A little of both, I think. For most carriers it is a policy to limit ZED travel to economy class, unless you hold a business class ZED ticket on that carrier. However, some agents will go against policy and give a seat in the premium cabin if they can, however, there are likely to be negative consequences for doing so. On AA, for example, the Economy ZED fare is often less than our own employee service charge for First or Business, so if an AA agent gives a ZED customer a premium seat, he's negatively impacting AA employees who could not be upgraded without paying more than the OAL employee. Since most airline employees are emotionally attached to their travel privileges they will raise all sorts of issues if they notice the improper upgrade. It's just not worth it for the agents.
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