Why business class is the new black
‘Premium leisure’ travellers are fuelling demand for business class cabins unlike anything carriers have seen before.
After two years cooped up at home, overseas travel is being embraced as tightly as a long-lost friend. Aircraft heading out of Australia are top heavy with passengers, and airline executives finally have something to smile about with the demand for premium cabins unlike anything they’ve seen before.
International Air Transport Association director-general Willie Walsh flagged the extraordinary rebound in May, noting “premium travel was actually increasing at a faster rate than economy travel”. “That’s not an indication of business-travel recovery,” he said. “We believe it’s an indication of what we call premium leisure. These are people with disposable income looking for a premium experience.”
Emirates divisional vice-president Australasia Barry Brown first noticed the surge in demand for premium cabins in March, as confidence to travel overseas grew. With between 90 and 146 premium seats on its A380s, Emirates has the largest offering of any airline operating out of Australia and according to Brown, there is no trouble filling them.
“We’ve seen a robust intake of bookings for our premium cabins, which includes both first and business class. Across both cabins, along with our newly launched premium economy cabin, we are experiencing extremely high load factors.”
So high, in fact, Brown says travel agents are advising clients to book for Europe almost a year in advance.
The demand means corporate travellers are having to change their purchasing habits. “Before 2019, corporate travel was typically booked two to three weeks before departure but the need to plan and book in advance to secure seats is now being recognised and we’re seeing a shift to early booking behaviours,” Brown says.
“Overall, airline capacity for travel both to and from Australia is sitting at about 60 per cent compared to pre-pandemic, so there is greater pressure to secure seats in advance.”
Qantas, Singapore Airlines, Qatar Airways and Etihad all tell a similar story, with almost overwhelming demand for premium cabins led by leisure travellers.
Singapore Airlines’ Southwest Pacific regional vice-president Louis Arul says since borders reopened in November 2021, the percentage of leisure travellers filling the best seats has exceeded pre-Covid levels. Although many customers are upgrading with frequent flyer points, a large number are paying commercial fares to sit at the pointy end.
“This is likely attributed to a range of factors, including a desire to ‘treat’ themselves having been locked down for an extended period, and in many cases the desire to have more personal space,” Arul says.
Qatar Airways is anticipating growth in business travel, but meanwhile leisure passengers are filling the void. “The pandemic showed how precious life can be, so travellers are making decisions on their priorities and taking these trips now rather than putting them off to a later date,” a spokesman says.
“What we are definitely seeing is that taking a business-class flight and spoiling yourself with an enhanced premium experience is part of this new way of thinking – travellers are seeing incredible destinations and want to travel in style.”
Even before travel took off, airlines were investing heavily in their premium cabins in anticipation of a post-Covid desire for greater personal space. Throughout the pandemic, Qantas and Singapore Airlines pushed ahead with A380 cabin refurbishments despite debate over the return of the superjumbos. At the same time, Emirates embarked on one of its most ambitious projects to date – a multibillion-dollar retrofit of 120 A380s and Boeing 777s, with 4000 premium economy seats.
Although still in the early stages, Emirates has put one of the four cabin A380s on its Sydney-Dubai services, and will add another by mid-December. Melbourne is set to follow in February, which Brown says is testament to the “instant success” of the premium economy product.
“Throughout August and September, the cabin has reflected over 90 per cent load factors to and from Australia,” he says.
“In October and November, seats are already over 60 per cent booked and that number grows by the day.”
Singapore Airlines is also capitalising on insatiable demand for premium travel with a $50m renovation of its Changi Airport lounges, and the final stages of its A380 fleet refurbishment.
Ten of Singapore’s 12 superjumbos are now sporting a swish new interior, with the final two currently undergoing retrofitting.
Arul says the lounge upgrade could not have been better timed, reopening in May with 30 per cent more seating and space – just as travel demand exploded.
“These investments combined with our strategy of operating a young and modern fleet ensures we continue to provide our customers with the latest products both on the ground and in the sky,” says Arul.
Qatar’s spokesman acknowledges the importance of premium cabins, and says the airline’s popular QSuites remain the industry leader. “However, to remain the No 1 airline you cannot sit still and rest on your laurels, and our group CEO has said we can expect an enhanced version of the QSuite when our Boeing 777X aircraft arrive (in 2025),” he says.
Qantas has also made no secret of the fact its cabin design for the airline’s new A350-1000s panders to premium travellers. Although still several years from delivery, the ultra-long-range aircraft will seat only 238 passengers, of which 98 will be premium seats, in an effort to ensure maximum comfort on flights of 20-hours duration.
And in another case of “watch this space”, Etihad Airways is planning a premium product launch on its new A350s. It’s no coincidence the investment is being made at a time of peak demand from leisure travellers and the slow but steady return of corporates.
“Restrictions on corporate travel are being lifted, so we saw this sector pick up over the past two quarters,” says area general manager Sarah Built. “However, premium travel is still largely being driven by leisure travellers.”