MARCH/APRIL 2013
Premium air
in 2001, out of a total of 582 million available seats, 541 million were in economy class, 33.8 million were in business class and only 6.7 million up front. By 2012, the grand total was nudging 1.2 billion, with 1.1 billion in economy, 47.5 million in business and nearly 18 million in first class. However, Asia’s enthusiasm for the pointy end of the plane is far from the global norm. Even in the Middle East, known for its fair share of ‘high net worth individuals’, over that same 2001-12 timeframe, the number of first class seats on the market has slipped from around 3.1 million to fewer than two million. Business class capacity, in contrast, has shot up from 2001’s three million to more than 11 million last year. In North America, first class capacity has remained fairly consistent, with 49 million seats for sale in 2001 and 41 million on the market last year. Here in Europe, the total airline seat capacity has risen dramatically since the turn of the century. In 2001, OAG data shows airlines had more than 702 million seats to sell; last year, that figure had risen to more than one billion. But while the number of economy seats has risen from just under 640 million to nearly 957 million over the same period, a rise of roughly 50 per cent, the number of business class seats has risen less than 12 per cent, from 60 million to 67 million. The number of first class seats has dropped – from 2,376,292 in 2001 to 2,204,684 in 2012.
So who is filling these first-class seats? Not one of the travel managers questioned by BBT at last month’s Business Travel Show admitted to paying front-end fares, with one financial sector buyer claiming: “We don’t need to. A few [first class travellers] use their frequent flyer points, but the rest qualify for an automatic upgrade.”
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Haneda), makes this route one to watch. With the devaluation of the yen, Japan could be on the comeback trail. • See reviews, p118
www.jal.com
MALAYSIA AIRLINES A complete transformation here, not only in having fully-flat seating in business class and first, but also a double-daily schedule that has moved from the B747-400
THE PRICE OF PRIVILEGE
NEW REGION-BY-REGION analysis of business class travel trends suggests travel managers with the best bargains at their fingertips are also the least likely to book their travellers into a premium cabin. According to Carlson Wagonlit's latest CWT Perspectives report, Travel Management Priorities for 2013, buyers in Latin America enjoy some of the most competitive intercontinental business class deals – and are least likely to use them. CWT’s research suggests that the
average price paid in Latin America for an intercontinental business class ticket is US$4,581, just over three times the US$1,403 price-tag for the economy class equivalent. But only 25 per cent of the region’s intercontinental air bookings are for seats at the front.
Similarly, in the Asia-Pacific region, the
average price paid for an intercontinental business class ticket is US$4,667, just less than four times the US$1,242 for the same deal in economy class. Only 34 per cent of bookings are for the premium cabin. By contrast, in North America, the
average intercontinental business fare works out at US$6,055, nearly four times the average economy ticket price of US$1,567. The differential is no deterrent, however, with 37 per cent of corporate air travel booked in business class. The most profligate buyers are to be found in EMEA, where, despite the fact that the average US$6,523 intercontinental business class fare is more than quadruple the US$1,617 for the economy equivalent, 39 per cent of bookings are for premium cabins.
“When I was at Cathay, there was always a set of folk – and they’re still there – who simply want to be in first class and who are prepared to pay for it. From a general corporate travel perspective, however, I can’t see a need for it – business class has improved so much over the past ten years or so, first class isn’t worth the extra cost.” Carlson Wagonlit Travel (CWT) director Nigel
FCM Travel Solution's Jo Greenfield is inclined to agree. “I think when you go into a first class cabin, you are looking at a lot of upgraded passengers,” she says. “First class is almost like a business class cabin for gold card-holders.” Capita Business Travel sales director
Matt Selby, whose career includes 13 years with Cathay Pacific, says:
to the A380. The introduction of the super-jumbo means an increase in weekly seat capacity of 16 per cent, from 5,971 seats to 6,916 in each direction, which includes more business class and first class seating. Bear in mind you can fly down to Australia with MAS on the A380 in business (or first) and the prices are keen. Worth considering.
www.malaysiaairlines.com
Turner begs to differ. “As business travel has grown, so business class has become less exclusive. We will ignore the upgrade market, but there are still the board members of certain companies for whom it is part of the job,” he says. “They’re paying for more than just a better seat – the environment you are in, the privacy, the personal service – that all adds up.
LUFTHANSA Lufthansa has introduced a new fully-flat business class seat, but only on its B747-800 aircraft (the extended and enlarged B747). For the rest of the fleet, including the carrier’s ten A380s, it’s the same lie-flat version your travellers will have encountered in the past, though the new A330-300 deliveries do have the new fully- flat seat onboard.
www.lufthansa.com
QATAR AIRWAYS The carrier put its first B787 Dreamliner, with new economy and business class, on the London route and then immediately had to withdraw it because of the battery problems experienced by JAL and ANA. At the time of writing there is no date for its reintroduction.
www.qatarairways.com
UNITED Despite the merger with Continental, you will find both
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