Luxe 'lite' takes flight in Asia
Spread of 'premium economy' seating reflects rising middle-class aspirations
How many among the legions of budget travelers who struggle down the narrow aisles of a plane toward the nether regions of "cattle-class" have not looked wistfully at the cool, comfortable passengers sipping pre-takeoff champagne in their deluxe business-class seats? If you catch their eye, chances are you will be met with a look of smug pity, or even discomfort, before the gaze is quickly averted -- rather like the common, middle-class response when passing a street beggar.
This "aviation apartheid" has given airlines -- always hungry for new sources of profit -- a whole new travel class to develop: premium economy. In the age of booming air travel, this in-between category has tapped into rising middle-class aspirations worldwide, though nowhere more than in Asia, where premium economy and its variations have come into their own.
By 2015, more than 12 full-service airlines based in the Asia-Pacific region were offering premium economy class, at little more than 10% to 15% above a full economy-class fare, according to Sabre Asia Pacific, a travel research organization. By 2017, at least five more regional airlines had joined the dozen, with three from the region ranked among the top five premium economy services in the world by Skyscanner, a travel fare aggregator website. The five were British Airways, Air New Zealand, Cathay Pacific, Lufthansa and Japan Airlines. Indeed, rating the various premium economy services seems to be the latest game on travel information and chat sites. And the boom is set to continue, with U.S. airlines among the latest to start premium economy services.
Globally, much of the demand for premium economy services has been attributed to the business traveler facing budgetary constraints amid the growing squeeze on corporate travel expenses.
According to SeatGuru, an offshoot of the popular travel site TripAdvisor, a premium economy fare is generally 65% cheaper than a business-class fare on the same route and just 10% to 15% more than standard economy. As SeatGuru said, for the cost-conscious business traveler, it provides a bit of luxury in the guise of plain economy: "If your employer's travel policy doesn't allow business-class travel, premium economy can be a great choice; you'll have upgraded seats and an 'economy' ticket on your expense report," it noted.
In Asia, however, it is not really about compromising in order to save costs, but paying a little extra for unaccustomed -- albeit modest -- luxury. Essentially, the popularity of premium economy both reflects and feeds middle-class aspirations -- a dynamic fueled by the emphasis placed by budget carriers on individual leisure travelers for upgrade packages.
That big-fish feeling
Take, for example, the success of "premium" services and loyalty programs among discount carriers such as AirAsia, which now offers neat "value pack" or "premium flex" upgrade packages for astonishingly low prices. While European budget airlines have sought ways to cut services to the bone -- with Ryanair's CEO Michael O'Leary suggesting at one point a new "standing class" where travelers could fly at rock-bottom prices strapped to the cabin wall -- Asian low-cost carriers are wooing individual travelers by adding frills.
For as little as $15 to $20 on some of AirAsia's Southeast Asian routes -- or more on "long-haul" routes such as Kuala Lumpur to Perth -- you can sit in the "hot seats," the first rows in the cabin, or even buy a "flat bed" (which is far from flat but has a comfortably large recline). Premium packages also include a free in-flight meal, extra luggage allowance and use of the airline's "Premium Red" lounge in Kuala Lumpur. Then there is that exhilarating feeling that you are the biggest fish, albeit in a small pond.
As a Thai friend explained: "It can sound kind of silly, but paying a bit extra for the top package on a budget airline makes you feel a bit special, the opposite of feeling like the poor relative on mainstream airlines."
All these "no-frills frills" might defeat the rationale of a budget airline in the first place. Even so, their encroachment on the preserve of flag carrier airlines remains largely below the radar. Most mainstream travel agents and websites still tend to ignore the discount players, although tellingly, more search engines are including them in fare searches.
Back in the world of full-service carriers, you may feel like Cinderella at the ball as you take your premium economy seat. But SeatGuru reminds us: "In terms of space and amenities, these two classes are very different, with business-class offering up to 50% more legroom, significantly greater recline ... and superior food and wine offerings."
Asia is clearly not short of highfliers ready to pay top dollar for in-flight luxury. But the real prize, for airlines and other consumer-driven companies, is the growing market of middle-class consumers who are prepared to pay just a little more for better services or goods. The region's budget carriers, for one, are proving savvy at getting them on board.
Gwen Robinson is chief editor of the Nikkei Asian Review.