Airlines to Blur Class Distinctions by Selling Perks in Coach, Study Says

Airlines will blur the distinction between business class and coach in coming years as they offer a greater variety of ticket options to boost sales and exploit new communications technology, according to a study released today.

The changes will result in the creation of “virtual classes” based on optional extras, the report from Oxford Economics and travel-technology provider Amadeus IT Holding SA says. Carriers will also boost cooperation with high-speed rail providers and seek to tap markets for onward travel.

“The future of the aircraft cabin is set to go through significant changes as customers are able to share their preferences with airlines,” the report says. “Business class is most likely to survive and thrive, but classes in general are likely to become increasingly fragmented.”

The introduction of premium-economy seats with more space than coach at significantly less cost than business berths began the trend toward more personalized flights, according to the study. Future offerings are likely to include early check-in for economy travelers, first access to cabin luggage space, more food choices and paid-for passes to premium lounges.

Full-service carriers have already started to look beyond ticket sales for revenue, with UAL Corp.’s United Airlines and AMR Corp.’s American Airlines bringing in 3 billion euros ($4 billion) between them, according to the report. Airlines will increasingly have to look beyond flight service to make money, said Amadeus’s Philippe Chereque, one of the report’s authors.

“Airlines will make more revenue if they think about additional services,” Chereque said in an interview today. “The travel experience itself, before or after the trip, there you have a lot of things to be either bundled or added.”

To contact the reporter on this story: Howard Mustoe in London at hmustoe@bloomberg.net.

To contact the editors responsible for this story: Kenneth Wong at kwong11@bloomberg.net; Colin Keatinge at ckeatinge@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.