First class capacity drops as ancillary sales up
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U.S. airlines are to cut back on the number of first-class seats following the rising popularity of business class and premium economy.
According to the Wall Street Journal, American Airlines is to reduce its first class cabins by 90% from 750 seats to 80, with only 10 planes offering the product on long-haul routes. The move comes as fewer passengers actually pay for first-class seats, instead using frequent flyer points to receive an upgrade.
United, Qantas and Lufthansa are amongst other carriers to have reduced first class, while business class has flourished including some flights that exclusively have business seats (Hong Kong Airlines). There has also been the trend to offer a premium economy service on routes, while it is expected that any first class product will offer an even more exclusive and extravagant service. WSJ listed SIA’s private suites and Emirates’ showers as ways the industry is changing its product.
The report came after new figures released by Amadeus and IdeaWorks has found airlines posted £14.2bn in ancillary revenue during 2011, up 66% over two years.
US carriers United Continental, Delta and American are amongst the biggest ancillary revenue generators, while easyJet beat Ryanair in its extra sales. As a percentage of the airline’s total revenue, Jet2.com was second globally in the table at 27.1%, with easyJet fourth; Ryanair fifth and Flybe in eighth.
“We’ve seen the industry move swiftly to grasp some clear opportunities for providing ancillary services, such as baggage fees, extra legroom and on-board catering. The next wave of innovation in ancillary services will come from those airlines which develop new products that support their brand positioning and deliver value to the traveller by meeting their individual needs and preferences,” says Holger Taubmann, SVP, distribution at Amadeus.
