Monday, 31 March 2014
Thursday, 13 March 2014
We all want more space on a plane right?!
Who'd have guessed? The airline
bean-counters are working out that their biggest money-spinner isn't first
class with its showers and private bathrooms or business class with its
lie-flat beds, which has led to the abolition of first class for many of them
because it is so lavish.
No, in an industry where
"yield" is measured in square centimetres, the airline accountants
are in a lather about premium economy class.
If you're over 30 years of age,
you may remember seeing it on your first trip on a plane with your parents. In
the 1980s, it was that quiet little space at the front of the plane they called
business class: 38 to 40 inches (96 centimetres to 102 cms) forward space
between seat rows and a slightly wider seat and better meals.
"Premium economy is kind of the new business class,"
Kent Craver, a Boeing direct of cabin experience and revenue analysis at
Boeing, told the Wall Street Journal last week.
That's because it is virtually
identical to the business class of the 1980s and 1990s in both comfort and
price pitched at twice to four times the best discount economy fare compared to
up seven times the best discount economy rate for today's business class.
The fact that there is now such
a price chasm between the premium passenger experience and the increasingly
squeezed and torturous cattle class down the back was destined to cause more
creaking in the airline revenue model as the flying business searches for
elusive profits.
One of the biggest holdouts against premium economy as an
affordable compromise between a bed and a sardine seat finally folded last week
when Euro giant Lufthansa decided it was going to finally bite the bullet.
Like Qantas before it,
Lufthansa was worried that premium economy would simply cannibalise its
business class market.
According to the Wall Street Journal, the latest
was Lufthansa's third internal attempt to justify a premium economy class after
twice previously concluding that it would simply encourage its existing
business class customers to spend less on the cheaper option.
The Wall Street Journal reports that, only after Lufthansa in
2012 began upgrading its business class to lie-flat beds from almost-flat ones
was it confident of not cannibalising its own premium traffic.
"You ask yourself: isn't
there a down-sell risk?" says Lufthansa's chief commercial officer Jens
Bischof. "I see the upsell potential as significantly higher."
Lufthansa premium economy (96
cms per seat row) will be installed between October this year and the northern
summer of 2015. An estimated 10 per cent of Lufthansa's long-haul seats will be
premium economy.
It's strictly a mathematical
equation: Lufthansa's new premium economy seats occupy 50 per cent more
floorspace than standard economy, but can be sold for multiples more. Even
allowing for the value-added perks like china meal service, amenity kit and an
extra checked bag, the airline is way in front.
"It will be a very
profitable product," says Bischof.
Who could forget Qantas's
decade-long equivocation about what traditional airline people regarded as a
radical departure from the set-in-stone rules of airline passenger class
division?
As airlineratings.com publisher Geoff Thomas reminded us recently, Qantas chief executive James
Strong was adamant in 1997 that he "couldn't make a case for" premium
economy.
It wasn't until after Qantas's
then-partner British Airways had made a smash hit of premium economy that
Qantas CEO Geoff Dixon finally gave the green light in 2008, not long before he
left the airline and Alan Joyce took over.
Premium economy is
well-entrenched in our part of the world, with Qantas, Virgin Australia and Air
New Zealand among the true believers.
But significantly Singapore
Airlines is holding out, as are the three big Gulf carriers, Emirates, Etihad
and Qatar, and the US carriers flying to Australia, United and Delta, although
a number of US carriers offer varying standards of premium economy
domestically.
Do you consider premium economy value for money? Have you used it in
your recent travels? What was your verdict?
Monday, 3 March 2014
Student Leader Voting
Hi team,
Please follow the link to vote for this year Balmoral Student Leaders.
https://docs.google.com/a/
The power is in your hands!
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