MARCH/APRIL 2013
Premium air
Among our own clients, we still see a percentage who go first class, and that hasn’t changed. It’s a small percentage, but it’s fairly constant.” American Express Business Travel director Prashanth Kuchibhotla says clients tell him that offering premium travel helps to differentiate employers in the competition to win and retain talent. “If travellers are on the road four or five times a week, they want to know the business they work for is prepared to pay for them to travel in comfort,” he says, adding: “While return on investment for premium travel is difficult to measure, anecdotally we hear from customers that it allows for a more effective workforce, as travellers turn up to meetings refreshed and focused. Financially, premium travel is a small
“Airlines are increasingly shifting capacity, featuring first class service only where the market demand warrants it”
part of the costs associated with business travel, and we hear from clients who use it that the benefits far outweigh the costs.” It is not all a bed of premium-class roses, however. Kuchibhotla says traveller experience “varies greatly from carrier to carrier and from region to region”, a fact that CWT’s Turner believes could affect the way airlines allocate their first-class capacity. “It makes no commercial sense to offer a very expensive product on a system- wide basis if that product suffers – or is perceived to suffer – as a result. Airlines are increasingly shifting capacity, featuring first class service only where the market demand warrants it. First class will probably
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Continental and United business class and first class products flying around for some time to come. This year United increased its transatlantic service from London to its hub in Houston. The double-daily flights to Houston were of Continental stock, the third one is United through-and-through, and has its new Global First product in addition to business and economy.
www.united.com
become more route-specific – it can only continue to exist on the basis of supply and demand.” Right on cue, Buying Business
Travel sister company
Seatplans.com reveals that when British Airways takes delivery of the first of its Boeing 787 Dreamliners, the plane will come in a three-class configuration: World Traveller economy class, World Traveller Plus (BA’s premium economy brand ) and Club World business class seats – no first class. That sort of fine-tuning is crucial, given the costs involved. By the end of next year, Lufthansa will have spent around Ð3 billion upgrading its first and business class product, while Air France is investing “several hundreds of millions of euros” in premium cabin upgrades over the next two years. British Airways is in the middle of a £5 billion spending spree that includes a much- improved first class product, both in the air and on the ground.
That kind of investment needs to be
carefully targeted – an area in which United Airlines is fast becoming a specialist. “The economic downturn has brought pressure on travel budgets within companies, but most businesses know they have to ‘seal the deal’ and that means visiting their customers,” says Bob Schumacher, United’s UK sales managing director. “Our first class cabin continues to
have relevance, but on some routes more than others. In respect to the future, we will continue to watch global trends closely. There will always be demand for all cabins but, again, some more than others. “We want to be able to respond to customer demand and deploy aircraft of the right size and right configuration for each route.” Much older, and marginally
wiser, Bob Papworth declined to comment. ■
VIRGIN ATLANTIC All change for Virgin this year, as it works to align its transatlantic services with Delta. For regular fliers, there may be no immediate difference, for although Virgin has just 5.4 million seats each year compared with Delta’s 165 million, it will provide 75 per cent of the capacity in the joint business courtesy of its six flights daily between Newark and JFK and London Heathrow.
www.virginatlantic.com
OAG: regional total seat capacities A DECADE OF CHANGE
2001
EUROPE First
Business Economy Total
MIDDLE EAST First
Business Economy Total
AFRICA First
Business Economy Total
NORTH AMERICA First
Business Economy Total
LATIN AMERICA First
Business Economy Total
ASIA First
Business Economy Total
2,376,292 60,215,056 639,822,468 702,413,816
3,098,578 3,157,521 66,205,349 72,461,448
1,461,495 3,924,723 67,974,266 73,360,484
49,667,564 20,284,179
1,089,830,973 1,159,782,716
3,180,850 6,148,631
242,583,143 251,912,624
6,713,450 33,868,788 541,894,288 582,476,526
Source: OAG for Buying Business Travel 2012
2,204,684 67,284,578 956,906,294
1,026,395,556 1,963,124
11,243, 463 153,549,831 166,756,418
663,404 8,553,194
121,044,629 130,261,227
41,142,483 19,761,976 951,661,700
1,012,566,159
2,616,072 12,395,109 338,741,094 353,752,275
17,994,048 47,544,696
1,128,522,303 1,194,061,047
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