Hot Seats
Global Traveler|Class Act 2021
Premium economy soars in popularity among returning business and leisure travelers.
IRENE RAWLINGS

The middle cabin, tucked in between business class and economy, has grabbed the attention of both business and leisure travelers. It also proves a big moneymaker for the airlines. The cost per ticket can be as much as 80 percent more than an economy seat but still substantially less than business class. Some airlines call it Premium Plus, some call it Premium Select, and others call it Elite Class. Whatever the name, most major airlines offer this class of service on international and many long-haul domestic flights.

For many years, airlines relied on big-spending business travelers to fill the high-priced, front-of-the-plane seats. Now those customers are traveling less frequently and on greatly reduced expense accounts. According to Deloitte Insights, it could take another two or three years for business travel to recover, and with the popularity and effectiveness of virtual meetings, it may take even longer to reach pre-pandemic levels. So, for now, many business travelers are booking into premium economy.

After sheltering at home for 18 to 24 months, leisure travelers don’t want to spend their first post-COVID flights sitting cheek to jowl with total strangers in a packed economy class … and they don’t have to. Households around the world tucked away more than $5.4 trillion in savings since the coronavirus pandemic began (equal to 6 percent of global gross domestic product), according to Moody’s Analytics. This is money that would normally have been spent on travel, entertainment, clothes (and dry cleaning), haircuts and color, gym memberships and eating out in restaurants. As the world begins to open up, many people can now indulge in the affordable luxury premium economy represents — wider seats, cozy blankets, soft cotton pillows and meals served on real china.

As the coronavirus spread worldwide and countries closed their borders, air travel took a big hit. By April 2020 the average number of passengers had fallen 92 percent from 2019 levels. Industry losses topped $370 billion worldwide; North American carriers lost $88 billion.

The International Air Transport Association, with 290 member airlines, called 2020 the worst on record financially but went on to say prospects for a stronger bottom line are looking up as more travelers return to the skies. Providing there is not another and more damaging wave of COVID-19, IATA predicts the worst of the air travel collapse is now in the past.

Continue reading your story on the app

Continue reading your story in the magazine