With airlines the world over cutting every corner to keep down the cost of economy class tickets, and at the same time boosting business class to court cashed-up travellers, there’s a growing gap between the pointy end of the plane and the back of the bus.
To this end, the introduction of an “in-between”category has become a lucrative opportunity for airlines to capture the business of corporate travellers with clipped wings (a.k.a. budgets) and leisure travellers with a desire for more comfort alike.
Premium economy – in itself an oxymoron at best – first entered the market in 1991 with Taiwanese carrier EVA Air. Dubbed Elite and later Evergreen Deluxe Class, the Taipei-based airline removed two seats from its standard 10-abreast economy cabin on the B747, added six extra inches of legroom and installed 6-inch colour seatback TVs – still something of a novelty in the early 1990s.
Since that time, premium economy cabins have undergone many changes and carriers are now vying for passenger approval with ever-improved “upgrades” to differentiate regular coach from the “better coach”, or premium economy as we know it. In the process, some airlines have tread more carefully than others when designing their premium economy products for fear of cannibalising business class, and others have come to realise that smaller but higher-yielding cabins are preferable.
Why pay a premium?
Asia-Pacific carriers continue to lead the premium economy market with Air New Zealand (Air NZ) regularly – and by different criteria – voted the number-one provider. Indeed, the competition looks at chief Christopher Luxon and his team
for inspiration.
Air NZ gains customer approval by offering a bit more comfort and a greater feeling of being “someone special” than most. With a generous seat pitch of 41 inches, three inches more than the seemingly agreed-upon industry standard, customers in the Kiwi carrier’s premium coach class enter and exit their seats without the obligatory bumping into and brushing against fellow passengers. Fair enough, you may think, but is it really worth the up to 100 per cent premium on top of regular economy? I would argue yes, because not only do you get more or less unrestricted aisle access by way of the 41-inch pitch, you also get to enjoy a significantly improved meal and beverage service.
Kiwis pride themselves in living in one of the planet’s most culinary-advanced corners, bringing to the table an abundance of fresh seafood, meats and produce. Being a prideful ambassador of New Zealand, Auckland-based Air NZ serves up a refreshing array of locally sourced meal options to its premium economy guests, ranging from signature lamb chops to hapuka, a soft-fleshed deep water fish from the southern Pacific Ocean. In typical Kiwi style, all entrée options are accompanied with a selection of New Zealand wines, many sourced in small units from small producers. (See Tried & Tested review on p24).
Across the Tasman Sea at Qantas Airways in Sydney, premium economy has also gained a strong foothold. Like Air NZ, its Australian neighbour has successfully managed to convince the customer that it is worth forking out extra for going premium. A larger seat, proper duvet, quality on-board food and beverage, and a clearly-segregated cabin have won Qantas a considerable number of premium economy customers since it introduced the cabin in early 2008. However, its popularity faces a “challenge” due to unavailability on some flights [from the Asia-Pacific] to Australia according to David Fraser, managing director at Flight Centre, Greater China.
Qantas’ head of creative development and customer experience, Kylie Morris, says passengers tend to appreciate premium economy on very long sectors, such as flights from Australia to London and Los Angeles. On shorter sectors, customers are either willing to trade up to business class or remain in economy. Flight Centre’s Simon Fraser echoes these observations. “People are prepared to pay a fair amount for a good premium economy product, so in that sense it works better on long haul flights”.
In it for the long haul
In Japan, local rival carriers All Nippon Airways (ANA) and Japan Airlines (JAL) have built a reputation for delivering a solid premium economy experience. ANA features the product on ex-Japan long-haul services to Europe and the US, while JAL also offers it on medium-haul routes to Southeast Asia. Both carriers have tweaked their cabins during the past two years and as such offer some of the latest cabin features of the segment. These include large, padded legrests, adjustable footrests, and select items from the business class meal and beverage service.
The two largest South Korean carriers – Asiana Airlines and Korean Air – do not offer premium economy, while in Mainland China, the concept is still in its infancy. Of China’s “Big Three” carriers – Air China (CA), China Eastern Airlines (MU) and China Southern Airlines (CZ) – only Beijing-based CA and Guangzhou’s CZ operate a premium economy product. However, neither of these two offers it uniformly across its fleet. To this end, Star Alliance affiliate CA features premium economy on board the A330-300 and B777-200 aircraft, while Skyteam member CZ showcases it on the A330-200, A330-300 and select B777-200s. Both have not installed premium economy seats on their recently-inaugurated fleets of B787 (CZ) and B747-8 (CA). In the case of both carriers, the products currently offered reflect a baseline economy product with increased legroom. No ancillaries are provided to enhance the on board, or on-the-ground, experience.
Over at Cathay Pacific Airways in Hong Kong, customer feedback to the “product in the middle” has been mixed. Unveiled in 2012, the Oneworld member has had trouble filling its premium cabins on some routes. As it transpired, passengers valued the extra space only when flying long-distance. As such, the carrier has had no difficulty filling the premium economy cabin on flights from Hong Kong to Europe and the US – all flights longer than ten hours – but has come to realise that customers flying shorter distances did not see the value in paying for a premium economy seat.
As a result, Cathay Pacific last year started reducing the number of premium economy seats on flights to Australia in exchange for more economy class seating to reflect the current demand in the Australian market. It has also decided to retire the product in the Middle Eastern and South Asian markets. First affected by the change will be Cathay’s services to Bahrain, Doha, Dubai and Riyadh from this month, while Chennai, Colombo, Delhi, Hyderabad, Male, Mumbai expect to see the cancellation from October.
However, select routes, notably Male and Colombo, will retain a three-class seating configuration including premium economy class at least until 2016. That said, Cathay Pacific will continue to sell these sectors as two-class (economy and business) even though it will continue to operate them with a three-class configuration (including premium) until the refit. On busy flights, frequent flyers of the airline’s Marco Polo Club and Oneworld Emerald or Sapphire members could stand a good chance of getting upgraded to premium. Redress for all will happen from spring 2016, when Cathay plans to roll out an all-new, “more premium” premium economy class starting with the introduction of the Airbus A350XWB to the fleet.
Indian innovation
If the Cathay Pacific case suggests that premium economy is only viable on routes longer than ten hours, the case of India’s recent start-up Vistara shall ultimately prove it.
The brainchild of a partnership between Singapore Airlines and India’s Tata Group, Vistara took to the skies early this year as a full-service – but domestic only – alternative to India’s notoriously flawed flag carrier, Air India, and the many no-frills options inaugurated in the past decade. While Vistara’s advent in Indian aviation was much heralded, sales of its premium economy product have been consistently trailing those of the economy and business cabins. “Vistara’s market entry has been generally welcomed by the consumer, but people want to either go business all the way or stay in economy because it is so much cheaper,” a major Mumbai-based distributor told Business Traveller Asia-Pacific. At the moment, Vistara’s longest route is the two and a half hour journey from Delhi to Hyderabad.
Meanwhile, at parent company Singapore Airlines (SIA), premium economy will only make its debut later this year. Having gone back and forth about whether or not to introduce the product, Singapore’s legacy carrier says the new cabin will be neither closer to the business nor economy experience, and instead have its own unique features. It recently confirmed the gradual rollout of the premium economy cabin across its long-haul network from this August, first debuting on the A380 and B777-300ER fleets and eventually on the first 20 of the soon-to-be delivered 70-aircraft strong fleet of Airbus A350-900s.
Crafted for SIA by JPA Design and manufactured by Zodiac Aerospace and ZIM, the leather-clad seats will be 18.5 to 19.5 inches wide with a pitch of 38 inches according to the airline, compared to a 19-inch width and 32-inch pitch in standard economy. The new premium economy seat will feature an 8-inch recline on the seatback, plus a flip-up padded leg rest and 13.3-inch HD video screen – the largest in its class says SIA – and wifi. Other creature comforts will include Singapore Airlines "Book the Cook" service to order your upgraded inflight meal in advance, champagne on the drinks menu, plus access to priority check-in and baggage handling with a checked luggage allowance of 35kg, which is 5kg more than in economy.
To avoid cannibalisation and maintain appeal, an important consideration in the introduction of premium economy to an airline’s product portfolio is pricing. Too expensive, and the cabin will stay empty. Too cheap, and the business cabin will stay empty. Turkish Airlines serves as a case in point: Having introduced “Comfort Class” – its name for the premium economy cabin – on their fleet of B777s in 2010, Turkish eventually realised it had installed too many premium economy seats. With 28 fully flat business seats and 80 in Comfort Class, Turkish experienced a supply-demand imbalance that forced the average premium economy cost down, making it ever-more competitive against the business cabin. With more passengers migrating from the business cabin to Comfort Class, which boasts a 46-inch pitch, the airline’s revenue management team was in dismay. As such, the Istanbul-based carrier has decided to remove its premium economy product from routes to the Asia-Pacific region from April to make more space for its higher-yielding business class passengers.
Premium goes stateside
Over at the traditional US carriers operating in and out of Asia-Pacific region, the story is quite different. The “Big Three” of the States – American (AA), Delta (DL) and United (UA) – offer what they call enhanced economy seating, as opposed to a separate class of service. Enhanced economy class seating typically involves several rows of seats at the front of the economy class cabin. Seating in this section may be offered – on a first come, first serve basis – to economy class travellers with elite status, plus travellers who buy full-fare tickets. If space is available, other flyers holding coach tickets may be offered the opportunity to sit in the preferred seats for a fee. Unlike at the Asia-Pacific counterparts, though, no extra perks are offered, meaning the meal and drinks service is the same as in the standard economy cabin. Passengers must also swipe their plastic for other ancillary items such as seatback TV and headphones, depending on the carrier.
As all three continue their rapid expansion in the region – AA just opened a Hong Kong-Dallas service and will launch Beijing-Dallas this summer; DL now flies Hong Kong-Seattle daily and UA flies Chengdu-San Francisco – many frequent travellers have been calling for a rethink of the “enhanced economy” product, which is understandable given that flight duration commonly exceeds the 14-hour mark. Asia-Pacific carriers have set the bar high for their US competitors expanding in the region after many years of network hiatus following Chapter 11 filings and subsequent restructuring. If the US carriers ever plan to compete on the premium economy front for travel to and from the Asia-Pacific, an “enhanced economy” product just won’t do.
Over in the Middle East, the region’s “Big Three” – Emirates Airline, Etihad Airways and Qatar Airways – have all steered clear of the premium economy trend. Qatar Airways’ chief executive, Akbar Al Baker, recently quipped that the airline’s new economy class is effectively a premium economy offering at a cheaper price. Emirates boss Tim Clark has repeatedly asserted that he wouldn’t rule it out, but didn’t suggest that such an offering was currently in the works.
The absence of the premium economy cabin at the Gulf carriers might be cultural, sociologists say, as the Middle East is effectively a region of haves and have nots. This effectively eradicates a solid middle class, and lowers the potential marketability of the upgraded economy cabin because passengers either fall into the category that would fly first or business only, or could only afford economy. Again, however, the other prominent argument from the Gulf carriers is that their standard economy cabins already outclass other carriers’ premium economy cabins and as such they lack incentive to develop the product for the moment.
A complement to business
Premium economy is not working on short- and medium-haul flights but it still has potential over long distances. To make it work, airlines need to consider creating a cabin identity and providing reasonable amounts of personal and storage space, cabin integrity, connectivity, plus high-quality catering and amenities. Airlines must accept that a premium price tag commands expectations for a premium experience. As seating comfort is always challenged by lack of space on board an aircraft, ancillaries such as priority baggage handling, extensive menus, drinks lists, plush duvets and pillows, large touchscreens and complimentary wifi are of utmost importance.
Premium economy should never replace business class and – if done right – it never will. The luxury of stretching out in bed on your transpacific journey is something no premium economy product will ever replace, and nor should it ever attempt to. That said, what a good premium economy seat, if priced right, may very well accomplish is to take some of the dread of flying long-haul off the economy passenger’s mind. Arriving at your destination reasonably well-rested and well-fed is what we should expect from the premium economy experience – perhaps nothing more but certainly nothing less.
Kiwis pride themselves in living in one of the planet’s most culinary-advanced corners, bringing to the table an abundance of fresh seafood, meats and produce. Being a prideful ambassador of New Zealand, Auckland-based Air NZ serves up a refreshing array of locally sourced meal options to its premium economy guests, ranging from signature lamb chops to hapuka, a soft-fleshed deep water fish from the southern Pacific Ocean. In typical Kiwi style, all entrée options are accompanied with a selection of New Zealand wines, many sourced in small units from small producers. (See Tried & Tested review on p24).
Across the Tasman Sea at Qantas Airways in Sydney, premium economy has also gained a strong foothold. Like Air NZ, its Australian neighbour has successfully managed to convince the customer that it is worth forking out extra for going premium. A larger seat, proper duvet, quality on-board food and beverage, and a clearly-segregated cabin have won Qantas a considerable number of premium economy customers since it introduced the cabin in early 2008. However, its popularity faces a “challenge” due to unavailability on some flights [from the Asia-Pacific] to Australia according to David Fraser, managing director at Flight Centre, Greater China.
Qantas’ head of creative development and customer experience, Kylie Morris, says passengers tend to appreciate premium economy on very long sectors, such as flights from Australia to London and Los Angeles. On shorter sectors, customers are either willing to trade up to business class or remain in economy. Flight Centre’s Simon Fraser echoes these observations. “People are prepared to pay a fair amount for a good premium economy product, so in that sense it works better on long haul flights”.
In it for the long haul
In Japan, local rival carriers All Nippon Airways (ANA) and Japan Airlines (JAL) have built a reputation for delivering a solid premium economy experience. ANA features the product on ex-Japan long-haul services to Europe and the US, while JAL also offers it on medium-haul routes to Southeast Asia. Both carriers have tweaked their cabins during the past two years and as such offer some of the latest cabin features of the segment. These include large, padded legrests, adjustable footrests, and select items from the business class meal and beverage service.
The two largest South Korean carriers – Asiana Airlines and Korean Air – do not offer premium economy, while in Mainland China, the concept is still in its infancy. Of China’s “Big Three” carriers – Air China (CA), China Eastern Airlines (MU) and China Southern Airlines (CZ) – only Beijing-based CA and Guangzhou’s CZ operate a premium economy product. However, neither of these two offers it uniformly across its fleet. To this end, Star Alliance affiliate CA features premium economy on board the A330-300 and B777-200 aircraft, while Skyteam member CZ showcases it on the A330-200, A330-300 and select B777-200s. Both have not installed premium economy seats on their recently-inaugurated fleets of B787 (CZ) and B747-8 (CA). In the case of both carriers, the products currently offered reflect a baseline economy product with increased legroom. No ancillaries are provided to enhance the on board, or on-the-ground, experience.
Over at Cathay Pacific Airways in Hong Kong, customer feedback to the “product in the middle” has been mixed. Unveiled in 2012, the Oneworld member has had trouble filling its premium cabins on some routes. As it transpired, passengers valued the extra space only when flying long-distance. As such, the carrier has had no difficulty filling the premium economy cabin on flights from Hong Kong to Europe and the US – all flights longer than ten hours – but has come to realise that customers flying shorter distances did not see the value in paying for a premium economy seat.
As a result, Cathay Pacific last year started reducing the number of premium economy seats on flights to Australia in exchange for more economy class seating to reflect the current demand in the Australian market. It has also decided to retire the product in the Middle Eastern and South Asian markets. First affected by the change will be Cathay’s services to Bahrain, Doha, Dubai and Riyadh from this month, while Chennai, Colombo, Delhi, Hyderabad, Male, Mumbai expect to see the cancellation from October.
However, select routes, notably Male and Colombo, will retain a three-class seating configuration including premium economy class at least until 2016. That said, Cathay Pacific will continue to sell these sectors as two-class (economy and business) even though it will continue to operate them with a three-class configuration (including premium) until the refit. On busy flights, frequent flyers of the airline’s Marco Polo Club and Oneworld Emerald or Sapphire members could stand a good chance of getting upgraded to premium. Redress for all will happen from spring 2016, when Cathay plans to roll out an all-new, “more premium” premium economy class starting with the introduction of the Airbus A350XWB to the fleet.
Indian innovation
If the Cathay Pacific case suggests that premium economy is only viable on routes longer than ten hours, the case of India’s recent start-up Vistara shall ultimately prove it.
The brainchild of a partnership between Singapore Airlines and India’s Tata Group, Vistara took to the skies early this year as a full-service – but domestic only – alternative to India’s notoriously flawed flag carrier, Air India, and the many no-frills options inaugurated in the past decade. While Vistara’s advent in Indian aviation was much heralded, sales of its premium economy product have been consistently trailing those of the economy and business cabins. “Vistara’s market entry has been generally welcomed by the consumer, but people want to either go business all the way or stay in economy because it is so much cheaper,” a major Mumbai-based distributor told Business Traveller Asia-Pacific. At the moment, Vistara’s longest route is the two and a half hour journey from Delhi to Hyderabad.
Meanwhile, at parent company Singapore Airlines (SIA), premium economy will only make its debut later this year. Having gone back and forth about whether or not to introduce the product, Singapore’s legacy carrier says the new cabin will be neither closer to the business nor economy experience, and instead have its own unique features. It recently confirmed the gradual rollout of the premium economy cabin across its long-haul network from this August, first debuting on the A380 and B777-300ER fleets and eventually on the first 20 of the soon-to-be delivered 70-aircraft strong fleet of Airbus A350-900s.
Crafted for SIA by JPA Design and manufactured by Zodiac Aerospace and ZIM, the leather-clad seats will be 18.5 to 19.5 inches wide with a pitch of 38 inches according to the airline, compared to a 19-inch width and 32-inch pitch in standard economy. The new premium economy seat will feature an 8-inch recline on the seatback, plus a flip-up padded leg rest and 13.3-inch HD video screen – the largest in its class says SIA – and wifi. Other creature comforts will include Singapore Airlines "Book the Cook" service to order your upgraded inflight meal in advance, champagne on the drinks menu, plus access to priority check-in and baggage handling with a checked luggage allowance of 35kg, which is 5kg more than in economy.
To avoid cannibalisation and maintain appeal, an important consideration in the introduction of premium economy to an airline’s product portfolio is pricing. Too expensive, and the cabin will stay empty. Too cheap, and the business cabin will stay empty. Turkish Airlines serves as a case in point: Having introduced “Comfort Class” – its name for the premium economy cabin – on their fleet of B777s in 2010, Turkish eventually realised it had installed too many premium economy seats. With 28 fully flat business seats and 80 in Comfort Class, Turkish experienced a supply-demand imbalance that forced the average premium economy cost down, making it ever-more competitive against the business cabin. With more passengers migrating from the business cabin to Comfort Class, which boasts a 46-inch pitch, the airline’s revenue management team was in dismay. As such, the Istanbul-based carrier has decided to remove its premium economy product from routes to the Asia-Pacific region from April to make more space for its higher-yielding business class passengers.
Premium goes stateside
Over at the traditional US carriers operating in and out of Asia-Pacific region, the story is quite different. The “Big Three” of the States – American (AA), Delta (DL) and United (UA) – offer what they call enhanced economy seating, as opposed to a separate class of service. Enhanced economy class seating typically involves several rows of seats at the front of the economy class cabin. Seating in this section may be offered – on a first come, first serve basis – to economy class travellers with elite status, plus travellers who buy full-fare tickets. If space is available, other flyers holding coach tickets may be offered the opportunity to sit in the preferred seats for a fee. Unlike at the Asia-Pacific counterparts, though, no extra perks are offered, meaning the meal and drinks service is the same as in the standard economy cabin. Passengers must also swipe their plastic for other ancillary items such as seatback TV and headphones, depending on the carrier.
As all three continue their rapid expansion in the region – AA just opened a Hong Kong-Dallas service and will launch Beijing-Dallas this summer; DL now flies Hong Kong-Seattle daily and UA flies Chengdu-San Francisco – many frequent travellers have been calling for a rethink of the “enhanced economy” product, which is understandable given that flight duration commonly exceeds the 14-hour mark. Asia-Pacific carriers have set the bar high for their US competitors expanding in the region after many years of network hiatus following Chapter 11 filings and subsequent restructuring. If the US carriers ever plan to compete on the premium economy front for travel to and from the Asia-Pacific, an “enhanced economy” product just won’t do.
Over in the Middle East, the region’s “Big Three” – Emirates Airline, Etihad Airways and Qatar Airways – have all steered clear of the premium economy trend. Qatar Airways’ chief executive, Akbar Al Baker, recently quipped that the airline’s new economy class is effectively a premium economy offering at a cheaper price. Emirates boss Tim Clark has repeatedly asserted that he wouldn’t rule it out, but didn’t suggest that such an offering was currently in the works.
The absence of the premium economy cabin at the Gulf carriers might be cultural, sociologists say, as the Middle East is effectively a region of haves and have nots. This effectively eradicates a solid middle class, and lowers the potential marketability of the upgraded economy cabin because passengers either fall into the category that would fly first or business only, or could only afford economy. Again, however, the other prominent argument from the Gulf carriers is that their standard economy cabins already outclass other carriers’ premium economy cabins and as such they lack incentive to develop the product for the moment.
A complement to business
Premium economy is not working on short- and medium-haul flights but it still has potential over long distances. To make it work, airlines need to consider creating a cabin identity and providing reasonable amounts of personal and storage space, cabin integrity, connectivity, plus high-quality catering and amenities. Airlines must accept that a premium price tag commands expectations for a premium experience. As seating comfort is always challenged by lack of space on board an aircraft, ancillaries such as priority baggage handling, extensive menus, drinks lists, plush duvets and pillows, large touchscreens and complimentary wifi are of utmost importance.
Premium economy should never replace business class and – if done right – it never will. The luxury of stretching out in bed on your transpacific journey is something no premium economy product will ever replace, and nor should it ever attempt to. That said, what a good premium economy seat, if priced right, may very well accomplish is to take some of the dread of flying long-haul off the economy passenger’s mind. Arriving at your destination reasonably well-rested and well-fed is what we should expect from the premium economy experience – perhaps nothing more but certainly nothing less. 
