Demand for Business Class Travel (Airline Style) Plummets
In a recent New York Times article, Jane L. Levere discusses the plummeting demand for business and first class travel seats on the world’s major airlines. The recession we have been in for the last 6 quarters has forced most of us to rethink the value proposition of every dollar we spend and travel is not immune to the rethinking process.
The NYT article says “’In building up their premium classes, airlines have been building themselves a castle in the air that’s ultimately unsupportable,’ said Peter Morris, the chief economist in London for Ascend Worldwide, an aviation consulting company. ‘Unless the business world carries on expanding its needs for these services, the castle, to some extent, will come crashing down.’ ‘With cuts in corporate travel budgets, there is now much less willingness to pay up to eight times the fare on long haul for the extra legroom and Champagne offered by business class,’ he added.”
The article goes on to say: ”Airlines charge a lot more to sit in the front of a plane. Consider these prices that United Airlines charges for a round-trip flight between O’Hare International in Chicago and Hong Kong. An economy-class seat is listed at $810, a business-class seat at $8,770 and a first-class ticket $17,524. For what it calls Economy Plus on that flight, the price is $1,068.”
Did they say eight times the fare to ride up front?! Or is it seventeen times? Lets just go with the eight times for now.
What do I get for an eight times multiple of the back of the bus fare? I get more space, but not eight times more space. I get a good meal and nice wine or even champagne and friendlier service, for sure.
Here’s what I don’t get for the eight times multiple – I don’t get there any faster.
I still arrive at the same time the poor guys in the back arrive. I don’t skip the security lines (okay maybe I get to go in the fast lane in some places) and I still have to take my shoes off as I go through the metal detector. I can’t always go non-stop. I still get to experience the joys of big hub airports. And when the flight gets delayed due to traffic congestion at the big hub airport,I still get to sit and wait.
Even though I am in the business of private aviation, I still ride the airlines since sometimes from a price standpoint it just makes sense. On a rare occasion, I have ridden in the front of the bus. It is nice. But not nice enough to pay an eight times multiple – at least in my humble opinion.
As we come out of a recession and money starts flowing again, my prediction (which the airlines and industry experts will agree with) is that the premium seats up front are not going to sell as well as they used to at that unrealistic multiple of pricing. Travelers need more than legroom and nice champagne for that price.
What they really want is more of their most precious commodity. Time! And that is the one thing the airlines cannot deliver any better today than they have been able to do in the past. In fact, with increased hub traffice, they are only going to get worse in the time savings category.
For all of you who are rethinking the value proposition of the seats up front in the mass transit system we call the airlines - take a look at private air transportation in all of its forms. We can give you the leg room and the champagne and privacy. But most importantly, we can give you back your time.
