Can Premium Economy work in the current market?

9 replies

KULMELflyer

Member since 08 Jun 2015

Total posts 2

Can Premium Economy work in the current market? What are the strength and limitation that Premium Eco has? Why not more airlines are in favour or Premium Economy?

jet_setter

Cathay Pacific - Asia Miles

Member since 01 Feb 2015

Total posts 126

IMHO it works (to some limit) I often see PY cabins half empty when J and Y are running at capacity (especially on CX but thats a different story)...  For me it works as I dont want to travel Y when travelling for pleasure and I dont want to pay the price tag of J. Luckily enough I do get J travel with work  and to be honest its not fun down the back end when travelling for pleasure so for me the PY cabin has really opened up a great niche for my particular needs. I think a small PY cabin (2 rows) is fantastic. 

The only thing that grinds my gears is that a one class upfrade from a Y ticket with points pushes you only into PY (gone are the days of Y to J points upgrades, albeit on the a330. 

In all I would say that from my POV it does work in the benefit of the customer. In terms of current market I think the demand is there but I think it will take time...... 

jet_setter

Cathay Pacific - Asia Miles

Member since 01 Feb 2015

Total posts 126

"albeit on the a330" refering to QF only!

Dale

Qantas - Qantas Frequent Flyer

Member since 28 Dec 2011

Total posts 30

Why is CX a different story?? 

TheRealBabushka

Member since 21 Apr 2012

Total posts 2,060

Premium Economy is an "aspirational product". Some markets are not mature enough for there to be a critical mass in the aspirational segment. There needs to be a significant price premium in the Business and First cabin to facilitate  the evolution of this aspirational segment.

Where markets are fairly mature the lack of Premium Economy is also an indication that the airline may be growing capacity. Premium Economy is a strategy deployed when airlines cannot justify/unable to facilitate the growth of capacity but are desperate to increase yield by tapping into potential consumer surplus. In such circumstances such a strategy smacks of desperation.

riley

Virgin Australia - Velocity Rewards

Member since 19 Mar 2014

Total posts 358

I disagree. With the evolution of business products into what is very close to first many years ago, the condensation of economy cabins and some businesses clamping down on business class travel, particularly for sectors sub 9 hours, it's opened up a new niche.

It's a case of horses for courses. The leisure market with a little more cash or a good way of decantering us of our points in an upgrade from economy.

I think it's still an evolving market, as is the business product on most airlines. What I see in the future of full service airlines is 4 classes with only 3 configured on an aircraft. Economy, premium, business or economy, business, first. Then those aircraft working the routes where they optimise yield.

While I agree with some of your sentiment in it being a revenue grab, I don't believe that's a deciding factor.

BizTraveller

Air New Zealand - NZ*E

Member since 17 May 2015

Total posts 41

10 years ago when you travelled more than 5 hours business travel policys supported Business Class for their staff on international business trips - over the years these benefits have been trimmed back as business look to squeeze as much as they can out of travel budgets. Premium Economy was the way for airlines to combat this trend. At least in the early days. We can debate if its been sucessful or not but one thing is for sure not all premium economy products are created or priced in the same way. My view is do your research and use wisely - as not all priemum economy prodcts are created equal..

Rkwm

Member since 23 Mar 2012

Total posts 39

The PY cabin should be a sought after product if it offeres value for money with consistency and undeniable enhancements over Y.I agree with  Jet_Setter regarding CX  PY , the cabin is either empty or used as  Y overflow . Also the product has considerably deteriorated  since it was initiated . My last three flights  served only economy meals  and  all  the  small  enhancements over Y have gone .I found this  strange but  realized the cabin was  treated as Y for all intensive purposes . The QF product  has remained consistent and  still offers value . The difference between PY products is certainly wide !

wdeguara

Etihad - Etihad Guest

Member since 06 Apr 2012

Total posts 77

With airlines increasingly cramming in more seats into their long-haul Economy cabins (9 abreast in 787 and 10 abreast in 777 being common examples), Premium Economy is increasingly seen as the option for folks who still wish to travel in  reasonable comfort where the cost of a Business class fare cannot be justified.

Dale

Qantas - Qantas Frequent Flyer

Member since 28 Dec 2011

Total posts 30

The wife and I travelled PE in CX last year, to LHR. Cost $3600, travelling this year cost $2850. Yes it is not Business, but you are not paying for business. PE will succeed if it is a different product to Economy, and I don't just mean the seats and the space. I mean the added pieces, there will be a temptation to reduce this part, to save money, this will kill PE. 

What I did notice last year was that the age of the passengers was baby boomers. Which tells me that this is the market buying the product. 

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