Qantas and Virgin Australia are upgrading their business class offerings, but will travellers pay more for the privilege?
Both airlines are set to launch new business class seats on their Airbus A330 jets which ply the east-west transcontinental route.
The next-gen Qantas and Virgin Australia seats will offer a lengthy lie-flat bed, greater personal space and direct access to the aisle for every passenger.
But such creature comforts require a larger footprint than today's seats, resulting in fewer seats in the business class cabin.
Virgin Australia's Airbus A330s will lose close to 20% of their business class capacity, with the pointy end trimmed from 24 seats down to 20.
Qantas has not revealed the new configuration for its refitted domestic Airbus A330s, which currently have 36 seats in business class.
However, given that those seats are more tightly packed than Virgin Australia's current A330 offering, the Flying Kangaroo's revised seatcount is likely to drop below 30.
Passengers will pay more for better seats
Virgin Australia CEO John Borghetti has hinted that business class fares will rise, with the new seat offering an improved travel experience for which passengers will be prepared to pay a bit more – thus narrowing the price gap between Virgin and Qantas.
“I can guarantee you one thing, we will be competitive, we have to be competitive" he says, "and everywhere we've operated we have always brought fares down. But people will be prepared to pay a premium (for this seat)."
Borghetti also expects that the updated A330s will deliver higher yield, or revenue per passenger, in part because they have fewer premium seats.
"It's a question of yield mix, not absolute seat numbers" he explains.
"A lot of people make the mistake of equating seats with revenue. But that's not necessarily the case because the bigger the aircraft the more seats you have, the harder it is to yield-manage and the more desperate you get to fill every seat."
"So yield management comes into play very importantly here, and our business case shows very strongly that the (yield) result per airplane will improve – we wouldn't be doing this otherwise."
A spokesperson for Qantas declined to comment on any potential impact of the A330 refit on fare pricing, saying "As we haven’t yet confirmed or released any details of the configuration including seat count of the refurbished aircraft yet, (we) aren’t in a position to comment on this at this time."
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