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LIKE new shoots given the


conditions to thrive after a bush fire, the premium economy class is flourishing in the scorched earth of economic recession. The concept ticked over for two decades without casting much of a shadow on the business travel landscape, but over the last two or three years it has shouldered its way into the limelight with airlines around the world launching their versions into the market. The trigger for this growth was undoubtedly the global recession, which forced companies to take a long hard look at their travel spend. Although they still needed to get out into the world, corporate travellers suddenly needed to do it on a budget that was under serious scrutiny. The answer, of course, was premium economy, an option that allowed them reasonable leg and elbowroom in the air at a cost that was not going to make their travel manager break out in a cold sweat.


It was heaven-sent for the SME as well – a breed of company naturally wedded to the concept of value for money.


As a British invention, it is ironic that British business travellers are now least well placed to benefit from a flight class that is gratefully exploited by counterparts around the world. This is down to the invidious Air Passenger


Duty, originally dressed up as a green tax but now universally accepted as a milch cow for the British Treasury, a fact underlined by the government's decision to go ahead with the double-inflation rise in April. While most of the headlines generated by


the anti-APD lobby related to a family of four flying off on holiday to the Caribbean, a serious business concern was that premium economy was rated for APD along with business and first class rather than the half- price rate attached to economy fares. Even the CAA recognised this danger and lobbied the Government to reduce APD for premium economy, arguing that the higher rate attacked the fundamental principal that drove demand – that of price. Regardless of the political infighting over


APD and its effect on premium economy, the class looks set to survive and, at least beyond these shores, prosper. Its survival is guaranteed because it is simply


a very good idea. It wins in both the business and leisure markets, attracting business travellers who cannot afford or who are


prevented from flying full-blown business class and leisure travellers happy to spend a bit more for a much nicer flying experience than they'd have down the back of the aircraft. This is the sort of argument that high-end leisure and business travellers were having with themselves a couple of decades ago when they were eyeing up business versus economy. Today, premium economy is the new business class as the configuration within aircraft begin to morph. Increasingly, first class is being shunted out in favour of a three-class configuration of economy, premium economy and business class. Cathay Pacific plans to launch its new premium economy product in the second quarter of the year on routes to Sydney, Singapore, Toronto and Shanghai. For Toronto, the introduction of


the new up-market economy class will spell the end of first class. Although Cathay is, as yet, unwilling to share too much detail of the new configuration, irreverent aviation observer crikey.com notes that Airliner Routes has discovered that the class has been loaded for the carrier's Boeing 777-300ER flights between Hong Kong and Toronto from March 2. This shows that first class has


economy class for some years," said a spokesman. "We will offer business class, premium economy and economy when our new premium economy comes into play." There is no news yet as to when the new product could be seen on UK routes. There is, however, further evidence of the increasing importance of premium economy in the thinking of international airlines. Tom Galantowicz, Boeing's director of 787 interiors tolled the bell for first class in the Dreamliner Boeing derivative. Talking to the Australian business press he


“There is unstoppable momentum about the spread of premium economy, but there is some disagreement as to its target market”


been dropped, business class reduced, and a 32-seat premium economy cabin inserted, comprising four rows of seats arranged 2x4x2 over the middle of the wing. Crikey.com observes that Cathay's changes


are similar to alterations that Qantas is making to its A380s, in which business class is being cut back from 72 seats to 54 in order to double premium economy on the upper deck of the superjumbo to close to 60 seats. On the record, Cathay Pacific confirms the B777-300ER will be deployed on the Toronto service with a business, premium economy and economy class configuration. The carrier adds that first class remains part


of its international offering, with aircraft featuring combinations of the four classes deployed on different routes in line with the market demand and rotation. "For example, in Sydney, we have operated Airbus A330s with business class and


said: "We're seeing many airlines starting to reduce their full-blown first class offering, mainly because business class is beyond what first class used to be. "The front end of the 787 cabin has first class features, and business class is where the better airlines spend money because passengers are willing to pay for it," he said. "There is a big gap between business class and economy and airlines are looking at an intermediate product to fill that gap, which is why we're seeing interest from airlines in premium economy." While there now seems


to be an unstoppable momentum about the


spread of premium economy, there is some disagreement as to which is the target market selected to occupy the new space. According to Alex McGowan, Cathay Pacific's general manager for product, it's the upwardly mobile economy passenger. "The key with something like premium economy is to understand that it's an economy-plus product, not a business-minus product – at least from a philosophical perspective, but not as a product definition," he says. "It's not seeking to capture people who want


to trade down from business class because, realistically, if you're a frequent business traveller who has important deals to do when you get to your destination, you need that flat bed and you need an environment that's conducive to sleep and work so you can be at your peak when you arrive," he adds. But HRG group supplier and industry


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