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Premium Economy Soars in Popularity Among Returning Business and Leisure Travelers

by Irene Rawlings

Oct 29, 2021

PHOTO: © DELTA AIR

Class Act 2021

The middle cabin, tucked in between business class and economy,  has grabbed the attention of both business and leisure travelers.  It also proves a big moneymaker for the airlines. The cost per ticket can be as much as 80 percent more than business class. Some airlines call it Premium Plus, some call. it Premium Select, and others call it Elite Class. Whatever the name, most major airlines offer this class of service on international and many long-haul domestic flights.

For many years, airlines relied on big-spending business travelers to fill the high-priced, front-of-the-plane seats. Now those customers are traveling less frequently and on greatly reduced expense accounts. According to Deloitte Insights, it could take another two or three years for business travel to recover, and with the popularity and effectiveness of virtual meetings, it may take even longer to reach pre-pandemic levels. So, for now, many business travelers are booking into premium economy.

After sheltering at home for 18 to 24 months, leisure travelers don’t want to spend their first post-COVID flights sitting cheek to jowl with total strangers in a packed economy class … and they don’t have to. Households around the world tucked away more than $5.4 trillion in savings since the coronavirus pandemic began (equal to 6 percent of global gross domestic product), according to Moody’s Analytics. This is money that would normally have been spent on travel, entertainment, clothes (and dry cleaning), haircuts and color, gym memberships and eating out in restaurants. As the world begins to open up, many people can now indulge in the affordable luxury premium economy represents — wider seats, cozy blankets, soft cotton pillows and meals served on real china.

As the coronavirus spread worldwide and countries closed their borders, air travel took a big hit. By April 2020 the average number of passengers had fallen 92 percent from 2019 levels. Industry losses topped $370 billion worldwide; North American carriers lost $88 billion.

The International Air Transport Association, with 290 member airlines, called 2020 the worst on record financially but went on to say prospects for a stronger bottom line are looking up as more travelers return to the skies. Providing there is not another and more damaging wave of COVID-19, IATA predicts the worst of the air travel collapse is now in the past.

From both financial and customer service perspectives, premium economy is destined to become the airlines’ next big post-pandemic thing — a popular product that not only captures the imagination of the flying public but also contributes in a major way to each airline’s bottom line.

Skyscanner reports the basics of premium economy are similar across all the airlines: 19- to 20-inch recliners (from five main suppliers) with a pitch of around 36 to 38 inches; five to seven inches additional legroom; and two or three fewer seats per row (configured 2-3-2 or 2-4-2) than regular economy (3-4-3), with only 32 to 40 seats in the cabin. Many airlines also entice travelers with lounge access, accelerated check-in, priority boarding, increased luggage allowances, noise-cancelling headphones, amenity kits, chef-curated meals paired with premium wines, and self-service bars open for drinks and snacks for the duration of the flight.

Delta Air Lines is betting big on a rosier, post-COVID future, positioning itself as the “premium airline” and investing heavily in its long-haul fleet. The rollout of its Premium Select cabins, paused by the pandemic, is back on track, to be completed by early 2022. Delta’s new Airbus A330-900neos all come with Premium Select cabins. The airline is also retrofitting its older Boeing 767-300ERs with Premium Select cabins in an extra-roomy 2-2-2 seating configuration — despite plans to retire 767-300ERs in 2025. The Motley Fool sees this as an indication the airline expects a quick return on its investment.

Citing statistics when speaking at the 2021 Wolfe Research Global Transportation & Industry Conference, Glen Hauenstein, president, Delta Air Lines, said, “What we see is recovery in those [premium cabins] that is running 10 points ahead of Main Cabin recovery … there is demand for premium products for broader perspective than just traditional business customers.”

Speaking at the same conference, Vasu Raja, chief revenue officer, American Airlines, noted, “Even though we don’t have the big corporate business travelers that normally book those cabins, there are a lot more customers that are willing to actually go and pay to sit up there, and that’s the thing that we think is a little more likely to stick around.”

Premium Economy

Photo: © UNITED

United Airlines is making a massive investment in aircraft — 200 Boeing 737 MAX and 70 Airbus A321neo planes — the biggest order by a single carrier in a decade. United CEO Scott Kirby called this the “United Next” plan and said it will have a transformative effect on the customer experience. In this plan, there is a “roughly 75 percent increase in premium seats [includes first, business and Premium Plus] per North American departure.” Russell Carlton, corporate communications manager, United Airlines, said, “United Premium Plus seating on select long-haul international and premium transcontinental routes gives our customers more options to choose the best experience that fits their wants and needs when they travel. These are a popular option for our customers, as they include some of our high-end amenities from United Polaris.” This now includes the new, uber-comfortable United Polaris seats in Premium Plus. In March 2021 the carrier relaunched premium transcontinental service from JFK to Los Angeles (LAX) and San Francisco (SFO).

Dubai-based Emirates just unveiled a much-anticipated premium economy class — the first of the major Gulf-based airlines to do so — on the first of its newly delivered Airbus A380s. Additional A380s will be delivered throughout 2021 and 2022. Emirates is also installing premium economy on its orders of Boeing 777X aircraft. “Premium Economy is perfect for any and every kind of traveler who wants to experience a higher level of comfort and relaxation, regardless of where or why they’re traveling,” said Essa Sulaiman Ahmad, divisional vice president, USA & Canada. What to expect? Elegant, cream-colored leather seats. Cushioned leg rests. Ergonomically designed, six-way adjustable headrests. Regionally inspired meals. “Among my favorite features is the overhead mood lighting and thousands of movies, TV shows and albums available on the individual 13.3-inch HD TVs,” he added.

Premium Economy

PHOTO: © SWISS

Swiss International Air Lines, one of the last in the Lufthansa Group to offer premium economy, is planning an official launch by summer 2022. It promises to be comfortable but not particularly spectacular — three rows of eight seats (2-4-2) at the front of the economy cabin. Fixed-back shell seats are wider by two inches with a pitch of 38 inches. Expect early boarding, twice the baggage allowance, amenity kits, a 16-inch TV screen and three choices of in-flight cuisine (with wine). Operating from Zürich and Geneva, the service will be available on Boeing 777-300ER flights to Bangkok (BKK), Hong Kong (HKG), Los Angeles, (LAX) Miami (MIA) and Singapore (SIN).

The other airlines, including legacy carriers like Air Canada, British Airways, Qantas, Virgin Atlantic, Japan Airlines, Lufthansa, Singapore Airlines, Philippine Airlines and Air France are not currently planning expansions or major changes to existing services. However, they’re reporting a robust demand for premium-economy seats. Passengers are seeing extra comfort and business-class perks; airlines are seeing a healthy bottom line. It is definitely a win-win.

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