Airlines consider changes to premium class travel concepts

Premium class tickets have traditionally been a major revenue generating factor for airlines. For years, business and first class travellers have been willing to pay several times the economy fare for extra legroom and a range of other comforts not available to economy travellers.

The global slump in travel has, however, affected premium class travel the most. The recession has led to less people travelling for business, and those that do have opted for economy tickets, leaving business and first class cabins largely empty.

The International Air Transport Association (IATA) recently announced that it expects the airline industry to lose a phenomenal $11 billion this year- $2 billion more than its previous estimate in June 2009.

The drop in premium class travel has been a major contributor to plummeting airline revenue. While the recession seems to be ebbing, and the travel world has seen some signs of recovery, analysts say the demand for premium class travel is likely to stay low for a long period of time.

Faced with the prospect of empty cabins and shrinking revenue, airlines around the world are now considering fundamental changes to the concept of first class travel. Airlines like Qantas, Air France and KLM are offering ‘premium economy’ fares that get passengers more legroom- and some- but not all comforts of business travel.

With cutbacks in corporate travel budgets, fewer businesspersons are wiling to shell out high business class fares, but may be willing to pay a fare somewhere between economy and business charges to avail of some extra comforts.