Airline traffic is bouncing back, but the market is predicted to change and some pundits are predicting the demise of first class travel. Steve Bridgewater looks at the possible scenarios and how airlines can adapt to survive

[This article first appeared in the November/ December 2021 issue of Airline Cabin Management]

Two years ago, nobody could have predicted a global pandemic would devastate the airline industry and reduce its 2020 revenue to $328 billion. That’s around 40% of the previous year’s and roughly the same as in 2000. Economists and industry pundits are predicting the sector to be smaller for years to come, with some projecting airline traffic won’t return to 2019 levels until 2024.

That said, travellers are showing increased confidence and passenger figures are on the rise. However, the pandemic seems to have changed consumer behaviour, perhaps irrevocably. Business travel is predicted to eventually bounce back, although travel logistics experts McKinsey & Company estimate “it will only likely recover to around 80% of pre-pandemic levels by 2024”. 

The company explains that “leisure trips or visits to friends and relatives tended to rebound first following 9/11 and the global financial crisis. Business trips took four years to return to pre-crisis levels after 9/11 but they also had not recovered to pre-financial-crisis levels as Covid-19 broke out. Therefore, we expect that, as the pandemic subsides, the rise in leisure trips will outpace the recovery of business travel”.

First class was disappearing from airline cabins even before the pandemic, but the enforced shutdown has speeded its fall from favour.  Across the long-haul market, the majority of well-known carriers have been substantially reducing the number of first class seats on board their aircraft for more than a decade. Take British Airways as an example. In 2008, the UK’s national carrier offered 560,000 first class seats across its fleet, yet by 2018 this had fallen by almost 100,000 or around 18%. 

In the USA, the decline has been even more pronounced with United reducing its offering from 380,000 to 180,000 over the past decade and Delta halving its first class seats from 400,000 to 200,000 over the same period. Other airlines have scrapped first class completely and some, including British Airways, have eliminated it when ordering new aircraft.

On average, first and business class travellers make up 12% of passengers but generate around 40% of the revenue. So why don’t passengers want the first class experience anymore? The one thing for sure is that it’s not because the standards are falling. In fact, both the facilities and service offered to passengers have improved dramatically over the last decade. Likewise, the number of extremely wealthy individuals continues to rise with the number of billionaires alone doubling over the last decade. Yet the demand and capacity for first class travel has reduced substantially and some analysts are predicting that it could die out completely within a decade.

Premium Offerings

Some within the industry feel the fall in demand is not related to Covid, the financial crisis or a desire to travel less for the sake of the planet. They feel the phenomenon has been caused by the industry itself, with the push to improve premium and business class offerings effectively narrowing the gap between these and first class. Passengers who value a competitively priced fare now have more options. 

With low cost carriers catering for the cheaper end of the market, airlines such as British Airways have concentrated on the premium and business class sectors. In 2000, it was the first to add lie-flat beds to the business class cabin and, with most of its competitors following suit, this soon devalued the first class offering. When employees could sleep in business class, the number of CFOs who would sign off the cost of first class travel plummeted. 

Today, the dying breed of first class cabins serve only two purposes. Firstly, they provide an upgrade option for loyal business class customers; secondly they provide a marketing and branding opportunity to promote the entire airline. Most of the airlines which still offer a first class long-haul service come from Asia, specifically Japan and China. Thai Airways and Garuda also offer the facility – although the latter only has eight first class seats in its entire fleet.

In Europe, the only airlines to retain a true first class offering are British Airways, Air France and Swiss, while in the Middle East only Emirates, Oman Air and Saudia retain first class cabins. 

In fact, Dubai-based Emirates bucked the trend, doubling its first class seats to 600,000 between 2018 and 2020. The region’s location at the hub with virtually every market in the world means that around 90% of those seats are occupied by passengers who have paid for them, rather than being upgraded. They value the privacy it offers and the flexibility and prestige it exudes.

Superbusiness

The pandemic has seen airlines shift from double-decker jets like the Boeing 747 and Airbus A380 to smaller, more fuel-efficient aircraft but, even with less space, the prospect of filling first class seats is daunting. With executives trading first for business class and millionaires opting for private jets, the days of utmost luxury aboard commercial airlines seem numbered. Of course, many carriers are dependent on business travellers so what can be done to tempt them back aboard?

Some industry experts are predicting a growth in the number of airlines offering ‘superbusiness’ mini-suites. These are more spacious than regular business class seats and passengers will have a fully lay flat seat/bed, an improved business class service and, crucially, closing doors for privacy. These booths will offer the business traveller a better environment regardless of whether they want to work, sleep or just relax.

In 2007, Singapore Airlines was the first carrier to introduce the mini-suites (aboard its Airbus A380 fleet) but other airlines followed suit. However, the idea was reserved for first class passengers until 2017 when Qatar Airways launched its Qsuite. A host of other airlines now offer – or are planning to offer – the superbusiness concept and Air China turned to Recaro to provide mini-suites for its recently refurbished cabins.

The concept is predicted to appeal to the business traveller who wants privacy without the cost of first class travel. Most superbusiness mini-suites have doors that go up to shoulder height as regulations call for flight attendants to be able to see passengers at all times during take-off and landing. However, Emirates’ latest first class offering has full height doors that close the passenger off from the rest of the cabin. In order to pass safety tests, the carrier had to install CCTV.

Whilst being cocooned in a doored booth will do little in reality to offer added protection from germs and viruses the privacy will doubtless provide a psychological boost and be popular with travellers who can afford it.

Reconfigure

With space to fill at the front end of the aircraft, airline bosses are setting their minds towards how best to reconfigure their airframes. Some may shift to better cater to premium-leisure passengers, such as growth of premium-economy cabins or development of business-class seats more suitable for traveling as couples or groups.

Even prior to the pandemic, aircraft manufacturer Airbus predicted that passengers’ expectations would evolve to include a focus on more “choice, flexibility and a desire for a personalised, on-demand travel experience”. The company recently opened its Customer Definition Centre (CDC) in Hamburg where airlines can use virtual reality to experiment with customisation and visualise future cabins.

In order to respond to evolving passenger needs, Airbus has also launched its Airspace Cabin Vision (ACV) 2030 programme. Among some of the key areas it is currently looking at are cabin flexibility (specifically for flexible seating and sleeping configuration) and an inflight lounge with transformable modules. According to Airbus this will “create a connected cabin ecosystem, enabling a more dynamic environment”.

As well as offering passengers more personal space, larger overhead storage bins, advanced cabin lighting and the latest generation IFE equipment, Airbus is proposing more radical changes. ACV 2030 includes family compartments where parents and children can face each other, and would offer personalised gaming systems and digital menus. The concept also proposes bunk beds for passengers wanting to take a nap as well as a gym.

Looking further ahead, ACV 2050 sees Airbus cabins being ‘zoned’ rather than split into traditional cabin classes. The company sees the interior as being divided into the ‘Vitalising Zone’ (to cater for relaxation and well-being) as well as a ‘Smart Tech Zone and an ‘Interactive Zone’.  The latter would imitate any possible social scene, meaning passengers could arrange a virtual business meeting, play a game of virtual golf or even read a bedtime story for their children back at home.

Say Goodbye to Segregation

While Airbus is planning to zone its cabins, other companies are proposing doing away with segregation completely. Traditionally, due to various classes of travel being separated within the cabin, passengers in economy rarely see the benefits and perks offered in first or business class.

However, a study conducted by a South Korean student in partnership with Adient Aerospace suggests mixing classes together could be a more efficient and profitable solution, offering airlines an opportunity to entice passengers out of the ‘cheap seats’.

The study was the brainchild of Hongik University student Sahngseok Lee and is dubbed One for All (1FA). It uses a Tetris-like concept to mix and match classes throughout the cabin to maximise seating capacity and revenue. The cabin would be on multiple levels, connected by staircases to allow better use of space and ease of passage for crew.

The 1FA system effectively interweaves the various seat classes and could see economy passengers sitting next to (and even above or below) first or business class passengers.  While the radical proposal won the Crystal Cabin Award in 2019, challenges including emergency egress regulations and the perceived downgrading of the exclusivity and privacy offered by premium offerings mean the industry is yet to see anything quite like it in practice.

However, the idea of mixing classes clearly has merit and 1FA partner Adient has teamed up with Boeing to create a modular seating platform for the 787. Hawaiian Airlines is the launch customer for the 1-2-1 outward-facing herringbone layout that takes inspiration from the 1FA ‘booth’.

Adient’s Space For All (SFA) design uses the space between the bulkhead seats and the bulkhead wall separating economy from business class to create an extended flat surface to use as a lounge seat or a common space for children and adults. With the seat armrests in the raised position, SFA provides the front row passengers with over 17 sq ft of shared flat bed space. Bulkhead row seats can also be converted into beds.

Two’s Company

Virgin Atlantic recently announced that some of its new Airbus A350-1000 airframes would be fitted out for the leisure market, serving destinations such as Barbados and Orlando. 

The reduction in need for seats in upper class created an opportunity to introduce a new onboard social space called ‘The Booth’. This is a semi-private space with lounge-style seating for two, separated by a single-leaf table and designed in collaboration with London-based design agency Factorydesign. 

While it may be true that first class service we have known for decades could be on the way out, this should not be confused with a concept that passengers no longer want a luxury offering. 

Throughout the pandemic many customers have managed without some of the luxuries they had previously come to rely on, from eating out to meeting up with friends and loved ones. 

The opulent luxury of its heyday may be a thing of the past, but for a society that has ‘gone without’ (and has disposable income) the premium offering could be in more demand than ever. With campaigners lobbying for reductions in air travel, a family may opt for one long overseas holiday every two years instead of numerous short breaks. 

In this scenario, that single trip would be far more eagerly anticipated and travellers may well feel motivated to spend extra to ensure their journey is as luxurious as they can afford. Customers will always aspire to a ‘first class’ service, no matter how it is branded.