By Danny Lee
(Bloomberg) — Airlines are revitalizing first class as affluent customers enjoy travel again, taking luxury in the skies to new levels.
First class cabins increasingly resemble small hotel rooms, with sofas, double beds, TVs, desks, wardrobes, minibars and, in some cases, walk-in showers. The more creative the better. You can even book a chef.
The investments come despite slowing economic growth and rising living costs, with airlines betting that enough people will be willing to spend money on a flight in style after being grounded and unable to travel due to Covid.
“Private travelers in particular continue to book flights in business or even first class,” said Carsten Spohr, CEO of Deutsche Lufthansa AG, during a conference call in March. “This year is the first year that my entire team has told me: ‘Spohr, we need to expand first class,'” he told investors last week.
The German airline is investing $2.7 billion over two years to modernize its long-haul aircraft as part of a program called Lufthansa Allegris. Qantas Airways Ltd. is also unveiling a new, luxurious first class, an area that is usually out of reach – most people only get a furtive glance at it as they shuffle polonaise-style toward the plane’s emergency exit doors.
Why now?
The International Air Transport Association estimates that airlines have suffered losses of around $200 billion over the past three years due to the unprecedented devastation caused by Covid-19. They urgently need to recoup some of those losses, and first class has become a potential goldmine. According to IATA, demand for premium travel, which includes business class, is back at 86% of 2019 levels, while overall demand for air travel, including economy class, is at 81%.
Even though first class flights are more than ten times more expensive than standard economy class seats, demand is there – either for cash bookings or for the rare opportunity to redeem miles earned with credit cards during the pandemic.
“There is still plenty of excess savings,” said David Mann, chief Asia economist at Mastercard Inc. “It doesn’t look like the willingness and ability to spend is going away anytime soon, which most likely explains why the airlines are making these announcements.”
Cathay Pacific Airways Ltd. is also planning to upgrade its first class. Demand is already high for the current top-class seats offered on one of its flights between Hong Kong and London. The cabins feature “one of the widest fully flat beds in the sky,” a variety of soft pillows and pillow spray, according to the airline’s website.
Of course, first class travelers also get access to the best airport lounges. And pajamas.
What else is offered?
Qantas and Lufthansa have unveiled new first-class cabins that can be completely separated with doors, joining pioneers Singapore Airlines Ltd., Emirates and Etihad Airways PJSC in converting seats into suites.
Seats in the new Lufthansa compartments can be heated or cooled, and there are wardrobes for extra storage space. That’s quite a change from the previous open-plan layout with little privacy. At its Frankfurt hub, a personal assistant is available to greet first-class passengers and take care of all “travel formalities quickly and discreetly,” according to the German airline.
“The pressure to keep up with the times could be sufficient justification for such a large investment,” said Daniel Baron, managing director of Tokyo-based Lift Aero Design, of airlines investing money in redesigning their cabins.
Spend
A round-trip flight from Sydney to Los Angeles in Qantas first class costs nearly $18,000, while a flight from Frankfurt to Tokyo on Lufthansa costs about $15,000. That’s still significantly less than what some super-rich travelers are shelling out for private jets, a segment that has seen a surge during the pandemic as people sought to avoid crowds and virus-related restrictions.
“The airline industry is responding to this demand,” says Melanie Lieberman, editor-in-chief of the travel website The Points Guy. First class is “a very safe, reliable sector” in which people are willing to “pay more for space, privacy and exclusivity, even in severe economic crises.”
More luxury
Lufthansa’s newest Boeing 787 and Airbus A350 aircraft will feature two single suites in first class and a double suite called Suite Plus that can accommodate two people. These have floor-to-ceiling walls and a lockable door and will be introduced in 2024.
The suite “conveys the feeling of privacy and individuality similar to a hotel room, only at an altitude of eleven kilometers,” said Lufthansa manager Jens Ritter at the product launch in Berlin in February.
As part of the fleet renewal, Lufthansa’s Business Class will also include suites with chest-high walls and sliding doors.
Qantas, on the other hand, offers space for 14 passengers in the first class of its A380 superjumbos. The newer, smaller A350 aircraft can accommodate six passengers. The individual cabins are currently equipped with armchairs and a 212-centimetre-wide flat bed with a memory foam mattress, as well as cotton throws, a duvet and a selection of pillows.
The cabins are designed to accommodate two people in case travelers want to eat together.
These exclusive areas take up a lot of space on airplanes. A standard first-class suite on a Singapore Air A380, which tops Skytrax’s industry rankings in this segment, takes up about 4.6 square meters, which is almost a third the size of an average apartment in Hong Kong.
Next
Lufthansa and Qantas are among the first airlines to announce details of their plans for first class on smaller long-haul jets, potentially operating on a wider range of routes.
Air France and Japan Airlines Co. are also getting involved, offering new cabins as early as winter. The French airline wants to offer the “longest suite on the market,” with five windows, a seat, a bed and a sofa. Qatar Airways also wants to modernize the first class of its delayed Boeing 777-9.
©2023 Bloomberg L.P.
