTeam airlines (Air France, Alitalia, Delta, and KLM) have matched United and other Star Alliance airlines lower holiday Business Class fares on many routes. Look for more information in upcoming alerts in our newsroom.

Upgrading to First on United:
Even though it does have Holiday First Class fares on many routes, you might come across a few routes that do not, in which case consider buying the Holiday Business Class fare and using miles for an upgrade to First Class!

Upgrading to First on American:
If you can wait, you might find that American comes out with a better First Class holiday fare on your particular route. If waiting isn’t your game, buy AA’s Holiday Business Class fare and use miles for an upgrade to First Class.

It’s not about getting the best fare in the world, it’s about getting a very good fare, and getting it over with.

If you have Amex Rewards and/or Starwood points, then consider transferring the points to Asia Miles (Cathay Pacific’s mileage program), an AA partner, and using the points to upgrade on American. This way you avoid AA’s $1,100 co-pay, but you pay more (10,000 to 35,000) in miles.

2013 Premium Fare Trends:
More International Airlines Involved
Virgin Atlantic, in former years was usually a hold-out till the end, due to its lesser capacity, matched United’s Business Class fares shortly after they came out (see June 23 alert).

More Destinations:
Holiday fares are offered to almost all destinations in Europe including Athens, Istanbul, Nice, Palermo, St. Petersburg, and Sofia. Huge Sea Change. People who understand and work this are the biggest winners of 2013, I believe!

More U.S. Gateways:
Even smaller airports such as Boise, Eugene, Ft. Myers, Great Falls, Hartford, and Monterey offer special Holiday Business and First Class fares.

FARE WARNING

Fares Could Increase: Oneworld and SkyTeam are trying to push up 2013 holiday fares. It will be interesting to see how this plays out. Will Star Alliance airlines (and Virgin Atlantic) stand their ground or will they give in?

Hold outs: British Airways and Scandinavian. I predict they will come along by September or October.

Business Class Seat Profiles for Airlines Offering Great Holiday Fares

¹ Not available on three B767’s. ² Higher number indicates seat-width when reclined, armrests folded. ³ Service on Los Angeles-London, lie-flat-width at shoulders. ⁴ The 777-300ER is currently servicing London/Heathrow-Dallas/Fort Worth and New York-JFK (Los Angeles starts on June 12, 2014). ⁵ B767-400 and B777 completed upgrade; B747-400 completed, too; full-flat bed installation is scheduled to be completed by the end of this year. ⁶ In the process of retrofit, aircraft slated for completion at the end of 2014; NYC-Madrid will have new seat November 2013. ⁷ Seat-width in a lie-flat position: room at shoulder height; B747-800 service on the Washington, DC, Los Angeles, and Miami-Frankfurt routes, and A330-300 Washington, DC, New York, and Montreal-Munich routes. ⁸ Seat-width at shoulder height. ⁹ Flat-beds installation on all A330-200 and A330-300 aircraft are now completed. * All data in chart according to the airlines PR Departments.