Corporates’ cold shoulder for economy class airline travel

Corporate travellers are increasingly saying no to economy travel, with bookings for business and first class on the climb.

Corporate travellers are increasingly saying no to economy class travel, with the proportion of work flights booked in premium cabins on the rise.

Data from Flight Centre’s Corporate Traveller and FCM Travel divisions shows a 43 per cent jump in premium cabin bookings last year compared to the previous year.

Not even higher airfares were a deterrent for businesspeople seeking a good sleep above all else on a long haul flight, with many opting for first class over business to be assured of a lie-flat bed.

As a result, first class bookings accounted for 3 per cent of all corporate bookings in 2023, up from 2 per cent in 2022, and business class travel represented 5.6 per cent, up from 4.

At the same time, economy and premium economy cabin class fell in popularity among corporate travellers by 2.4 per cent.

“Many of our corporate travellers are making the decision to book business or first class travel so they can get a decent sleep if they’re travelling through the night or continue to work productively if they’re travelling through the day,” said Fight Centre Corporate managing director for Australia New Zealand Melissa Elf.

“It can also mean more nutritious meals, and less time lost through the check-in and boarding process.

“It all contributes to general health, wellness and productivity levels, so the extra cost of the fare is viewed as worthwhile for corporate travellers who are short of time as it is.”

Better quality food is just one of the perks of business class.

Premium economy was the biggest loser in the cabin class war, with corporate bookings taken by Flight Centre businesses dropping from 6.5 per cent to 4 per cent.

The data showed corporate travellers booking first class were most likely to be heading to London, Singapore or Los Angeles, while business class was popular on routes to Tokyo, Hong Kong and Kuala Lumpur.

Ms Elf said the growing popularity of the front end of the plane “reflected growth and stability across Australian businesses”.

“This data comes in a period of economic uncertainty, and it goes to show that despite many

businesses feeling the pinch of the cost of doing business, travel continues to be a necessity for business success and survival,” she said.

“Studies show that business travel correlates to economic growth, so as economists predict the

flattening of inflation, we can expect to see activity in corporate travel build.”

The downside to the demand for premium cabins was continuing high airfares, with leisure travellers also snapping up seats in first and business class.

Don’t Forget Travel Group director Andrew Sullivan said last year 38 per cent of his bookings were in the pointy end of the aeroplane, and only about 10 per cent of those were for corporate customers.

“There was definitely a feeling after Covid that ‘I deserve this’ and people don’t want to be squashed down the back anymore,” he said.

“They want that glass of champagne, they don’t want to queue for hours in security and quite simply once you fly flat, you never go back.”

As with corporate travellers, premium leisure passengers were not baulking at high fares.

“Prior to Covid they were paying $5000 to fly business. Now it’s $14,000, $15,000 or even $16,000,” Mr Sullivan said.

“It’s made no difference. In fact it’s difficult to even get seat in business class on Qantas, Singapore Airlines or Qatar Airways.”