Features

Premium Cabins - The Premium Race

31 Dec 2010 by Alex McWhirter

In one of its most recent reports, the International Air Transport Association (IATA) cited an “exceptionally strong third quarter [2010] performance” in the aviation industry. The organisation revised its industry outlook for 2010 to a net profit of $15.1 billion (up from the $8.9 billion forecast in September) while its projections for 2011 have also been revised to a net industry profit of $9.1 billion, up from the $5.3 billion forecast in September.

But IATA points out that net profit margins remain weak and also expects recovery to slow down next year after a strong post-recession rebound. Nevertheless, airlines are acting fast to regain lost ground by launching products that aim to recapture the premium travel market.

Give me space

In a spectacular party attended by thousands of Marco Polo Club diamond members, Cathay Pacific revealed the new product that aimed to address most, if not all, the misgivings its passengers had with the herringbone configuration.

In the pre-party press conference, Cathay’s chief operation officer John Slosar said that the idea of revamping the C-class cabin came about in 2008, when the clouds of recession were still casting quite a shadow on the industry. But it was decided that things would look up again and the demand for business class would come back.

Even though the upgrade was planned some time before, the fact that it is being launched now says something about the improving economic climate. The initial response to Cathay’s new business class seats seems to prove that the airline has made the right move (see page 10, CX new business class seats unveiled with a splash).

Configuration of these new cabins will follow a 1-2-1 layout. The new seats on A330-300 and B777ER, as flatbeds, are 82in/208cm in length from tip to tip, compared with the previous 81in/205.7cm. Usable bed length is 75in/190.5cm, compared with previous 71in/108.3cm. Usable widths differ between the two aircraft models, but the upgrade has improved both by notable margins.

Other advances include increased storage space, side cabinet and shoe locker, direct window view for all seats, and seat controls similar to those seen in luxury vehicles. For details, visit www.businesstraveller.asia (December 7, 2010, No premium economy for Cathay – yet).

Slosar, who is poised to take over as the airline’s chief executive in April, said the investment in installing the seats on new aircraft and retrofitting the old ones was going to cost the carrier “in the excess of HK$1 billion”, or US$128.6 million. The first aircraft to feature the innovations will be an A330-300 which will be deployed on some flights to Sydney in March.

In response to the question from Business Traveller as to whether the airline would consider acquiring A380s, Solar said the airline was happy with its current fleet of B777s and expected delivery of a number of A350-900s. “We are continually looking at our fleet, and how the markets are developing.” He added that if it got to a point that airports were becoming too congested, there might be a possibility of reconsidering the purchase of the superjumbo.

Later on, McGowan caught up with us and explained that from the airline’s observation, it is the product itself and not the aircraft model that passengers are most concerned about. That position is supported by Cathay’s outgoing chief executive Tony Tyler, who said in a recent leadership forum that smaller aircraft allowed flexibility in flight scheduling, which would benefit passengers.

 

The size debate

While Cathay sees no immediate need for the A380, other airlines are seeing a market for it. “We operate our A380s mainly on high density routes. At many of these destinations, we face the constraint of limited landing slots. The A380 offers us the flexibility of increasing capacity to these destinations without the need for additional slots, which may not be available at some of the busier airports,” a spokesperson from Singapore Airlines says.

There seems to be one commonality, however, and it is that airlines are moving to recapture the business class passengers that they lost during the economic downturn. As Alex McWhirter reported on www.businesstraveller.com (December 11, 2010, SIA’s new A380s will lose economy cabin on upper deck), Singapore Airlines’ 13th and subsequent A380s, scheduled for delivery this May and onwards, will have the economy seats on the upper deck removed to make room for more business class products.

Singapore Airlines

It is expected that the reconfigured A380s will be deployed for prime business routes such as Singapore to London Heathrow and the forthcoming Singapore-Tokyo-Los Angeles service. More on www.businesstraveller.com (December 3, 2010, SIA to inaugurate transpacific A380 service).

Air France, on the other hand, marked the delivery of its 200th Boeing aircraft last month. The B777-300ER, with a capacity of 383, is the first to feature the new “Affaires” business class seat and will be serving the airline’s new direct Paris-Ho Chi Minh City route beginning this year. The new seat remains angled lie-flat.

Qatar Airways is a stern supporter of A380 – after all, it will be managing a new airport next year that is specifically designed for the aircraft. The airline’s chief executive Al Baker has recently told the press at a Paris news conference that additional orders are being considered in addition to the five it has secured, the first of which will be delivered next year in time for the opening of the New Doha International Airport. It is undoubtedly a much-needed shot in the arm for Airbus, which has been troubled by recent engine problems with its twin-deck flagship that are seriously affecting the aircraft’s delivery schedule

Marwan Koleilat, Qatar Airway’s senior vice-president commercial East Asia & Southwest Pacific region, points out that the airline has made a conscious decision not to cut routes and reduce flight frequencies during the global financial crisis, a move that has now put the company in an advantageous position to reap the post-recession growth.

This year the airline is expecting to reach 100 in the size of its aircraft fleet and start service to its 100th destination -– Aleppo, Syria. The four-times-weekly flights will commence on April 6. In Southeast Asia, Qatar has recently launched services to Hanoi and Phuket, with the aim to attract transit passengers from countries such as Russia, Germany, Denmark, Sweden and the UK.

 

First class continues

In the wake of the economic crisis, a number of airlines announced or indicated plans to reduce the number of first class seats and even phase them out altogether. Among them are Qantas, which is reportedly only saving them for 12 of its A380s, and Qatar. Since then, there has been much discussion on whether or not first class will eventually become a thing of the past.

Although there were reports that British Airways accepted delivery of several Boeing 777s without first class cabins in 2009, the UK flag carrier has obviously not given up on this top-tier premium sector judging from its new First debut last February on the London-Chicago route.

British Airways

The cabin’s suites, which involved some £100 million (US$155.5 million) of investments, feature a 60 percent wider bed at the shoulders, personal wardrobe, electronic blinds, a 15-inch in-flight entertainment screen, computer ports and noise-cancelling headsets, ambient and mood lighting control, and luxury amenities such as a designer toiletries bag and leather-bound writing table.

The new product will be backed by premium dining service that includes The Dorchester-style afternoon tea. Crew members serving this cabin need to be knowledgeable in food and wine.

A BA spokesperson tells Business Traveller: “The £100 million investment has been made over several years and is part of our ongoing long-haul product and service investment. It will set new standards for luxury premium travel and will be rolled out across our long-haul fleet over the next two years. At the same time, there will be no difference between prices for current First and new First.”

Sixteen out of 75 aircraft of the airline have been installed with the new first class product, among them are eight B747s, two B777-300s and six B777-200s.

“In October 2010, our traffic, measured in revenue passenger kilometres, rose by 3.9 percent. Traffic comprised a 4.6 percent increase in premium traffic and a 3.7 percent increase in non-premium traffic,” the spokesperson says.

The airline’s new fleet of B747 aircraft with this product will soon be serving Hong Kong, according to regional general manager Kevin McQuillan.

Korean Air is expecting its first A380 to commence operation in May, with 400 to 450 seats instead of the manufacturing standard of approximately 800 seats. It will feature Kosmo Suites (in first class, boasting a 79in/200.7cm long bed and 26.5in/67.3cm in seat width) and Prestige Sleeper Suites (21.6in/54.9cm wide business class flatbed seat).  

Premium cabins are lucrative business for airlines and the race to get passengers to return to them through service and product upgrades seems far from over. To frequent travellers, that is nothing but good news.

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