Is the premium economy trend finally catching on as Air Canada
becomes the latest airline to announce its introduction as “a new class
of travel”, starting with the Montreal-Paris non-stop route in July
2013. New, perhaps for the Canadian carrier, but not quite globally.
Eva Air of Taiwan was one of the first carriers to introduce the premium economy class, when it launched its operations in 1991. There was a limited number of seats, that boasted more legroom. Since then, a number of airlines have dabbled with the idea and more of them started to introduce an expanded “middle” class. This became almost a preogative during the global financial ciriss that took a toll on business and first class travel.
Many major airlines have started pushing the trend to catch downgraders and entice upgraders who are not quite ready to splash on frills. They include British Airways, Virgin Atlantic, Air France, United Airlines, American Airlines, Delta Air Lines, Cathay Pacific Airways, Japan Airlines, All Nippon Airways, Qantas and Air New Zealand.
There are noticeable exceptions. Singapore Airlines (SIA) introduced the class dubbed executive economy on non-stop flights between Singapore and Los Angeles but did away with it when it converted the flights to an all-business class configuration. The class was popular, but the prospect of higher yield in business ruled in its disfavour. After all, in good times SIA derived at least 40% of its revenue from its premium market. Since then the airline has insisted that it has no plans to revisit the concept anywhere in its network. Some analysts think it may be a mistake for SIA to not go with the flow as it continues to bank upon complete recovery of the business class traffic.
Noticeable too is the absence of premium economy on Emirates Airline,
which may have prided itself as providing an economy class that is as
good as any other airline’s premium economy. In the same way, one may
ask: Do you fly legacy economy or budget business class?
Indeed, it is not what makes the premium economy better than the normal economy but by how much. The early model was not that much visibly different, and that probably explained why it was slow in catching on. Today, airlines such as Cathay Pacific and Qantas are putting much more into this in-between class to give it an exclusivity of its own. It used to sell mainly on wider seats with more recline and legroom, but the perks have been expanded to include a string of priorities at check-in, boarding and baggage delivery on arrival, more generous checked baggage allowances, an apparently more refined meal service on board, a wider screen for in-flight entertainment (IFE) system, brand-name amenity kits and higher frequent flyer mileage points.
However, as the name suggests, premium economy is more an economy than a business class product and, in spite of the effort of Cathay Pacific and the like, it still lacks a character of its own. This could explain the lukewarm attitude towards the product of airlines such as SIA and Emirates, which probably prefer to focus their efforts on marketing a superior economy and at the same time be not detracted from the truly premium product of the upper classes. For the premium economy to sell, downgraders from business and upgraders from economy must be adequately tempted with visible advantages to make the trade-off vis-à-vis the cost, whether it is saving on the otherwise higher fare or paying the difference additionally for the added frills.
“We have a well-established policy that our goal is to segment the market. We want to sell the product we have onboard to passengers who are willing to pay for that. [Cathay will not] use a premium economy cabin as some overstore cabin rather than a truly different product,” Cathay Pacific head of product Alex McGowan said (“Cathay Pacific’s premium economy to improve profitability“, 24th Aug, 11).
But it may all be a case of nomenclature. The early days of the business class was but a marginal upgrade of the economy status. Swissair, the predecessor of Swiss International, swore it would not bow to the fad, believing there was no room for a three-class configuration. But it did in the end. Will today’s premium economy succeed in the same way? It depends on the strength of its exclusivity, but it is unlikely to evovle to the same degree as the business class which, for some airlines, has in fact replaced the first class product.
Quite on the contrary, carriers that susbcribe to the premium economy concept may be compelled to do even more for their business class to maintain an enviable difference.
http://www.aspireaviation.com/2013/03/12/is-the-premium-economy-trend-finally-catching-on/
Eva Air of Taiwan was one of the first carriers to introduce the premium economy class, when it launched its operations in 1991. There was a limited number of seats, that boasted more legroom. Since then, a number of airlines have dabbled with the idea and more of them started to introduce an expanded “middle” class. This became almost a preogative during the global financial ciriss that took a toll on business and first class travel.
Many major airlines have started pushing the trend to catch downgraders and entice upgraders who are not quite ready to splash on frills. They include British Airways, Virgin Atlantic, Air France, United Airlines, American Airlines, Delta Air Lines, Cathay Pacific Airways, Japan Airlines, All Nippon Airways, Qantas and Air New Zealand.
There are noticeable exceptions. Singapore Airlines (SIA) introduced the class dubbed executive economy on non-stop flights between Singapore and Los Angeles but did away with it when it converted the flights to an all-business class configuration. The class was popular, but the prospect of higher yield in business ruled in its disfavour. After all, in good times SIA derived at least 40% of its revenue from its premium market. Since then the airline has insisted that it has no plans to revisit the concept anywhere in its network. Some analysts think it may be a mistake for SIA to not go with the flow as it continues to bank upon complete recovery of the business class traffic.
Image Courtesy of Chris Lofting
Indeed, it is not what makes the premium economy better than the normal economy but by how much. The early model was not that much visibly different, and that probably explained why it was slow in catching on. Today, airlines such as Cathay Pacific and Qantas are putting much more into this in-between class to give it an exclusivity of its own. It used to sell mainly on wider seats with more recline and legroom, but the perks have been expanded to include a string of priorities at check-in, boarding and baggage delivery on arrival, more generous checked baggage allowances, an apparently more refined meal service on board, a wider screen for in-flight entertainment (IFE) system, brand-name amenity kits and higher frequent flyer mileage points.
However, as the name suggests, premium economy is more an economy than a business class product and, in spite of the effort of Cathay Pacific and the like, it still lacks a character of its own. This could explain the lukewarm attitude towards the product of airlines such as SIA and Emirates, which probably prefer to focus their efforts on marketing a superior economy and at the same time be not detracted from the truly premium product of the upper classes. For the premium economy to sell, downgraders from business and upgraders from economy must be adequately tempted with visible advantages to make the trade-off vis-à-vis the cost, whether it is saving on the otherwise higher fare or paying the difference additionally for the added frills.
“We have a well-established policy that our goal is to segment the market. We want to sell the product we have onboard to passengers who are willing to pay for that. [Cathay will not] use a premium economy cabin as some overstore cabin rather than a truly different product,” Cathay Pacific head of product Alex McGowan said (“Cathay Pacific’s premium economy to improve profitability“, 24th Aug, 11).
But it may all be a case of nomenclature. The early days of the business class was but a marginal upgrade of the economy status. Swissair, the predecessor of Swiss International, swore it would not bow to the fad, believing there was no room for a three-class configuration. But it did in the end. Will today’s premium economy succeed in the same way? It depends on the strength of its exclusivity, but it is unlikely to evovle to the same degree as the business class which, for some airlines, has in fact replaced the first class product.
Quite on the contrary, carriers that susbcribe to the premium economy concept may be compelled to do even more for their business class to maintain an enviable difference.
http://www.aspireaviation.com/2013/03/12/is-the-premium-economy-trend-finally-catching-on/
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