Airlines Are Pivoting to First-Class

Photo credit: Joakim Honkasalo/Unsplash

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People aren’t just flying more, they’re flying lux.

Airlines also love it, even if they can’t quite keep up. Now, Delta and United are working overtime to retrofit their aircraft to accommodate increased demand for premium, first-class tickets, according to CNBC. It’s a reminder: In the world of luxury, there’s no such thing as a recession.

Leg Room and Board

Gone are the days of cramming in as many rows of seats as possible, often at the expense of generally accepted notions of personal space. Airlines are tapping the same taste for high-end goods that sent luxury stalwart LVMH’s market cap to heights typically reserved for Big Tech.

For consumers, the increased demand is likely due at least in part to social-distancing PTSD — nobody wants a middle seat between two sniffling row-mates. For airlines, like luxury goods makers, the margins are just too sweet to pass up. That’s been doubly true this summer, as airfare has fallen precipitously; prices dropped nearly 19% in the year through June, according to a recent New York Times report. But premium seats can be sold for as much as six times standard seating, and airlines are seeing a steady rise in demand:

  • In 2009, just 9% of Delta seats sold were premium, a company spokesperson told CNBC. But by 2019, that soared to 28%, and the company projects premium seats to account for 30% of ticket sales next year. The payout is outsized — Delta expects premium tickets to account for 35% of its $19 billion in revenue this year.
  • American Airlines, meanwhile, told CNBC that it plans to increase premium seating on long-haul craft by over 45% by 2026. In its first-quarter earnings, the company said premium seat revenue was up 20% versus pre-pandemic levels.

Your Vacation Starts Now: The increased demand has sparked a mile-high race for luxurious renovations. American is scrapping first-class seats on many of its long-haul Boeing 777 crafts to feature as many as 70 “suites” with lie-flat seating and sliding doors for privacy. German airline Lufthansa has embarked on a ​​€2.5 billion journey to rehaul its premium options. Underlying the entire trend: repeat business. “Once you start flying in those cabins, you tend not to go back,” Delta President Glen Hauenstein recently told the Financial Times. That’s either a selling point or a consumer warning, depending on the size of your bank account.