American Airlines’ First-Class Cabins Losing Space to Business Class

American Airlines is slowly phasing out first-class seats in favor of expanded business-class cabins, which have become more popular with passengers and more profitable for the carrier.

According to a report published Thursday by Bloomberg, American Airlines is beginning to “wave goodbye” to 3-class cabins. On international flights, the airline now offers all three classes — first, business and economy — only on its 14 largest aircraft, the Boeing 777-300ER. The company is also overhauling its fleet of long-haul Boeing 777-200 by dropping the first-class cabins in order to include more business-class seats.

“We’re responding to what demand is,” American Airlines spokesman Casey Norton told Bloomberg. “We’ve looked at what the demand level is for business and also what we need in the main cabin as well. That’s where we think we’ve hit the sweet spot.”

Business reporter Olivia Sterns explained to viewers of In The Loop why American’s move away from first-class cabins makes sense. “If you look at who is up in first class, first of all, the cabin is very rarely full, and more importantly,” Sterns said, “even if it is full, it is very unlikely that the people in those seats actually paid the full sticker price, because the people who end up in first class, they’re usually there because of some sort of loyalty status.”

American lists very few differences in amenities between its descriptions of first- and business- class cabins, but a Bloomberg survey of non-refundable fares for flights between New York and Beijing departing between August 25 and September 1 found that the average price of a first-class ticket cost $10,142, a business-class ticket cost $6,613 and an economy ticket cost $4,632.

“They’re asking you to pay a $3,500 premium to go from business class to first class,” Sterns noted. “If you think about it there’s really a very incremental difference up there. We’re talking about the difference literally between chateaubriand and filet mignon. Or we’re talking about slippers and pajamas or just pajamas. Either place, you’re still going to get a white table cloth, a full meal, a steak dinner, a blunt knife and a set of Bose headphones.”

The demand for first-class seats may be on the decline, but the demand for luxury travel is not waning.

“The big takeaway, though, is that it’s not the end of first class. Business class is becoming what first class used to be,” Sterns said. “You’re still going to have a 3-cabin airplane. It’s just premium economy is the new stop.”

[Photo: American Airlines]