Airlines have seen a surge in demand for premium tickets from leisure travelers in the past five years, and it’s a trend that shows no sign of slowing down.
For example, United Airlines executives said during the company’s second quarter earnings call in July that they were seeing a 5.6% increase in premium cabin revenues year-over-year, and that the airline will invest in more premium cabin products and capacity in the coming years.
“Demand may not be quite as strong across the board as it once was because of the national economy, because of decrease in travel demand … (but) premium leisure demand appears to be more resilient,” Henry Harteveldt, president of Atmosphere Research, a travel industry analytics firm, told USA TODAY. “The people who earn above-average incomes, much higher than above-average incomes and who enjoy traveling are willing to spend extra to have flights that are more comfortable.”
To meet that demand, airlines have been investing in cabin overhauls that focus on adding premium seats. But, in order to do that with limited airplane cabin space, airline executives have to make a calculation about how to ensure the right mix of seating is available onboard.
“It’s real estate, the aircraft is real estate,” Ahmed Abdelghany, associate dean for research at Embry-Riddle Aeronautical University’s David B. O’Maley College of Business, told USA TODAY. “It has limited space and it’s up to you to put X number of premium seats or Y number of economy seats, but at the end I have to make sure the revenue from the premium seats is the same or higher as for the economy seats in the same space.”