• Wed. Oct 5th, 2022

Is first-class history in the airline industry?

ByKimberly A. Brochu

Jan 25, 2022

is-a-first-class-story-of-the-airline-industry

SYDNEY, AUSTRALIA – MARCH 17: Qantas aircraft on the runway at Sydney Airport on March 17, 2020 in Sydney, Australia. Qantas and Jetstar will cancel almost all international flights and reduce domestic flights until May as travel demand plummets due to the COVID-19 pandemic. The Australian government introduced strict border security measures on Monday, requiring all overseas arrivals to self-isolate for 14 days in a bid to stem the spread of the coronavirus. The number of confirmed cases of COVID-19 is now 379 in Australia, with five deaths. (Photo by James D. Morgan/Getty Images)

Like the superior suite at a Four Seasons hotel, first-class cabins look fabulous, but the seats remain out of reach for most travelers. Cabins are largely the preserve of Hollywood types who can’t afford to steal private, high-end hotspots from frequent travelers. With such a small clientele, are the days of the first class cabin numbered?

Expensive aviation real estate that few can afford

China and the United States are two of the largest domestic air markets still offering first-class seating on multiple carriers. But most passengers regard cabin products as domestic business class at best.

American Airlines remains the only major US carrier to maintain a long-haul first-class cabin product – and even then only on select aircraft. But American Airlines’ first-class long-haul product is also widely seen as uncompetitive.

“American Airlines First Class doesn’t stand a chance against the best airlines in the world,” said Zach Griff of The Points Guy recently. “My recommendation? As long as you don’t spend real money on it, you’ll enjoy AA first. But I wouldn’t pay mileage for it. I would never pay cash for the ticket either.”

And that’s the catch for most airlines. First class takes up a lot of aircraft real estate, and while everyone wants to fly first class, very few are willing to pay anywhere near full retail fare for a ticket. This calls into question the economics of offering a first class cabin.


is-a-first-class-story-of-the-airline-industry

First class cabins take up a lot of space on planes and few passengers are willing to pay the premium to travel there. Photo: British Airways

Is first class just about better peanut quality?

Speaking at a recent CAPA Live event, IAG Group CEO Luis Gallego said the number of premium cabin seats in the group will decrease as they retire older aircraft. But he argues that’s not necessarily a bad thing.

“The profitability that we have in the premium economy class, sometimes it is higher than the profitability that we can have in the more premium classes,” he said.

“First class in most markets, unless you’re in the US or China where you get a higher quality peanut in the UK and a slightly denser noodle in China, first class has deteriorated, that’s ancient history,” says John Grant of Midas Aviation.


Or, you could say, business class has improved so much that it makes the average first class product redundant. Several airlines are offering a superb long-haul business class seat – Polaris on United Airlines, Delta One Suites, the new Club Suite seats on British Airways, Q Suites in Qatar and ANA’s “The Room” business class seat in are good examples.

Most people would thank their lucky stars if they could park their backs in such seats. Very few airlines can or do offer a better product (Singapore Airlines First Class Suites and Etihad First Class Long Haul products are notable exceptions). Even fewer potential passengers are willing to pay the premium to upgrade to this better product.

The high standard of many long-haul business class cabins potentially jeopardizes the future of first class cabins. But first class cabins are often more than economical. First class cabins are important to an airline’s brand and image.


is-a-first-class-story-of-the-airline-industry

Etihad remains one of the few airlines to offer a clearly differentiated first class product. Photo: Etihad

Brand value in a first class product for many airlines

This Four Seasons suite is unaffordable for most people, but the brand’s tasty imagery might entice average bettors to pony up for a room in the house. Although most Emirates passengers do not travel in premium cabins, most Emirates advertisements feature premium cabin products. Marketers call it the halo effect, and it’s worth a lot of money for long-haul airlines.

Whether first class is history, as John Grant argues, is debatable. But first class is significantly less common than it once was. A likely future outcome is that some airlines will retain first class as a branded product on a small subsection of their fleet.

First class cabins may not bring in a lot of money from ticket revenue given the space they take up, but they are important to branding, and good branding is worth a premium in l airline industry. This alone could ensure the survival of the first class in the airline industry for some time to come.


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