Business class
Airlines are investing in their business class product as corporates switch back on to its benefits, says Gillian Upton
Not so long ago, the gold standard in business class was a lie-flat bed. Before that, airlines were competing on IFE. Change is in the nature of the beast and the noise has been around forward-facing seats and direct aisle access over the last few years. Today, however, the buzz is all about privacy and it has become the new benchmark.
Not surprisingly, it’s the Middle Eastern carriers who have set the bar high in this area, epitomised by Qatar Airlines’ Qsuite Quad. It comprises pairs of aft and forwardfacing seats, which create a quad-seating layout in the centre seats when passengers slide back the moveable IFE display panels.
The quad is ideal for meetings and families travelling together and there are six quads on the A350-1000 aircraft. These suites with doors also offer ambient mood lighting, lie-flat beds, generous storage space, an all-access power port, an amenity kit designed by two luxury Italian brands, a turndown service with pillows, mattress and duvet, plus sleepwear and slippers from The White Company; and 4,000 entertainment options on its IFE system.
Qatar says it is in “a class of its own” and is “a new way to fly” although Delta is one non-gulf carrier that has created something similar. Delta’s One Suite gives every passenger their own private suite with a sliding door, plus extra storage room and larger entertainment screens. It is currently available on flights between Amsterdam and Detroit. “Privacy is the top priority in business class these days and Delta One Suite really does set us apart,” says Nadia Clinton, Delta’s Country Manager UK & Ireland. “This takes business class to a new level.” There is also added privacy from a herringbone configuration on the A330s Delta recently introduced on some of its routes from Heathrow.
Prepare for take off At the other end of the scale is low-cost carrier Eurowings with its own version of business class for long haul. Yes, there will be a lie-flat bed on its Airbus A330 aircraft, marketed as an improved Bizclass, but none of the other frills associated with business class. Those airlines that haven’t
followed suit with a suite or door, yet, say that a cabin configuration offering direct aisle access affords sufficient privacy. They also stress that it’s not all about the hardware – the service elements and soft product are equally important and this is where they differentiate themselves from the competition.
One such airline is Singapore Airlines. “We experimented with privacy screens and they’re quite claustrophobic,” says Sheldon Hee, General Manager UK & Ireland. “Our fibre glass shell provides the same privacy but without a door or screen. Our customer surveys say that privacy is important but equally, they want useable space, to stow cabin baggage and to have devices within easy reach, and be able to control lighting.”
SIA reckons it has ticked all those boxes, including a bigger bi-fold table, so it’s easy to work on a laptop, and ambient lighting.
“Beyond that, it’s about service as the hardware alone doesn’t make the ultimate long-haul flight experience. It’s just as important to provide fine dining, duvets, connectivity, amenity kits and IFE,” says Hee.
“Those airlines pushing the boundaries are from the Gulf but I think we’ve found the right combination of space and service. We all deal with the same aircraft so it comes down to the design of the cabin. We’ve prioritised personal space.”
Tom Lattig, Managing Director EMEA Sales at American Airlines, has a similar view. “Privacy screens and suites are out there in the market but the jury’s still out on that. Our gold standard is a lie-flat bed, aisle access and faster wifi.”
Another carrier selling the soft benefits is United Airlines, whose Polaris product first appeared in the shape of enhanced dining and onboard amenities such as Saks Fifth Avenue bedding. Roll-out of the highly anticipated new seat is now gathering pace.
Virgin Atlantic has both 1-2-1 and 1-1-1 cabin configurations – so direct aisle access for all – and the ability to make and receive calls, to watch or listen to personal content on a smartphone or tablet, and claims to have the biggest bed at 79.5 inches. It’s also big on soft options: a private bar, bedding, duvets, sleeper suits, mood lighting and ice creams during movies, for example.
New world order
South African Airways has introduced a new A330-300 on the Johannesburg to London route with a new business class product offering passengers their own ‘living space’. A staggered 1-2-1 cabin configuration offers forward facing lie-flat seats and direct access to the aisle.
Meanwhile, Japanese carrier ANA will be taking delivery of three Airbus A380 aircraft, which are expected to enter service in spring 2019. These will comprise 56 business class seats, each with aisle access, an 18-inch monitor, wide table and side table and two USB outlets. They will be in a staggered 1-2-1 configuration on the upper deck of the aircraft.
All eyes are on British Airways to see which way it will go when it unveils its new Club World product next year. Will the airline follow the lead of the Gulf carriers and add privacy for premium customers?
The hardware alone doesn’t make the ultimate long-haul flight experience. It’s just as important to provide fine dining, connectivity, duvets, amenity kits and IFE”
Sarah Klatt-walsh, Head of Product, British Airways, is tight-lipped on the subject, unsurprisingly. “From 2019, we’ll be introducing a new seat in our Club World cabin which will give customers direct aisle access, and we’ll be revealing more details on this at a later date,” she says.
What she is willing to reveal though, are a range of enhancements in the ‘soft‘ business class product, specifically with a new dining and sleep service. The White Company, which already provides bedding and amenity kits in business class, is creating a bespoke extra soft, large pillow and white cotton pillowcase “to enhance customers’ comfort” while a new restaurantstyle dining experience will offer freshly prepared starters and desserts from a display trolley. The last element is the rollout of wifi to 90% of its long-haul fleet by the end 2019.
American Airlines is also enhancing the experience, specifically the food offering, with partnerships with various prominent chefs to offer local cuisine per route, and a partnership with a Master of Wine to do the same, so that on La-sydney flights, for example, there will be more Australian wines, on Auckland routes more New Zealand wines, on Tokyo routes a Japanese chef to provide an authentic taste of food in that region, and so on.
Fancy lobster thermidor? SIA has 'Book to Cook', a special menu from which to order 48 hours before flying. Air Canada is offering cocktails, espresso and cappuccino, Laurent-perrier Champagne and enhanced menu from chefs David Hawksworth and Vikram Vij in its new Signature Class.
Aeromexico’s updated version of Rockwell Collin’s MIQ business class seat features a number of design enhancement which will be installed on the airline’s fleet of Boeing 737 MAX aircraft. A number of functional elements of the seat can be switched out to create a new appearance. This includes the headrest shell holding the new ‘IFE zone’, the fixed magazine pocket and soft pockets on the back. It also features a larger tray table and added a tablet holder, taking into consideration how passengers may want to use the surface.
What remains unchanged is the size of the cabin. It is the economy cabin which is shrinking to make room for the everpopular premium economy seats. “There is more movement from economy to premium economy than downtrading from business class,” says Americanʼs Lattig.
Of course, the business class product 40,000ft up is only half the story. The service kicks off on ground, with chauffeur drive limo to/from the airport, dedicated check -in, fast track security, reliable wifi, a departure lounge offering restaurant quality dining and somewhere quiet to work, and sometimes an arrivals lounge too. Air Canada has gone one step further with a BMW service to whisk premium passengers between domestic and international legs at Toronto Pearson airport.
Adding up the extras
Travel managers should check out these on-the-ground facilities as what they’re interested in is total trip cost. A free limo, for example, can be critical.
Americanʼs arrivals lounge at Heathrow for Us-originating passengers has a spa-like facility of 29 showers, food by high-end caterer Rhubarb and a conference room. Virgin Atlantic’s – called Virgin Revivals – at Heathrow has 18 shower rooms, a valet cleaning service, bar and lounge, a business area with free phone calls, and access to internet and email.
Lessening traveller friction at the airport
Travel managers will check on-the-ground facilities as what they're interested in is total trip cost. A free limo, for example, can be critical”
is Virgin, for example, with a dedicated security channel which helps passengers speed from limo to the Upper Class Wing at Heathrow in under ten minutes.
Innovation is coming from Etihad Airways on the ground, meanwhile, with a trial of Skylights Aero virtual reality entertainment technology at its lounge at its hub in Abu Dhabi’s T3. The 2D and 3D headsets offer a cinematic experience of six hours’ uninterrupted entertainment and a more personalised service.
Routes manoeuvre
If passengers can tear themselves away from the distractions in the departure lounge at Heathrow to catch their flight, they are more than likely flying to JFK, Dubai, Los Angeles, Singapore, Hong Kong, Chicago and San Francisco than anywhere else, according to statistics from OAG. These are the top seven long-haul destinations from Heathrow, with most showing yearon-year increases in capacity comparing summer 2018 over summer 2017.
Singapore will see the biggest hike in number of seats, at 23%, followed by Chicago at 11.6%, Los Angeles at 9.3% and JFK at 2.5%. Of the big seven, Dubai seat numbers will fall, by a massive 20.5%.
Looking at the number of business class seats by UK airport, Stansted is offering 27.7% more this summer over last, followed by Derry with 20.7%, Gatwick with an 18.8% increase and London City with 14.1% more. Heathrow will drop by 0.7%.
OAG figures show that it’s the low-cost long-haul and Asian carriers who are adding the most capacity, topped by Norwegian with a massive increase of 211.3% this year over last (justifying IAG'S 4.61% minority stake in the airline), and no-one comes close: Eurowings is 85.3%, Japan Airlines 77.6%, Brussels Airlines 68.4%, Icelandair 62.8% and Hainan Airlines up 58.7%.
Business benefits
Whether it has privacy screens or not, the business class product is as popular as ever and is being included in employee benefits packages to help boost staff retention.
“Most common is to specify business class both ways on flights of five hours or more,” says Gavin Mossop, Supplier Relations Manager at BCD. The Asian routes are too long to mix classes but on some UK-US routes, corporates mix premium economy for the daylight outbound leg and business class for the red eye return.
Short-haul business class allowance has all but disappeared. “Short-haul and medium haul is economy class now,” says Olivier Benoit, Global Air Practice Leader at Advito, although he has had some clients asking them to evaluate moving from economy to premium economy.
It appears that companies in the IT field in particular are meanest to their employees, with a largely main cabin travel policy for long-haul. One has to wonder what staff churn is like on average at these
companies and how they absorb what must be high staff recruitment costs.
Industry verticals that see travelling for business very differently come as no surprise. “It’s important that those in insurance, pharma, finance and investment verticals have a nice travel experience as they drive their company sales,” says Americanʼs Lattig. And they can often bill the cost back to a customer.
Who can book business class is still synonymous with status. “It’s available for travellers of a specific grade, or for client meetings but not internal meetings,” says Advito’s Benoit. But he advises that the more rules and exceptions companies add the more difficult it is for travellers to understand, follow and keep to. “Travel policies are never black and white,” he says.
Caveat-laden policies may be a reflection of the hard-won deals corporates extract from airlines, who still appear to hold the cards around the negotiating table.
The American/ba/finnair/iberia group is offering network-wide discounts rather than route deals, which can mean corporates are getting discounts in the wrong places.
BCD’S Mossop says airlines are more ruthless than they used to be. “Targets have to be met and checks done to ensure the deal is on track,” he says. Advito’s Benoit agrees: ”Airlines have high load factors so it’s more difficult to negotiate today.”
As usual, it is the big boys who have the best chance. “Most airlines offer route deals and the biting point is £100,000 upwards,” says Mossop. Some airlines may negotiate on smaller annual spends, say from £50,000, if there is a chance to leverage more volume currently going to a competitor airline.
“What airlines want is big volumes on point to point destinations,” he says. “Airlines look at the size of the opportunity and how many routes,” adds CTM’S Head of Supplier Relations, Penny Munn.
Added-value items such as FFP upgrades, lounge access and free wifi are part of the negotiation, as long as both parties can agree on what each of the items are worth. “The challenge is to estimate the value realistically,” says Benoit. “They say lounge access is worth $100, but why not $50?”
Loyalty schemes such as BA’S Onbusiness, KLM’S Bluebiz, SIA’S High Flyer Programme, Etihad’s Businessconnect and Emirates’ Business Rewards help SMES stretch their budgets by using points for upgrades.
Route deals only take a percentage of the highest fare – on intercontinental routes it’s around 15% on average – which means that lowest logical fare on the day can often undercut a corporate deal, as long as the restrictions are taken into account.
Most TMCS use a bunch of different metrics to check how route deals are performing and will switch to ensure that they get the best fare. BCD calls it Dynamic Performance Management.
There is a groundswell of opinion from corporates questioning whether route deal negotiations are worth the effort, particularly now that fares are being broken down into basic fares and all the additional ancillaries. “Corporates are starting to ask, ‘Forget about the fare discount, how about including seat assignment and baggage?ʼ“says Mossop.
However, route deals score in one very important area. “Corporates like route deals for the busy times; it’s a back-up for them,” says CTMʼS Munn.
And cutting across these dynamics, one thing still holds true – the basic rule of supply and demand. There is no leverage on monopoly routes but all to play for on competitive routes like London-jfk.
Route deals only take a percentage of the highest fare, which means that lowest logical fare on the day can often undercut a corporate deal”