Premium Economy seats are typically half the price or less those of Business Class.
“Therefore, airlines price Premium at enough of a mark-up to attract an up-sell from Economy, but not eye-wateringly so, for price-conscious travellers.”
Russell said Premium Economy is attractive to airlines for another reason – it’s easier to upgrade into as it requires less loyalty points, so tempts passengers to use them.
“Loyalty points are a liability on airline balance sheets, so up-selling into Premium optimises load factor and depletion of loyalty points,” he said.
“Premium Economy conveys a sense of some exclusivity, luxury, and status, below the business price point. Also, with corporate and fiscal budget constraints, PE fits easier into travel spend than business class for expense justification.”
Passengers in Premium Economy get a bigger seat, better food, more amenities and dedicated check-in although don’t typically get lounge access.
A report by frequent flyer analyst firm IdeaWorks finds airlines are working quickly to add more Premium Economy seats, from a relatively low base.
Among 50 airlines operating widebody aircraft around the middle of last year, Economy made up 82.6 per cent of seats, Business Class 12.2 per cent, Premium Economy 4.6 per cent and First Class – being phased out by most airlines – is at just 0.6 per cent of aircraft real estate.
IdeaWorks finds that Delta Air Lines has added 15,000 seats to its daily schedule in the past two years, on its Boeing 767 aircraft taking out six Business Class seats to put in 20 Premium Economy seats, Swiss will introduce its biggest Premium Economy cabin on A350-1000s with 38 seats and United Airlines recently disclosed that its Premium Plus is now its most profitable cabin.
“Look for airlines to follow Delta’s lead by converting a few Business Class seats and a bigger chunk of economy seats.”
Air New Zealand first announced its “Super Economy” in June, 2004, as part of a sweeping cabin revamp. Its hard back SpaceSeats were a popular part of the evolution of the cabin and it is returning to hard shell seats from later this year when new Dreamliner aircraft arrive and a retrofit of existing planes starts.
In research ahead of the revamp, the airline found that in Premium Economy, 51 per cent of travellers are men, 60 per cent are over 50, and 78 per cent are travelling for leisure. Just 12 per cent are high-value customers. They want personal space, to receive priority end-to-end, feel rested and ready, “escape from the madness” and control their experience.
In Premium Economy, they want to work while on board and also want to fight boredom and feel connected.
The new hard-shell back on the seat offers more privacy and a protected space where passengers can recline at leisure without interrupting the person behind them.
They will have footrests, will be easier to get in and out of and have specially designed bedding and amenities.
Singapore Airlines introduced its Premium Economy in 2015 and Emirates also took its time introducing the cabin, assessing rivals’ products and bringing it in last year. It was an immediate hit with flights to New Zealand proving a great test bed for the product and was one of the first markets to have the new 56-seat cabin.
Emirates’ Premium Economy seats in a two-four-two configuration are leather and have a seat pitch of up to 40 inches (101cm) and are 19.5 inches wide. This compares to 32 inches to 34 inches with seats 17.5 inches wide in Economy.
Premium Economy passengers dine off Royal Doulton china tableware using stainless steel cutlery.
Amenity kits contain socks, eyeshades, a toothbrush and toothpaste. There’s a dedicated check-in area at Dubai International Airport, a checked baggage allowance of up to 35kg and priority boarding ahead of economy passengers.
