Class Shake Up

Airlines Reconfigure Seating To New Travel Patterns

As the divide between the business and first class services narrow, upgradation of business class facilities points towards better flying times for the frequent business traveller. Charmaine Fernz and Bhisham Mansukhani unravel the onboard modifications...

A computer generated image of Airbus’ Super First Class that privileged passengers travelling on its A380, A40 and A350 will soon experience

Comfortable, ergonomic seats that recline to simulate beds, adjustable leg and thigh supports, a headrest that can be adjusted in infinite ways and a trove of ancillary frills. Imagine if you got all this, and more, for the price of a business class ticket.

Fortunately for frequent business travellers, this scenario is not too far from reality. Airlines, the world over, are trimming their first class seat inventories with very little distinction between the first and the business class. This perhaps points to the possibility that airlines are anxious about first class mutating into a white elephant. After all, why would anyone pay twice the price to travel first class?

Business class, till recently, was perceived as a step down, a melting pot for frugal corporations still trying to retain an illusion of hierarchy for their executive cream and the nouveau successful. But business class passengers now are likely to find their perquisites augmented.

Fill Up Or Rip Out

Fuselage space, all carriers agree, is the final frontier and every bit of its occupation has to be vigorously justified. This culminates in the divinely self-centered goal of yield management.

While geopolitical crises and economic meltdowns have driven seasoned and start-up airlines alike into the vortex of bankruptcy, suddenly, every inch save the cockpit is up for review. Arindam Bose, GM (IT) of LG Electronics, an incessant flyer, zeroes in on the key difference between first and business class. He says, "The difference is in the inclination of seats. First class seats go horizontal while those in business class don't. Ultimately, the comfort and service level is the basic difference. The USP for the first class is its 180-degree seat which is popular particularly on long haul flights."

But the first class begins to lose its exclusivity as airlines begin to offer all the above and more in business class. It now offers ergonomic seats that recline to fully-flat beds, adjustable leg and thigh supports, adjustable headrest and a host of other frills. No surprise, then, that airlines see a passenger shift from the expensive first class to an upgraded business class at the same cost.

For instance, a Mumbai to Dubai first class flight with Emirates would cost Rs. 41,371 while its business class seat comes for Rs. 33,500. On the other hand, its long-haul flight (Mumbai-Dubai-JFK) for first class is Rs. 2,71, 820 as against Rs. 1,50,000 for business class. These figures show a difference one can't ignore.

First Class Fades Away

The price gap between the two classes has obviously led passengers to opt for the cheaper option. As a result, airlines are resorting to phasing out their first class altogether. SriLankan Airlines was one of the more prominent airlines to have phased it out completely as far back as 1998.

Lal Talgaswatte, airline manager (Western & Central India) SriLankan Airline, says, "We realised that the cabin factor on the basis of revenues was dipping consistently. Corporate houses were invariably purchasing business class for executives rather than first class because they were cutting down costs. Even the up-market holidaymaker was opting for business class because it retained the quality."

Rodney D'Cruz, sales manager (India) of Delta Airlines, agrees with Talgaswatte. He says, "It was in 1998 that Delta took the decision to phase out its first class thereby investing more in and enhancing our business class to provide our passengers - the business elite - an enhanced version of business class but at the same price. Today, all international routes have a two-class configuration. This decision was taken after an in-depth study that concluded that full-paying revenue passengers were a diminishing lot. Business class remains a growing phenomenon while first class is a limited and staid segment."

Even in the US, which is the world's largest domestic aviation market, revenue per passenger per mile in first class experienced a downturn as early as the previous decade. This means that this phenomenon was underway even before the 9/11 catastrophe.

Abdulla Nasser Abdulla, VP (India & Nepal) of Emirates Airlines, delves deeper. He says, "While most full-service airlines have still retained their first class configuration, the factors forcing some to change over are mainly related to route profitability and volumes. There are destinations where even Emirates uses only a business and economy class because the route delivers a majority of mid-range value passengers throughout the year thereby making it important to generate every additional seat possible."

The general opinion is an adaptation of the popular first class motifs to the business class to meet the uncertain first class and the aspiring business class niches midway. Avionic soothsayers had in fact long since written off first class as many airlines scrapped it in favor of a combined ‘business first' product at business class prices.

Continental Airlines, Air Canada and Delta Airlines were among the first to usher in the new trend. Virgin Atlantic changed the paradigms with its upper class - 50 to 60-inch almost-horizontal sleeper seat and a lounge and bar first class service at a business class price bracket.

The airline stunned its rival British Airways on its Washington-London route at the turn of the millennium with a business class that consummately outdid British Airway's first class for almost a third of the cost.

Business Class Comfort

Emirates Business Class

Business class seats are now often more comfortable than older first class seats. In fact, airlines that have abandoned first class now have leather seats in business class. Abdulla adds, "The removal of a first class implicitly means an upgradation of the business class but at a cheaper price. A compromise of sorts. The odd passenger wanting to travel in first class is therefore treated to an 'upgraded' business class and this fits in well with companies who are cutting down on costs.”

Although some companies levy time and distance rules for deciding between first and business class (long-haul trips over six hours would mean first class travel), that too is changing now.

Cathay Pacific, which recently won the Skytrax global award for its first class product, has in fact done away with it on its regional and short-haul flights. Instead, it now concentrates on a developed business class. Rupert Bray, country manager (India, Nepal & Bangladesh) of Cathay, says, "A New Regional Business Class (NRBC) product was introduced on our short-haul routes. Today, the airline operates a three-class configuration on most of its long-haul routes, while its regional routes offer a two-class product. Routes to and from India are regional routes and therefore have only business and economy class."

Computer generate imagery of the interiors of the Airbus A350 Business Class

He adds that the newly-introduced NRBC is currently being fitted in its B777-300 aircraft that it operates out of India. The seat is redesigned for more comfort with a new leg rest and additional features that allow seat flexibility, stowage space and a larger personal television.

And to further buff up the point, passengers reaffirm. Subhash Goyal, president of IATO and a frequent flyer on business class, concedes, "There was a time when first class was popular. It was considered as the province of the wealthy or the savvy frequent flyer. But the services in business class have improved with time and are equivalent to that of the first class."

Emirates Business Class

Kavi Ghei, director of Trac Representations (India) Pvt. Ltd, raises an interesting point regarding the unique lack of distinction on the ground in India where business and first class passengers have a common lounge. This, in a way, erodes the perceived premium that first is supposed to boast. Again, first class wasn't only about comfort. The window of flight times at short notice, open tickets and seamless transfers to other carriers were factors too. This distinction between first and business classes has vapourised over the years.

But there are other factors, a tad more serious, that are corroding the rationale of going first. Once upon a time, corporates would only approve club class travel for senior executives. But now, cost supercedes status, determining passenger hierarchy. Be they cost-conscious or comfort-conscious, every organisation has a travel policy. First class simply isn't deemed a normal privilege.

An international trend-watcher asserts, "Today, business class offers executives more than what first class offered five years ago. Therefore, there is no justification for paying more for first class over business class."

More For Less

On the other side, some carriers today have trained their sights on the rarest of the rare - the next generation of first class travellers, the price-insensitive gentry.

Lesser opulence, though, is definitely not part of the script called super first. Take EVA Air's super first for instance. Its passengers are greeted with fine champagne served in crystal glass and all rows are 75-inches apart with luxurious deep seating. It even allows travellers to choose their own mealtimes.

While EVA predominantly flies the Boeing, Airbus claims to be many aeronautical miles ahead. Virgin Atlantic boss Richard Branson was caught wondering not too long ago if he could raise the bar for first class. But given his A380 order pending with the Toulouse-based aircraft maker, he needn't any more. Airbus is hard at designing super first for its A340 family, its latest long-haul variant, A350 and A380 super jumbo. The super first, claims Kiran Rao senior VP (Sales) of Airbus, will be almost recessed from the business and economy class with a private bar and lounge.

According to Rao, "While airlines are phasing out their first class in favour of business class on certain routes, we have noticed another contradicting trend on some other routes. There is a demand for a grander version of the first class on long-haul routes for which Airbus has positioned its super first. And its greatest selling point is privacy. Some of the notable airlines that have opted for the super first include Emirates, British Airways, Air France and Cathay Pacific."

Ramanjeet Singh, country product manager (Note PC) of Samsung India Electronics, says, "Frequent flyers invariably prefer first class. It also includes those who earn miles, get a Gold card so that they receive priority, privileges and upgrades. Comfort, service, sophistication, extra benefits, privacy - these are the reasons for choosing first class. People are flying much more frequently and more are asking for first class seats. The convenience of freshening up after overnight flights at the lounges is what a business traveller requires. Lounges have private shower facilities as well as valet service for clothes pressing and shoe cleaning." Clearly, add-ons dictate the choice of class.

Business Class of Swiss International Airlines

BK Ong, GM (India) of Singapore Airlines, feels that installing business class is essentially a route-specific phenomenon. "For example, from the Indian perspective, Kolkata is not a viable route for first class but Mumbai, Delhi and Bangalore are. We certainly do not plan to discontinue our first class services from the Indian market because even though there are few passengers, it is high yield for an airline," Ong says.

Peter Luethi, COO of Jet Airways, adds, "Apart from being route-specific, it is also a branding issue for an airline. The essence lies in capturing the true first class passenger while also enhancing the business class potential."

Charles Phelps-Penry, regional GM (South Asia) of Etihad Airways, believes that while the market for a full first class is limited, it isn't altogether lost. "We are able to sustain first class particularly from our home market. Of the total aircraft, about five to 15 per cent would be dedicated to first class. Looking at it futuristically, there is a market but with selective airlines only. The big markets for first class are Middle-East, UK, US, Europe and even parts of Africa. Nigeria is a very big first class market."

Upgrading is also smart business since repeat flyers bring in the bulk of revenue. Frequent business travellers also are more likely to fly on undiscounted fares and stay loyal to a single carrier if its frequent flyer programme is rewarding enough or if its simply company policy. Air Transport Association of America figures reveal that domestic passenger travel on first class increased from 24.8 million in 1990 to 47.8 million in 2001 and one of its conspicuous drivers was the upgrade.

Economies To Scale

Yield management, the miraculous strategy of modern airlines that allows them to charge 20 different fares to passengers on the same plane, rears its compounding head yet again.

Now, however, yet another group of airlines is citing opportunity to upgrade its most reliable and volume-driven business of economy class. This citing is not however without urgency. Off late, cost compulsions have forced even scheduled carriers to wing out freebies like pillows and snacks which, rather paradoxically, low-fare airlines are offering for free. To compete, scheduled carriers have to offer value for which they presume their passengers will pay extra.

So while Northwest was busy eliminating another 'frill' - a half-ounce bag of 18 braided pretzel sticks to save $2 million a year, Singapore Airlines' ultra long-range Airbus 340-500 unintentionally created civil aviation's fourth class. The aircraft which flies one of the world's longest non-stop commercial services features just 181 seats in a spacious two-class configuration comprising Raffles (business) class and a new executive economy class. While the latter seats 117, its executive economy class seats in a 2-3-2 configuration with a seat pitch of 37 inches, a seat-back incline of eight inches and a seat width of 20 inches. There's also an executive economy class where passengers can help themselves to snacks and drinks.

The interiors of business class on the Airbus A340

Similarly, Air New Zealand introduced a premium economy product that featured wider seats set at a 40-inch pitch and in-seat power and full premium-class meal service, setting willing economy class passenger back by a 20 per cent premium. Ong says, "The A340-500 long-haul route from Singapore to New York has its entire economy class in the executive economy category. What sets this new concept apart is bigger seats, more seat pitch and lots of space. In a normal A340-500 aircraft, one can put in as many as 300 economy seats. But we have put in just 181 seats since it is a journey of 16-18 hours. So, if one actually goes by the numbers, you certainly have to pay more for better comfort. The price difference between a normal economy and an executive economy is about five to ten per cent."

Therefore, creating a more flexible product that stretches price points becomes absolutely relevant. Leuthi adds, "The concept of business class was introduced with a view to create a more affordable version of the first class. With the executive economy came the price-value relationship wherein those who cannot book a business class ticket can go in for an executive economy class."

Virgin Atlantic was the first to introduce the concept of executive economy. Here, most airline would use the old business class seats thereby providing more seat pitch, leg space, enhanced service levels and better catering. Phelps-Penry avers, "A premium economy cabin allows the airline to save on costs as well as target those business class travellers who may be cost-conscious and those economy travellers who have always aspired to a business class-like experience.”

Abdulla is however quick to caution. "The problem with premium economy is that if it is not defined very clearly in the mind of a traveller or the airline itself then it stands to lose value. The passenger does not perceive a 'fit' between the price and the service delivery and very soon rejects it. Also, very often the promise of a premium economy experience isn't delivered and is usually just market hype."

Rao concurs, "Airlines have to strike a balance between their economy and business class because the latter is by far its most important revenue stream. That said, airlines see premium economy as an effective tool to 'sell' the airline. There are a number of 'sell-ups' that take place when there is a shortage of seats and a marginally higher cost is seen as a better option to a steep hike in convincing a passenger to shun a competitor."

Despite Rao's insistence that airlines have their own individual designs on premium economy, an initial mock-up fuselage of the A380 betrays the manufacturer's catalytic role in laying the foundation for this class. A typical three-class arrangement aboard the Airbus A380 offers seating for approximately 540 people, and while fuselage mockups that line extravagances like bars, duty-free boutiques and nurseries are being written off, an all-economy 800 stock too, appears grossly pessimistic. With a cabin width stretching 13 inches further, economy class passengers get an added 1.3 additional inches per seat. Not to mention the economy class frills now supplied by many top carriers. It is then for the carriers to freeze on the bouquet of accompanying frills.

(With inputs from Neeti Chopra, New Delhi)