On August 14, 2018, passengers disembarked from the business class seating area of an American Airlines flight at London Heathrow Airport.
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Cheap seats are no longer enough to satisfy airline passengers.
Since the start of the pandemic, travelers have told airlines they are willing to pay to sit at the front of the cabin, which is relatively spacious. That means many seats are already full, making it difficult for frequent flyers to get free upgrades to seats at the front of the plane.
From airport lounges to crowded first-board groups, the growing ranks of frequent flyers with elite status mean competition for those seats will be fiercer. More crowds are expected during the year-end holidays, with airlines expecting to hit new records.
Even in the off-season of early 2025, executives are predicting strong demand. According to aviation data company Cirium, American Airlines’ first-quarter capacity will increase by about 1% compared with the same period last year.
“We’ll probably see our best unit revenue on the transatlantic (route), for example, in the middle of winter,” said Delta Air Lines President Glen Hauenstein at the November investor day.
Of course, the price difference between first class and economy will vary based on distance, demand, time of year and even time of day. For example, a round-trip ticket United Airlines In the first week of February, fares from Newark, N.J., to Los Angeles International Airport were $347 for standard economy and $1,791 for Polaris cabins, which feature lie-flat seats but are not available. International business class lounge.
American AirlinesNonstop flights from New York to Paris during Easter Week 2025 cost $1,104 in economy class, and the airline’s flagship business class fare is $3,038.
A view of the Delta Sky Club at Los Angeles International Airport on September 2, 2022.
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Billions of dollars in revenue to keep the airline afloat are still up in the air. Airline loyalty programs are cash cows, and balancing perks like free upgrades with earning cash is key.
In recent years, airlines have changed the requirements for earning status, rewarding purchases rather than just distance flown. They also increased the amount the Flyers need to spend to achieve elite status. Next year, passengers will have to spend more on United to qualify for membership. On Thursday, however, American Airlines said it would keep the same requirements in place for its next profit-making year, which starts in March.
From giveaway to payment
About 15 years ago, only 12% of passengers paid for domestic first-class seats on Delta Air Lines. That’s now close to 75% and rising, Hauenstein told investors last month.
“We gave away these seats under the frequent flyer program,” Hauenstein said of the first-class seats in 2010 and earlier. “Our motivation is to spend as little money as possible, fly for as long as possible, and upgrade as often as possible. This results in our most valuable product being the largest loss leader.”
Now the situation is reversed at Delta, he said, as more money is flowing to the front of the cabin. 43% of the airline’s revenue comes from economy class tickets, down from 60% share in 2010.
The trend is sweeping across the industry, from the most profitable airline, Delta Air Lines, to companies such as Frontier AirlinesThe company will add roomier first-class seats to the front of its Airbus fleet in 2025. JetBlue Airways It said it would introduce a two- or three-row domestic business class cabin on aircraft that do not have the highest-tier Mint business class cabin with lie-flat seats, calling it “junior Mint.”
one day in advance Alaska Airlines After acquiring Hawaiian Airlines earlier this year, the airline announced it would equip some of its planes with premium seats and prepare for new international flights, with higher-priced seats bringing in more revenue than standard economy seats
“The Airbus 330 and Boeing 787 have lower business class indexes and a lack of international premium economy class,” Andrew Harrison, Alaska’s commercial chief, said at an investor day event in New York on Tuesday. “So, we expect 2027 Years from now, you’ll see our premium product portfolio continue to grow.”
Delta Sky Club passenger lounge at Hartsfield-Jackson Atlanta International Airport on September 5, 2019.
Jeff Greenberg | Universal Image Group | Getty Images
bigger business
Airlines are now racing to add first class or larger international business class cabins, complete with bigger screens and doors that close on flat-bed seats.
“We’re seeing even more paid demand for premium cabins than 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 spent the past few years making it easier for customers to purchase higher-priced cabins and, after purchase, choose to upgrade to other cabins such as first class or premium economy.
“They’re doing everything they can to entice you to buy their premium product. That’s absolutely what they should be doing,” said Henry Harteveldt, founder of Atmosphere Research Group, a travel consultancy. Customers don’t buy store brand merchandise in a department store and then expect “the salesperson will call up the product and give you a free designer bag.”
Southwest Airlines took his own approach. By 2026, the company plans to equip flights with rows of seats with extra legroom, revamp its standard cabin that has flown for more than half a century and eliminate open seats.
Chief Executive Bob Jordan said this was partly a “generational shift.”
“What we’re seeing is younger customers looking for a higher premium,” he said in an interview this week. “A lot of it is a mindset change, a willingness to spend more on travel and less on other things.
But after surveying customers and weighing the cost of losing space by adding more seats on board, the airline decided to keep the number of seats on its planes roughly similar and not add first class as other airlines have done.
Of First Class, Jordan said: “You’re talking about ovens, you’re talking about meals, you’re talking about supplies. It’s a huge capital investment and a huge leap forward.”
“But never say never,” he said.
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