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For anyone who has ever dreamt of flying first-class, time may be running out.
Emirates Airline this week kicked off the Dubai Air Show by unveiling the luxurious private cabins it will put on its Boeing 777 aircraft. The result is an elegant, hotel-style space designed to meet needs most passengers do not even know they have.
But like Singapore Airlines, which unveiled its own $850m first-class revamp earlier this month, Emirates has decided that it needs to provide such six-star luxury to fewer passengers than in the past.
The number of first-class suites on Emirates’ 777s will fall from eight to six as a result of the revamp.
When the concept is extended to its superjumbo A380s, the number of private cabins will go down from 14 to 11. Singapore has halved the number of first-class places on its A380s.
Tim Clark, Emirates president, insists that the reduction in seats available to passengers prepared to pay on average three to six times the economy-class fare does not signal the demise of elite travel on his airline.
The company has just invested four years and millions of pounds — he will not disclose the final sum — in revamping the elite category.
“Demand for first-class on Emirates . . . remains very strong,” he says. “We have a very loyal customer base and we need to keep [them] interested in what we are doing.”
First-class cabin on an Airbus 380, operated by Etihad © Bloomberg
Yet the number of seats available to first-class passengers is shrinking in most parts of the world, according to OAG, the aviation data consultancy.
During the past three years, first-class capacity has fallen 7.3 per cent in western Europe, and in North America 23.6 per cent.
Instead, evidence suggests airlines are beginning to devote more space to lucrative business-class passengers, who fly more frequently, cost less to serve and take up less space than the occasional elite traveller.
According to the International Air Transport Association, the number of seats dedicated to premium travel, which combines first- and business-class passengers, has largely held steady at 5.2 per cent. If first-class capacity is declining, business class appears to be shoring up premium travel.
That is a trend observed by the big aircraft manufacturers which configure the seating in passenger jets for their airline customers. “We are finding that first-class is going away in more and more markets,” says Randy Tinseth, vice-president of marketing for Boeing Commercial.
Few of Boeing’s 787 twin-aisles, for example, have a first-class option, he says, while the luxury service is provided on just 20-30 per cent of the Boeing 777 wide-bodies in operation. “They tend to be on the most lucrative markets . . . like New York, London or Dubai,” he says.
Business travellers may demand many of the same perks — such as flat beds and fine wines on long-haul trips — but they can be packed in more closely, which improves returns.
“Airlines are becoming smarter about ways to provide business-class services using a smaller footprint,” says Mr Tinseth. “It is all about square footage and finding ways to maximise the revenues.”
For many airlines, the opportunity for “perhaps an extra 20 business-class seats on a B777 is just too good an opportunity to miss in today’s market”, says John Grant of OAG.
First-class remains an important segment for Emirates, Etihad and Qatar, the big Middle Eastern airlines. According to OAG, all three have seen a rise in the number of first-class seats flown over the past three years, with growth of 8.1 per cent, 17.5 per cent and 2.9 per cent respectively.
Yet even Etihad is now reviewing whether it should rethink the balance between first- and business-class, says Peter Baumgartner, chief executive of the Gulf carrier.
Airlines are beginning to recognise that the market for such luxury travel may be more limited than previously thought.
Carriers that have built a reputation for five-star service — like the Gulf three — are now having to fight harder for these customers by investing in their first-class concepts.
“First-class is a different beast than it was 10 or 15 years ago,” says John Tighe, design director at JPA, designers of premium class cabins. “Now it is about a smaller number of passengers, but it has to be a far more elite experience.”
Will Horton, analyst at CAPA Centre for Aviation, thinks that means the days for first-class travel are numbered. “Putting first-class on fewer aircraft means airlines will have very high first-class development costs that they cannot spread out over so many actual seats,” he says.
Rubbish, says Emirates president Sir Tim. Just to be clear, there has been no rebalancing towards business class on his 777s. This is about staying competitive and meeting safety standards for enclosed cabins, which require more space per seat.
“The notion that we would eliminate first-class in fullness of time? Not on my watch,” he concludes.