Passengers fly through business class seating on an American Airlines flight at London Heathrow Airport, August 14, 2018.
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Cheap seats are no longer enough for airline passengers.
Since the pandemic, travelers have shown airlines that they are willing to pay to sit in the relatively spacious front of the cabin. This means that many seats are already full, so it is difficult for frequent flyers to get free upgrades in front of the plane.
And the ranks of frequent flyers with elite status are swelling from airport lounges to packed first boarding groups, meaning more competition for those seats. Expect more traffic during the year-end holiday period, which airlines predict will set another record
Even in the off-season as early as 2025, executives forecast strong demand. U.S. airline capacity in the first quarter will increase about 1% from a year earlier, according to aviation data firm Cerium.
“We’re probably seeing our best unit revenue on transatlantic (routes), for example, in late winter,” said Delta Air Lines President Glenn Hauenstein at Investor Day in November.
The price difference between first class and coach varies, of course, based on distance, demand, time of year and even time of day. For example, launch a round-trip ticket United Airlines In the first week of February, flights from Newark, New Jersey’s hub to Los Angeles International Airport were $347 in standard economy and $1,791 in the carrier’s Polaris cabin, which has lie-flat seats but no international business-class lounge access. .
American AirlinesNonstop flights from New York to Paris during Easter week 2025 were $1,104 in coach and $3,038 in the airline’s flagship business class.
A view of the Delta Sky Club at Los Angeles International Airport, Sept. 2, 2022.
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Billions of dollars in revenue that keep airlines afloat hang in the balance. Airline loyalty programs are a cash cow, and it’s important to balance benefits like free upgrades and cash back.
In recent years, airlines have changed the requirements to earn status, awarding costs and not just distance. They also increased the amount flyers had to spend to be anointed elite status. Next year, customers will have to spend more on United to earn the status. On Thursday, however, American said it would keep its requirements the same for the next earnings year, which starts in March.
From gifting to payment
About 15 years ago, passengers paid for only 12% of Delta’s domestic first class seats. Now, it’s closer to 75% and climbing, Hauenstein told investors last month.
“We released them based on a frequent flyer system,” Hauenstein said of first-class seats in 2010 and earlier. “The incentive was to spend as little as possible, fly as much as possible and upgrade as much as possible. This led to a position where our most valuable products were the biggest loss leaders.”
It’s the opposite for Delta now, he said, with more money going to the cabin front. The carrier generates 43% of its revenue from basic cabin economy tickets, down from a 60% share in 2010.
The most profitable carrier is bucking the trend across the industry, from Delta to discounters Frontier Airlineswhich is adding more first class seats to the front of its Airbus fleet in 2025. Wednesday, JetBlue Airways It called it “Junior Mint” and said it would introduce two or three rows of domestic business class on planes that don’t have a higher level of mint business class.
a day ago Alaska Airlines It announced it will retrofit some of its planes with premium seats as it prepares new international flights after acquiring Hawaiian Airlines earlier this year, with revenue from higher-priced seats outpacing standard economy.
“You can see that the Airbus 330 and Boeing 787s are under-indexed in business class and lack an international premium economy cabin,” Alaska commercial chief Andrew Harrison said at an investor day in New York on Tuesday. “So we expect that beyond 2027, you’ll see our premium mix continue to grow.”
A Delta Sky Club passenger lounge inside Hartsfield-Jackson Atlanta International Airport, Sept. 5, 2019.
Jeff Greenberg Universal Image Group | Getty Images
Bigger business
Airlines are now racing to add first-class sections or large international business classes featuring large screens and closing doors on flatbed seats.
“We’ve seen higher paid demand for premium cabins than pre-pandemic,” said Scott Chandler, American Airlines’ vice president of revenue management. “More people want a premium cabin experience.”
Chandler said American has worked over the past few years to make it easier for customers to purchase premium cabins, with post-purchase options to upgrade to other cabins such as first class or premium economy.
American is retrofitting some of its long-haul aircraft to include more premium seats, as have other carriers, adding larger international business class cabins that will feature new seats with sliding doors. Delta and United have also increased their premium offerings to keep up with customers willing to pay for premium seats.
“They are doing everything possible to entice you to pay for their premium products. They should,” said Henry Hartvelt, founder of the travel consulting firm Atmosphere Research Group. Customers don’t buy a store-brand item at a department store and then expect “the sales person (she) will ring up the product and give you a free designer bag.”
Southwest Airlines adopted its own method. In 2026, it plans to fly with several rows of extra-legroom seats, restore its standard coach-only cabins that it has flown for more than half a century, and phase out the open seats.
CEO Bob Jordan says it’s partly a “generational change”.
“What we’re seeing is our younger customers are looking for a little more premium,” he said in an interview this week. “A lot of it is a change in mindset, a willingness to spend more on travel and less on other things.
But the airline decided to keep the number of seats on its planes largely the same and, after surveying customers and weighing the cost of losing space for more seats on board, is not adding first class like other carriers.
For the first class, Jordan said, “You’re talking about ovens, you’re talking about food, you’re talking about systems. It’s a huge capital investment and a big jump.”
“But never say never,” he said.