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Premium Takes Off with AA

American Airlines Premium Economy

Premium Economy is the new Business Class. Business Class is the new First Class. Business jets are the new First Class.

One of the revenue-increasing concepts many airlines are starting to recognise, is that people will pay more, as long as they get something tangible in return. The practice of "unbundling" fares (that is, taking things out of your fare, which were previously included) and making out that somehow you are deriving a benefit, invariably accompanied by something like "...you told us..." may make great opportunities for airlines to announce that any given airline has made a small fortune out of "ancillary charges", whilst ignoring that actual fares have plummeted, but it does little to give any person traveling the feeling that they have actually derived any real personal benefit.

Getting out of the economy cabin has always been a prohibitive cost for many, unless someone else is paying, of course. A fare from Dallas Fort Worth (DFW) to Paris (CDG) on American Airlines will cost you about £1000 in economy (coach) and £3,500 in business class (depending on availability). £2,500 is a lot to pay to move about 10 yards further forward, for a bed; and that only for about 9 and a bit hours out of your life.

Business Class - Pam Am - 1980-ish

The trick, therefore, is to make something that gives the traveler a real benefit which is attainable from a cost perspective. True, the Premium cabin may not benefit the backpacker though for many business types who are a little below the salt in a firms' pecking order (if you will excuse mixed metaphors) Premium Economy fits the bill. To understand Premium Economy, think 1980's business class cradle seats (see picture, left)

Premium Economy, however, must be "proper" premium economy. By that I mean that it must have various factors going for it, the least of which are:

  • It must be bookable from the start. British Airways and Virgin have Premium listed as a separate booking class and the class has its own fare structure. Hiving off a few rows from the front of the Coach cabin, giving them a fancy name and worst, making it pot luck if you can get one of those seats, does not cut it.

  • It must have a tangible benefit for the traveler. There must be an increase in personal comfort that is real. This needs to be in terms of seat size, seat facilities, meal service, inclusion of hold bags, dedicated check-in facilities, seat reservations and of course, a different cabin. (Does not have to be all of these things, though most airlines do include all or most)

  • The cost must be attainable. That is, Premium needs to be offered at a fare that a customer can see as good value. This costing aspect is something of an art-form though by clever use of promotional fare costing and such, most airlines, especially British Airways, do get it right

That American Airlines have introduced a Premium Economy seat and cabin on their new 787-9 routes is good news - I always thought that the "Main Cabin Extra" concept was barking up the wrong tree. Hopefully, these seats will be rolled out on other routes as time and circumstances permit. 2-3-2 seating and a 38 inch seat pitch are truly traveler-orientated benefits; you still only get one hold bag - but at least, AA are going (even though progress can sometimes feel like mating elephants) in the right direction.

Cost wise, American Airlines have issued fares but I have not seen any of the proposed flights with "W" class seat booking availability. (W Class is the mainstream designation for travel agents and airlines of a Premium Economy Seat - discounted classes are usually E, T, S and K). Sabre does show fares, though - DFW to CDG (Paris) for example, looks like you would need to spend around £500 more on a return fare, to move out of the economy cabin (there are a lot of caveats on that last statement, by the way). Right now, if American Airlines get their Premium Economy pricing right, I would say that they are on a real winner.

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