With the recession causing a dent in premium travel, airlines are opting to cut first class from planes altogether, but they could be turning passengers away for good.
The days of champers and free toiletries on flights could be fading fast as a severe drop in the number of people opting for first class travel is prompting airlines to cut the cabin all altogether.
The recession has hit the luxury travel market hard. Data from IATA’s Premium Traffic Monitor in December 2009 showed that demand for premium travel was down 17 percent below 2008 levels. “That implies that the industry has effectively lost 6 years of premium travel growth,” said the report.
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According to a recent report by Euromonitor International, entitled ‘Luxury Travel – Changing Travel Habits of the Elite’ premium travel services have seen unprecedented drops in revenue since the global financial crisis in September 2008, forcing airlines to slash prices of first and business class tickets and create promotions in order to encourage premium flight purchases.
“The global economic downturn has shrunk demand for premium travel, and it is difficult to determine whether it will ever recover to the peaks seen in 2007,” said Euromonitor.
“Many airlines have changed the configuration of their planes to reduce the number of premium seats, and it is likely that a percentage of business travellers have permanently defected to the cheap seats.”
Cutting out first class
In March, Singapore Airlines unveiled its brand new A330-300 in Abu Dhabi. The new planes replaced the older Boeing 777 for flights from Abu Dhabi to Singapore, and Singapore to Kuwait and Jeddah.
Despite being a premium carrier, which has built up a strong brand image of providing a luxury service (the airline was one of the first to introduce hot meals, free drinks, hot towels and personal entertainment systems for all classes), the airline has chosen to ditch the first-class cabin on the new planes altogether, designing them in a two-class, economy and business configuration.
Desmond Lim, manager Abu Dhabi, Singapore Airlines told Arabian Travel News: “The demand for first class has dropped in certain sectors, especially the medium haul sector. Last year because of the economic downturn there were a lot of changes in the travel policies of multinational companies, which would choose premium travel.
“We have always modelled our cabin according to market requirements and we see that demand for first class is more on very long haul sectors rather than medium and short haul routes, so we tailor our product accordingly.”
The airline insists that the enhanced comfort of the business class section, with its lie-flat beds, and iPod ports will more than make up for a lack of first class. “Although there is no first class, the business class cabin offers a lot more comfort and luxury for our customers,” said Jose Thachil, marketing manager Gulf, Singapore Airlines.
Other carriers are taking similar steps to reduce a reliance on first. Qantas said in January that it plans to scrap two-thirds of its first class seating to make room for more economy seats on long haul flights as part of a $350 million overhaul. The carrier will reconfigure 29 aircraft leaving first class on just 12 Airbus A380s.
“Our assessment of longer-term travel trends, which pre-dates the economic crisis, shows that international premium travel demand is changing,” said Alan Joyce, chief executive.
“It is vital that we align this offering with forecast demand which is expected to be relatively slow compared to business, premium economy and economy.”
Doha-based Qatar Airways, known for the high standards of its premium cabins, which feature a stand-up bar, cream leather sofas and teak tables with lampshades, also announced plans to eliminate such luxuries from planes scheduled for delivery.
Chief executive officer Akbar Al-Baker told the ITB conference last month: “We have made this decision as we will introduce a new outstanding business class in 2011.
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