Just over 5 per cent of passengers fly business class or better but they provide nearly a third of annual global revenue for airlines which totals $1.1 trillion.
Business class space has been described as the most expensive real estate on the planet, so airlines have to get it right and most importantly fill it for the right price – one that maximises yields.
Air New Zealand has launched a secret project that will shape its business class cabin to be fitted into its next new generation aircraft in the early 2020s. Its business premier seats were fitted into its long haul planes around a decade ago when the airline ditched first class.
They were based on Virgin Atlantic style seats in a herring bone style where passengers have their backs towards the window. Regarded as cutting edge at the time other airlines in different phases of their fleet renewal or refurbishment cycle have caught up with new seats and other cabin “hard product”.
Even the United States carriers have modernised their fleets after years of lagging most other airlines and aircraft serving New Zealand now have flat beds in business class and new service.
And the Kiwi airline is facing intense price competition from others in business class.
The surge in capacity to New Zealand in the past two years has led to deals such Cathay Pacific’s $3500 return to Europe and special fares on other top airlines such as Qatar that have been consistently around $6000, about half the price of what sitting right up front was routinely as little as five years ago.
Some Middle Eastern and Asian carriers are persisting with first and spending big on revamping new cabins. First class fares are typically three times the cost of business class fares which has raised expectations.
Singapore Airlines has spent over $1 billion on developing and refitting its Airbus A380s with suites that can have double beds and Emirates has just introduced fully private suites in its Boeing 777s after introducing its suites with showers 10 years ago in A380s.
But its in business class where the battle is fiercest. Air New Zealand is working in a secure site named “Hangar 22” near its Auckland headquarters with frequent flyers, design specialists and its own small innovation team to come up with new seats and flying experience. It says this involves crystal ball gazing.
“In our case we have to look as far out as 2030 and ask ourselves how we think people will be living then? What technologies will influence their daily lives, are there going to be differences between Eastern and Western markets, how will people consume digital content in the future as things like mixed reality go mainstream,” says chief marketing and customer officer Mike Tod.
The trial panel includes frequent flyers who will likely spend hours sitting and lying on different versions of possible seats.
Overseas one seat manufacturer, Thompson Aero Seating in Northern Ireland, has in the past lifted seats by crane into residents’ houses in the Portadown area so they could sleep in them overnight.
Airline seats are typically built to suit 95 per cent of the flying population and they then aim to make sure those outside that percentile band are as comfortable as possible.
The Air New Zealand project focuses initially on the business class cabin but there will be a revamp in economy and premium economy, another part of the plane the airline has been a leader in but is facing more competition.
Research for Flight Centre’s corporate arm FCM Travel Solutions finds the distinction between business and first is increasingly blurred.
“Business class continues to compete in service and comfort to a level almost comparable with first,” the report says.
Andy Jack, FCM’s general manager, said his firm had seen a significant spike in the past few years in customers travelling in business class.
“This has been driven primarily by customer choice/awareness, the quality of the product and an increase in affordability,” he said.
“Many of our customers are seeing that the offering in premium cabins is a viable and affordable option.”
This was particularly the case over peak seasons with capacity out of New Zealand is often at its maximum.
Jack said many business travellers are now choosing to spend slightly more in order to secure a seat on the date they want to travel.
“With the likes of Qatar entering the New Zealand market in recent years the bar has really risen in premium cabins and it’s exciting to see Air New Zealand committing to continuing the quality of standard we all know and love them for,” he said.
He said his customers would prioritise a “few things” in the new and improved space.
“Most importantly business travellers value time well spent, they’re not just a business person on their way to a meeting, but an individual thinking about making the most of the opportunities they find themselves in.”
Emirates’ bar that can be used by first and business class A380 passengers was an example of a space that appealed to business travellers for networking. It was also a space that allowed for travellers to have relaxed in-air meetings with colleagues, often preparing for meetings when they land.
“‘Many of our customers also mention they often find inspiration in the clouds, a lot say they have some of their best ideas while travelling so having a space that is conducive to creativity is important: good lighting, comfort, relaxed atmosphere etc.”
Best in Business: What some of Air NZ competitors are doing
Here’s a snapshot of airlines sampled recently by Herald Business Traveller and what they did well.
Qantas – Seats and service
In its new Dreamliner business class it has Thompson Aero seats, a model of simplicity and solidity that provides plenty of privacy. Seats go to lie flat in a respectable 20 seconds. Ample, unfussy stowage, relaxed colours and a fixed angled footrest in front of you. Pleasingly these seats are virtually the same as those that on Qantas A330s that are doing more flying across the Tasman out of Auckland. Cabin crew think on their feet and chef Neil Perry with help from sleep and jet lag experts is doing interesting things with food and lighting to help minimise the impact of jet lag on ultra-long range flights that will be of interest to Air New Zealand. The total travel experience is what it is all about.
Qatar – Service, and what’s coming this way
The airline uses Boeing 777-200s to fly what is the longest flight in the world between Auckland and Doha. While the 2-2-2 configuration in business is out of vogue – direct aisle access is the new normal – but the crew work is superb, formal initially but with personality to go off script. Seats are roomy enough (with a massage function) but it’s what’s coming up that is really exciting. The airline is steadily retro-fitting its game changing Q-Suite into its long range fleet The product promoted as “First in Business” provides First Class suite-type privacy, it’s roomy and if you’re not with companions — the suites can be made into a double or a quad — you can feel like the only passenger aboard the plane. The styling and comfort in a more traditional business cabin aboard a Qatar A350-900 (on another part of its network) was up there with the best on show.
Emirates —The bar and what could be the fastest seat in the air
The Dubai-based airline is the world’s biggest fan of the A380 not least because of the space it can offer for premium customers. It is refreshing its Business Class cabins but seats on older ones are fine. A grunty seat motor gets it to horizontal in a lightning 11 seconds and back upright in an impressive 13s. It offers WiFi connectivity, already being introduced to Air New Zealand long haul and a big part of its future. But it’s the bar that sets it apart. While it takes the space of eight seats airline boss Sir Tim Clark has said there’d be uproar if the upstairs socialising spot was taken away. Air NZ will not be buying A380s but other airlines have found space for less grand bars in smaller planes — worth a thought.
Singapore — Seats and Food
Singapore is also revamping its business products but on its A380 from Auckland the seat developed in “project diamond” a few years back is all about space, simplicity and privacy. The seat is a simple, big bear of a thing, and at 34 inches wide is nearly double a standard economy seat. The Book the Cook programme gives passengers the chance to order in advance (and the airline the ability to plan food better) and this is the type of service will be of interest to Air New Zealand, which has a commercial relationship with Singapore. That airline’s new generation Business class will be on show in A350-900 flights to Christchurch from early next year and the airline has plans to use the new aircraft on its Wellington-Melbourne route.
Cathay Pacific – Consistency and lounges
The airline waited a long time for A350-900s to replace its ageing A340s on the Hong Kong route, one which it operates in conjunction with Air New Zealand and it too has fitted reverse-herringbone seats. Absolute consistency with food, drink and service is a hallmark of Cathay but it’s the lounges at its Hong Kong hub that set it apart. There’s three business class lounges — it helps being home carrier at a new airport. Air New Zealand’s flagship lounge at Auckland’s international terminal is a step up on its last one but it could probably do with twice the capacity as more travellers qualify or pay for access. What space is available as Auckland Airport evolves will be critical for the Kiwi carrier — and its rivals — as the emphasis goes on the total travel experience.
Hi Fly’s A340 – Service and space
If its cavernous space Air New Zealand wants for its business class passengers look no further than the Portuguese charter airline’s ex-Emirates A340. The 21-year-old plane used over summer had a first class cabin that was enormous for the number of seats which had a 89in or 2.2m pitch. They are like La-Z-Boy recliner rockers and the service was constant. You could do a forward roll between them but not a serious contender for the style of a new business class cabin – passengers demand privacy and airlines like to make money.
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