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Passengers exit the plane through the business class seating area on an American Airlines flight, London Heathrow Airport, August 14, 2018.
Jeff Greenberg | Universal Image Group | Getty Images
Cheap seats are no longer enough for airline passengers.
Since the pandemic, travelers have shown airlines that they are willing to pay to sit in the relatively spacious front of the cabin. This means many of the seats are already full, making it harder for frequent flyers to get free upgrades at the front of the plane.
And the rows of frequent travelers with elite status are increasing all the way from the airport lounge in the first full boarding group, which means more competition for those seats. Expect even more crowds during the year-end holiday period, which airlines predict will set another record.
Even during the off season in early 2025, executives have forecast strong demand. US airline capacity in the first quarter will increase by about 1% from a year earlier, according to aviation data firm Cirium.
“We’re probably seeing our best unit revenue on the transatlantic (routes), for example, in the dead of winter,” he said. Delta Air Lines President Glen Hauenstein at an investor day in November.
The price difference between first class and coach varies, of course, depending on distance, demand, time of year and even time of day. For example, an activated return ticket United Airlines from its hub in Newark, New Jersey, to Los Angeles International Airport during the first week of February was $347 in standard economy and $1,791 in the carrier’s Polaris cabin, which has reclining seats, but no access to the international business class lounge. .
American AirlinesThe nonstop flight from New York to Paris over Easter 2025 cost $1,104 in coach and $3,038 in the airline’s flagship Business Class.
View from the Delta Sky Club at Los Angeles International Airport, September 2, 2022.
AaronP | Bauer-Griffin | GC Images | Getty Images
Billions of dollars in revenue that keep airlines afloat hang on the balance sheet. Airline loyalty programs are a cash cow, and striking the right balance between perks like free upgrades and cash back is key.
In recent years, airlines have changed the requirements for status, rewarding spend rather than just distance flown. They have also increased the amount flyers have to spend to be anointed with elite status. Next year, customers will have to spend more to United to gain status. On Thursday, however, American said it would maintain the same requirements for the next earnings year, which begins in March.
From gifts to pay
About 15 years ago, travelers were paying for seats in just 12% of Delta’s domestic first class. Now, that’s closer to 75% and rising, Hauenstein told investors last month.
“We gave them away based on a frequent flyer system,” Hauenstein said of the first-class seats in 2010 and earlier. “The incentive was to spend as little as possible, fly as long as possible and upgrade as often as possible. This led to a position where our most valued products were the biggest loss leaders.”
It has now been invested for Delta, he said, as more money will go to the front of the cabin. The carrier generates 43% of its revenue from mainline economy cabin tickets, down from a 60% share in 2010.
The trend extends across the industry, from Delta, the most profitable carrier, to discounters such as Frontier Airlineswhich adds more space first class seats at the helm of its Airbus fleet by 2025. On Wednesday, JetBlue Airways he said he would enter two or three rows of national business class on aircraft that do not have their highest-level Mint business class with floor seating, dubbing it “Junior Mint”.
A day before Alaska Airlines he announced that he would retrofit some of its planes with premium seats as it prepares new international flights after acquiring Hawaiian Airlines earlier this year, with revenue from higher-priced seats beating standard economy.
“You see the Airbus 330s and Boeing 787s are under-indexed in business class and they don’t have an international premium economy cabin,” Andrew Harrison, Alaska’s chief commercial officer, said at an investor day in New York on Tuesday. “So hopefully beyond 2027, you’ll see our premium mix continue to grow.”
A Delta Sky Club passenger lounge inside Hartsfield-Jackson Atlanta International Airport on September 5, 2019.
Jeff Greenberg | Universal Image Group | Getty Images
Bigger business
Airlines are now racing to add larger international business class or first class sections with bigger screens and closing doors on flat seats.
“We’ve seen more paid demand for the premium cabin than ever before the pandemic,” said Scott Chandler, vice president of revenue management at American Airlines. “More people want the premium cabin experience.”
Chandler said American has worked in recent years to make it easier for customers to purchase more expensive cabins, with post-purchase options to upgrade to first class or other cabins such as premium economy.
american is reconditioning some of its longer-range planes to include more premium seats, like other carriers, are dropping first class entirely on some to add larger international business class cabins that will have new seats with sliding doors. Delta and United have it too increase your premium offers to keep up with customers who want to pay for the more expensive seats.
“They’re doing everything they can to get you to pay for their premium products. That’s absolutely what they should be doing,” said Henry Harteveldt, founder of travel consultancy Atmosphere Research Group. Customers don’t buy a store-brand item in a department store and then expect “the salesperson (to) call this product and give you a designer bag for free.”
Southwest Airlines has taken its own approach. In 2026, it plans to fly with several rows of seats with extra legroomadapting its standard coach-only cabins that it has flown for more than half a century and eliminating open seats.
CEO Bob Jordan said it’s partly a “generational change.”
“What we’re seeing is that our younger customers are looking for a little more premium,” he said in an interview this week. “A lot of it is a change in mindset, a willingness to spend more on travel and less on other things.
But the airline decided to keep the number of seats on its planes largely the same and not add a first class like other carriers, after surveying customers and weighing the cost of losing space for more seats on board.
For the first class, Jordan said, “You’re talking about ovens, you’re talking about meals, you’re talking about catering. It’s a huge capital investment and a huge jump.”
“But never say never,” he said.
