AviationWith leisure demand picking much faster than business travel, airlines are putting money — and adding seats — where the demand is.

Premium economy is now the hottest seat for airlines

Emirates is among the many airlines opting for premium economy seating to drive revenue.
Emirates is among the many airlines opting for premium economy seating to drive revenue.

A new report has urged the airline industry to move past being a “deer in the headlights” and accept that the Covid pandemic has changed the business of travel.

The report, 'Pandemic, Technology, and the Environment Are Changing Airline Business Travel', sponsored by global travel tech provider CarTrawler, focuses on the new category of premium leisure travel as a market offering tremendous potential to fill the business travel gaps that may persist.

Report author, Jay Sorensen of IdeaWorksCompany, says that the recovery of business travel “is complex and largely unwritten”.

“Online meeting technology continues to march ahead, company employees are still working from home, corporations are setting carbon reductions tied to business travel, and the airline industry still struggles to find firmer footing.

“The challenge for the airline industry is to emphasise those activities for which ‘being there’ offers advantages far beyond the digital alternative,” the report notes.

The report suggests many of the habits formed by travellers during the pandemic will be enduring and, in response, network airlines will focus on leisure travel and business will be more a la carte and premium economy will grow.

Aileen McCormack, chief commercial officer at CarTrawler, said, “While both business and consumer travel are rebounding strongly in 2022, it’s clear that the pandemic will impact the industry for some time to come - and many of the advancements made then will become permanent.

“This push toward digitisation and technological improvement will help the aviation industry in the long run, especially if airlines are willing to make the changes and investment needed to keep up with consumer trends."

The 14-page report offers the following key findings:

- 65% of business travel is customer facing, with 25% linked to “sales and securing clients” alone.

- Delta’s president believes it has identified high-end leisure travellers as a “new class of customer” with early returns that are “phenomenal, far above expectations”.

- Lufthansa’s financial margin provided by premium economy is 39% higher per square metre of cabin configuration compared to business class.

- Global airlines are adding premium economy seats in anticipation of industry changes: British Airways, Delta, Emirates, Lufthansa, and Singapore Airlines.

- Global corporations, such as Bain, Deloitte, PwC, and Zurich Insurance, seek to reduce by 25% to 70% the carbon footprint of their business travel.

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