Dubai: The world’s top airlines are increasingly falling out of favour with their premium product and replacing it with extra business and economy class seats in hope of carrying more passengers.
“There has not been a full return to pre-global financial crisis premium traffic share. Companies reduced the number of employees that could travel in first, and many airlines don’t expect that to come back,” said Will Horton, senior analyst at CAPA — Centre for Aviation, by email.
A return first class fare from Dubai to London can cost around Dh31,500, depending on the airline, when booking six months ahead. A business class fare can cost around Dh12,500.
Emirates airline confirmed this week it will be the latest carrier to scale back first class from its fleet. The airline will switch from an entirely three-class Airbus A380 fleet from late 2015 to a mixed three-class and two-class fleet.
American Airlines has also joined the foray and is removing its premium product from 47 aircraft while Germany’s largest airline, Lufthansa, is scaling back its first class by 30 per cent and upgrading its business product with a $1.2 billion investment.
Cutting back the number of first class seats can offer huge costs savings. Not only are airlines more likely to fill the far cheaper economy and business class seats, they also cost much less to put in. Emirates will have spent — at $500,000 per seat — a total of $399 million on 798 first class seats across 57 A380s by the end of the year.
“Airlines cannot afford to allocate precious space on board aircraft to first class if it is unlikely to be sold, it makes more sense to reallocate this to business class,” said John Strickland, director at UK-based JLS Consulting, by email.
Etihad Airways is going against the grain of its peers with introduction of The Residence, a three-bedroom suite that comes with a butler, on its soon to be delivered A380s. Tickets from Abu Dhabi to London cost $20,000.
It will also be one of three airlines with first class on its also soon to be delivered Boeing 787 Dreamliners. The other carriers, which Horton believes have been “too optimistic,” are China Southern and Xiamen.
But as airlines back off from first class they are heavily investing in business class.
Qatar Airways, which only offers first class on its A380s, claims its business class is just as good as any other carrier’s first class. Similar is expected at Emirates.
“Forthcoming improvements to Emirates’ business class are expected to move the business product up and narrow the gap with many other airlines’ first class,” Horton said.
Strickland believes that “it’s not surprising that first class has disappeared from some routes” because of the new business products.
“What used to pass for a first class product is now readily available in the quality of business class where many airlines have upped their game,” he said.
While Emirates, which operates the largest A380 fleet, will still offer first class on some A380s and is even investing in improving the product with a new bedroom-style concept, it is following similar moves by other international airlines.
“There are some routes that don’t require first class,” said Shaikh Majid Al Mualla, Divisional Senior Vice President, Commercial Operations — Centre at Emirates, in an interview this week.
The confirmation of a two-class A380 comes despite demand for first-class seats on their superjumbos outshining their two other cabins in 2013, according to reported comments made by Chief Commercial Officer Thierry Antinori earlier this year.