Though first-class travelers can still take advantage of early boarding, more legroom and free drinks, airlines are re-thinking whether passengers are willing to pay vastly inflated prices for diminishing perks.
With a huge price disparity between coach and business or first class, passengers can expect to pay up to four times the normal economy fare for business, and eleven times for first class, according to consumer resource site The Credit Blog. “Airlines make big money from consumers who elect to fly first class,” the site adds.
But as the cost of first-class tickets continues to rise, a growing number of passengers are electing to pass on the gourmet nuts and free glass of wine. Their more likely choice, surveys say, is to fly the far more affordable, no-frills at all (maybe a soft drink and a small bag of peanuts or chips) coach.
This is happening for very good reasons. One of them is the generally lagging economy, which impacts the airline’s most lucrative passengers, business travelers, as well as leisure visitors worried about their spending.
“When times get tough, consumers cut the luxuries first,” says The Credit Blog. "First-class airline tickets are in the same category (as cable TV). It’s a lot nicer to fly first-class. But it’s certainly not a necessary expense.”
Dwindling Demand Sees Airlines Looking At Alternatives
The result is that the airlines are re-thinking first class. “Today, when airlines offer more economy seating and more cut-rate fares, some customers and industry watchers predict the end of first class travel,” writes Tom Antion in World-Explore.
First-class travel has not fared well in recent years with the demise of the Concorde, to cite one example. “There’s been a clear trend for long-haul international flights to reduce or eliminate first-class cabins in all but the most lucrative and competitive routes,” Bryan Saltzburg, general manager of TripAdvisor Flights, recently told The New York Times.
Airline consultant Vern Alg adds that first-class paying passengers are becoming so rare they are usually a “crown prince or movie star or somebody with a lot of money.”
Airlines have caught on to the trend, and some - such as Continental, Delta and Air Canada - have eliminated first class entirely, says TripAdvisor Flights. Their new concentration is on business class. Airline analysts also point out that it is expensive to carry a lot of first-class seats that do not get booked, while at the same time, business travelers often happily settle for business class prices.
What is next for airlines? There is talk they will start to fill a niche for travelers who want something less than first or business class but who are willing to pay a little more for, say, legroom or even a better meal.
“The marketplace is asking the question: ought there be something between business class and economy, such as premium economy?” said Calin Rovinescu, Air Canada’s Chief Executive. Some airlines such as Delta already have started offering more choices with “economy comfort.”
One recent amenity offered in the past few years has been lie-flat beds. But even the prospect of a better night’s sleep has not proven to be enough of an inducement to grow the first-class air travel market.
Key Statistics – Premium Air Travel
- Premium travel has now risen 17% above its 2009 low point but 99% of that rebound had occurred by the end of the first quarter of this year. In the months since then the number of passengers travelling on premium seats has leveled off and “appears to have stopped improving,” according to the International Air Travel Association (IATA).
- Prior to the recession of 2008-09, premium travel made up to 10% of the international total air travel. But this declined in August to 7.5%. (source: IATA)
- The main source of the decline in premium travel in August was within the European and North Atlantic markets, which went from year-on-year growth of 5.6% in July to -1% in August and 6.4% to 4% respectively; premium travel on the Europe to Far East segment also slowed sharply from 13.5% in July to 7.5% in August. (source: IATA)