Is Premium Economy impacting Business Class sales? AA overselling PE.
Aug 26, 2019, 10:16 am
#31
Join Date: Feb 2013
Location: Beantown! (BOS)
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If anybody has data to show trend of business class fare of past two decades or so that will be so helpful. But this is the way I felt as going on with business class fares.
Before Housing Market Crash of mid 2000s (2005-2007) business class fares were getting higher and higher. Remember discounted business class tickets were available from consolidators which was abundant in cities like L.A., NYC, S.F.
Looked like when Housing Market Crash happened situation changed as it became more and more common for business travelers to fly in Y on overseas trips. Then airlines started to sell discount business class fares on their own, not using consolidators. These days can find business class fares to Far East for US$ 2500 - 3000, not all the time, not on all airlines, and not to all destinations. But far cheaper than full business class fare.
My thought is that airlines will not selling those discount business class fares if they can fill business class seats with full fare paying passengers. Then one thought is rather than provide discount business class fares, reduce the size of business class and hope can fill business class with more full fare paying passengers, then provide discount business class fare passengers with the new concept called "Premium Economy." Since international F is disappearing airlines may want to protect business class as a premium cabin and not dilute with discount fares. Business class is no longer "mid class cabin" between First and Economy, but for many airlines business class has become their premium cabin.
If this idea will work and stick or not is still wait and see, but to me that is what airlines is doing
Before Housing Market Crash of mid 2000s (2005-2007) business class fares were getting higher and higher. Remember discounted business class tickets were available from consolidators which was abundant in cities like L.A., NYC, S.F.
Looked like when Housing Market Crash happened situation changed as it became more and more common for business travelers to fly in Y on overseas trips. Then airlines started to sell discount business class fares on their own, not using consolidators. These days can find business class fares to Far East for US$ 2500 - 3000, not all the time, not on all airlines, and not to all destinations. But far cheaper than full business class fare.
My thought is that airlines will not selling those discount business class fares if they can fill business class seats with full fare paying passengers. Then one thought is rather than provide discount business class fares, reduce the size of business class and hope can fill business class with more full fare paying passengers, then provide discount business class fare passengers with the new concept called "Premium Economy." Since international F is disappearing airlines may want to protect business class as a premium cabin and not dilute with discount fares. Business class is no longer "mid class cabin" between First and Economy, but for many airlines business class has become their premium cabin.
If this idea will work and stick or not is still wait and see, but to me that is what airlines is doing
Aug 26, 2019, 11:12 am
#32
Join Date: Mar 2016
Location: SAN
Programs: AA CK, Hyatt Globalist
Posts: 839
Before Housing Market Crash of mid 2000s (2005-2007) business class fares were getting higher and higher.
My thought is that airlines will not selling those discount business class fares if they can fill business class seats with full fare paying passengers. Then one thought is rather than provide discount business class fares, reduce the size of business class and hope can fill business class with more full fare paying passengers...
Of of course they would like to sell out the J cabin with full fare passengers but I believe the discounted J fares are more specific to selling more seats, even at a discount, as opposed to giving them up to upgrades and awards. The decreased award and upgrade availability in J, along with the reduced number of SWUs and the high mileage requirements for awards is probably a result of selling more of those seats, be it due to discounted fares or just a stronger economy.
Aug 26, 2019, 12:29 pm
#33
FlyerTalk Evangelist
Join Date: Apr 2001
Location: NYC
Posts: 27,234
I agree with this. There was a time when J was prohibitively expensive but for several years now I’ve been buying Europe J for around $3200, although it has started to creep up a bit lately. Clearly, if you need to fly next week to Rome you’ll find a shockingly high J price.
Airlines have been segmenting coach class travelers since deregulation. It wasn't until maybe 10-15 years ago that they began doing it more aggressively in premium cabins (domestic and international). I think some airlines have 5 inventory classes for international business class (4 is probably more typical), and with A/P, min stay, and day-of-week restrictions, they can really target the travelers more likely to pay higher prices with higher fares (and vice versa).
So, plan 3 months ahead and you can get a very good J fare. Here's fares to all of Europe for a 1-week trip in November (Dec/Jan not much different), you'd be hard-pressed to pay more than $2500 r/t for a NONSTOP flight outside of a few instances. WAS/CHI prices barely any higher, MIA similar, ATL maybe a tad higher.
Aug 26, 2019, 12:37 pm
#34
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IMO, I think that the W cabin "pulls up" more passengers from the Y market segment, than pulls down from the J one. In the near future, that may change when all of the US3 have their PE refits completed. And more companies may begin to revise their corporate travel policy for long haul flights. But even that can be a net wash. While some companies may shift their current J allowance down to W, other companies-- which currently only have a Y allowance-- may start to allow travel in W. Also, J cabins have already shrunk in size as it is. And I would place my bet that if the W cabins grow in size due to demand, that it will come at the expense of seats in the Y cabin, not J. Does anyone think that AA will further reduce their J cabin from the current 20 seats? I don't.
Aug 26, 2019, 1:05 pm
#35
Join Date: Feb 2013
Location: Beantown! (BOS)
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So, plan 3 months ahead and you can get a very good J fare. Here's fares to all of Europe for a 1-week trip in November (Dec/Jan not much different), you'd be hard-pressed to pay more than $2500 r/t for a NONSTOP flight outside of a few instances. WAS/CHI prices barely any higher, MIA similar, ATL maybe a tad higher.
London is listed round trip of $2,291. Looking at details:
Iceland Air: $2,291 stop at KEF
Aer Lingus: $3,072 stop at DUB
Turkish Airways: $3,062 stop at IST
British Airways: $7,012 non-stop
Paris is listed round trip of $1,906. Details are:
Azor Airlines and TAP Air Portugal combined: $1,906 stop at LIS and PDL
Turkish Air: $2,689 stop at IST
Aer Lingus: $2,716 stop at DUB
Iceland Air: $2,945 stop at KEF
TAP Air Portugal: $3,375 stop at LIS
Royal Air Maroc: $3,576 stop at CMN
Air France: $9,185 non-stop
Yes, round trip business class to Europe for less than $3,000 exists but it is not like all airlines has such fare, unlikely non-stop, day of the week restriction, etc.