he aviation industry appears to be
reassessing the value of first class.
Some still think of it as integral to
their service offering, but many are
struggling to fill seats and a few have
decided to eliminate the cabin class
from their aircraft altogether.
United is one such airline. In a 2015
interview withBuying Business Travel, the carrier's then
president, Jeff Smisek, called international first class
a losing business, which has prompted the airline to
reconfigure its existing B767-300ERs from a three-class
to a two-class cabin set-up without first.
United’s current order book of 14 B777-300ERs,
seven B787-9s and 14 B787-10s will not feature a first
class cabin at all, further illustrating the airline’s move
to distance itself from the product.“[First class is] a
money loser, and we will be eliminating it over time,”
said Smisek.“The problem is that it takes a lot of real
estate, and people are not willing to pay for that. I
suspect the other carriers, apart from the subsidised
Gulf airlines, would say the same thing.”PUTTING THE SQUEEZE ON
A key driver behind the declining appeal of first class
is the highly competitive business class offerings that
have been developed in recent years. Flat-bed seats in
long-haul business class are no longer a rarity but are
expected as the norm. Combined with multi-course
meals served on fine china, state-of-the-art in-flight
entertainment systems and personalised service,
today’s business class is encroaching into the first class
territory of yesteryear.
China Airlines (CAL) is a casualty of this trend. The
Taiwanese carrier did offer first class on its B747-400
flights to the US, but retreated from the North
American market last year. While it still operates the
B747s on a number of short-haul, intra-Asia flights,
its first class seats are currently marketed and sold as
business class fares.
Meanwhile, CAL’s B747 replacement – the
B777-300ER – has been configured to feature only
a three-class layout: business, premium economy
and economy. Last year, the airline’s chief executive
Sun Huang-Hsiang revealed that,“the new Premium
Business class is currently adequate for the company’s
foreseeable future, and I believe that our customers will
be very satisfied with it”.
Impressive business class standards have certainly
made an impression on travellers, with several
Business TravellerAsia-Pacific forum posters noting that
flying with Qatar Airways on business class rivalled
the first class experience found on other airlines.“I flew
with Cathay Pacific (CX) in first recently, and felt that
my experience [on Qatar Airways’ business class] was
on par and in some areas even better – and that says a
lot as CX is world class,” said ExecPlatAA.AviationI 39THE SUITE LIFE
While CAL may be eliminating first class soon, its
CEO noted that it was cautiously looking into the
possibility of introducing a new suites class standard.
“Many airlines [have eliminated] first class, and
changed to business, premium economy and economy
class,”said Sun.“The talk that we’re having now is
whether we should [launch] a suites class with much
more luxurious amenities and service. But we do not
anticipate very high demand for such an offering.”
Singapore Airlines (SIA) was the pioneer of the
suites class, which it introduced on the A380 in 2007.
However, the airline’s CEO Goh Choon Phong
recently revealed that demand for the luxury class has
been lukewarm, and SIA will be reducing capacity
accordingly once the next batch of superjumbos is
delivered.
“Going forward, you can expect we will be reducing
the number of suites on the A380s,”said Goh.“What
that number is, we’ll announce [in due course]. But the
idea is to always better match demand and supply.”
One area on the map that appears immune to
the quandary of first class is the Middle East. Etihad
Airways’A380, which it received in 2014, features
The Residence. A super-luxury three-room suite, it
consists of a living room, bedroom and bathroom and
is accompanied by a dedicated Savoy-trained butler
service. Despite a hefty US$32,000 price tag for a
one-way flight between Abu Dhabi and New York, the
product has been a hit.
“We have experienced an overwhelmingly positive
response to The Residence within the US – beyond
our expectations, in fact,”Etihad’s chief executive
James Hogan said last year. “We are seeing healthy
forward bookings.”
The reasons for the continuing success of first
and suites class in the Middle East include the large
numbers of super-wealthy businessmen, politicians
and royalty who regularly connect through the region,
and the fact that the big three Gulf carriers – Emirates,
Etihad and Qatar – have built their reputations and
brands largely around their luxury in-flight products,
as was recently highlighted by the Emirates advertising
campaign featuring Jennifer Aniston.CHANGING CORPORATE BEHAVIOUR
In an age where information is shared and
disseminated easily via the web, publicly listed
companies have been forced to change their travel
policies in order to appease shareholders.
This was the case last year when DBS Bank found
itself in hot water. According to Singapore’sThe
Business Times, the company’s directors flew their
spouses and themselves to London in first class for an
annual board meeting. Not surprisingly, the news drew
ire from many locals, with some calling it a “blatant
abuse of power”.businesstraveller.asia JUNE 2016