Fri, 6 April 2018

Premium Economy: Now Considered by One-Third of Corporate Flyers

The steady growth in the adoption of premium economy class by travellers is still to be felt in the corporate travel market as most companies are yet to incorporate it into their company travel policies according to a report into the seating class.

The report, which was produced by 4th Dimension, Flight Centre Travel Group's (FCTG) business travel consulting division, found that despite the increased demand, product availability remains sporadic, potentially inhibiting its desired growth. This is especially evident in the corporate market, as business travel policies remain skeptical to propose premium economy.

Premium economy was pioneered by Taiwan’s EVA Air in the early 1990s and is being progressively rolled-out by airlines on medium and long-haul aircraft around the world.

Singapore Airlines Premium Economy Class. Click to enlarge.

FCM Travel Solutions’ general manager Australia Melissa Elf said, “Premium economy is perfectly placed between economy and business class with its enhanced legroom and service amenities. However, we’re seeing companies largely still choosing the more traditional options of economy class for flights under six hours and business class for overnight or over six-hour flights.”

A poll by FCM found that for one-third of clients surveyed premium economy was part of their travel policy and a further 5% were considering it.

4D’s report found that corporates most commonly fly in premium economy between Europe and North America, within North Asia and between Australia and Singapore.

Between New York and London premium economy seats were found to be 13% of total airline supply with business class fares of $8,725, premium economy $3,219 and economy $2,863.

Between Sydney and Singapore premium economy seats were 7% of supply with business class fares of $6,281, premium economy $4,187 and economy $3,996.

“Whilst containing travel program costs is important for many, an increasing number of corporate clients are becoming travel-centric in placing greater emphasis on traveller comfort for long-haul travel,” Melissa Elf said. “Premium economy is a viable option where it is available and suitable for those going straight into meetings upon arrival.”

The report said that airlines globally are at various stages of either increasing the number of premium economy seats on new routes with more available fleet or introducing the product for the first time.

Emirates Airlines is looking at possible deployment of premium economy from mid-2018, and American Airlines is expected to fit up to 104 aircraft with the cabin by the end of 2018.

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