After the sinkhole left by the coronavirus crisis in air transport, airlines are beginning to take some air at the pace of the recovery. One of the bets of the companies that before the covid was on the rise was the inclusion – especially in the long radius – of a new middle class: the turista premium (the name varies depending on the company). This offers more comfort and services than the economic one with an extra cost not as high as the business class. Its benefits convince more and more passengers and it has become the most profitable fare to sell for airlines. A safe bet that gains space, even at the cost of taking it away from the prestigious class business.
The front of the aircraft is still the keystone and where companies make most of the profits per flight. The pandemic punished tourist movements and almost made business trips disappear, which were those that traditionally dominated the majority of executive class seats. However, with this movement the airlines achieve that the profitability of the space is even greater than when the plane was divided only into tourist and business, and it achieves that many leisure trips are made for a somewhat higher value. It is always an incentive to be able to make a more comfortable flight of several hours and leave the crowded area of the ship.
The change began mainly in North America, although it was also incorporated in European firms more than a decade ago. One of the first to include it in the Old Continent was Air France in 2009. Currently, it offers in its fleet between 6% and 11% of the seats in this category. “Most of our clients in the class premium economy [así la llama esta firma] They are over 45 years old and fly frequently. They travel for pleasure and they indulge in doing it more comfortably, “explain company spokespersons.
In the case of Iberia, it included this rate in January 2017 and the bet exceeded the expected figures until the pandemic arrived. So much so that the new aircraft commissioned by the firm had already been designed with a part reserved for this cabin. In addition, in the ships that were already in use, space was made subtracting space from the business class. “At retrofit of the Airbus A330 we removed seven seats from business to implement the new cabin turista premium”, Say sources from the airline, which belongs to the IAG group. The benefits that explain its success are divided into two aspects: on the one hand, by what it offers to travelers. And on the other, for the investment in space and resources that is required. Either way, there are substantial advantages over what already existed.
For travelers in this class, they have priority access, wider seats, greater recline and a more extensive dining option. This, of course, at an additional cost. “On average the price of a ticket in turista premium It can cost between 250 and 500 euros more than a tourist, although it costs between 1,000 and 1,500 euros less than those of business”, Detail Iberia spokesmen.
On the side of the numbers of the company, the profitability of these rates is also higher. The seats occupy as a general rule just 10% more than the tourist, much less than the 300% that is needed for the executive. “Without going into details, the profitability per takeoff has increased since we offered this rate,” confirm sources from Iberia. At Deutsche Lufthansa AG, for example, the class generates 33% more revenue per square meter than the economy class and 6% more than the business, according to Bloomberg. It is also 40% more profitable than the latter because it is much cheaper to install. In fact, the German airline is already studying the possibility of eliminating more executive seats to grow this new class.
One of the fears of the airlines was that the transfer of passengers would occur as an executive at this new rate. That is to say, that the passage in the most expensive area of the plane was reduced and the income per flight decreased. But the reality has been the opposite: the main transfer takes place from the cheapest to the intermediate rate.
This phenomenon is explained because many passengers who fly for tourism prefer to pay a little more in exchange for that comfort. Although the weight of business trips in this class is also considerable, which detracts from the recovery momentum. As Bloomberg anticipated, this trend is here to stay and also has prospects for improvement: according to Counterpoint Market Intelligence, the pace of growth will accelerate as more airlines add the separate cabin on long-haul flights.
Tariff penetration is unstoppable. So much so that it has already reached the low cost, at least to those that make long-haul flights like Level. In their case, this is their highest rate, since they do not have business class. “The routes in which it works best are those that go to San Francisco or Buenos Aires. In the pandemic it has been affected just as much as the rest, although in recent months we have already seen an increase in interest in it, “say company sources. Lucía Adrover, Level’s commercial director, adds: “Including this class in a low-cost, long-haul airline allows us to offer a more complete product.”
During the hardest of the covid, with multiple restrictions on travel and movements by business and tourism almost curtailed, the business as a whole has suffered and no fees have been saved from disaster. Now, with the recovery, the ones that drag their feet a little more are the high-end ones, since they miss business trips. “We believe this is due to the fact that much of the corporate market still has not reactivated to the levels that other types of traffic have done. And corporate is an important component of the cabin turista premium and business”, Say sources from Iberia.