Premium Economy is a popular choice for travel bookers on a tighter budget. Bob Papworth discusses the ups and downs of the simple idea, which has really taken off
As the inimitable Robert Robinson might have said, had there ever been a TV programme called Ask The Travel Management Family, this one's for purchasing professionals and older procurement specialists only: "On a return flight between Heathrow and JFK, what costs more than 60 quid an inch and, at least as far as your travellers are concerned, is worth every last penny?" If you came up with "the difference in seat pitch between Economy and Premium Economy", the points are yours ... A few years back, there were only three classes of air travel to choose from but then, because the front end was beginning to echo a bit, some bright spark came up with the Business/First combo.
Then, because it worked once, the boffins thought it would probably work again, and invented Premium Economy. How the Luddites laughed. No right thinking individual, actually chooses to travel in Economy. People travel in Economy because they cannot afford - or choose not to afford - the extra couple of grand to have someone hang their jacket up.
Following the Premium Economy concept to its logical conclusion, they scoffed, there would be a different 'class' for every row of seats, each one just a little more comfortable (and costly) than the row behind. Extra crew would be required, just to open and close the countless curtains.
It is the Luddites' lot to be wrong, of course. The corporate need to slash spending, coinciding with a lot of hand-wringing over travellers' work-life balances, has turned an essentially daft idea into a wizard wheeze.
Whether it would have worked as well in different circumstances is open to question. However, with employers looking to make reductions in travel spend while continuing to allow their staff to travel in a modicum of comfort, Premium Economy has caught on in a big way.
Although relatively few airlines offer a distinct Premium Economy product, the number is growing, with mainstreamers such as United Airlines and Air France being joined by smaller carriers such as Polynesian Blue and Air Caraïbes, and the increase is such that Skytrax, the London based organisation behind the World Airline Awards, last year gave the hybrid its own prize category.
This year, the gong was won by Virgin Atlantic, where general manager, sales, Paul Wait insists Premium Economy is more than just an expensive sink trap to catch Virgin's Upper Class business that would otherwise go down the drain: "Premium Economy is both defensive and acquisitive. Where business travellers are being told to downgrade, travel management companies can soften the blow by offering both cost savings and comfort. It's not all one-way traffic, however. We see a significant number of travellers upgrading from Economy when they get to the airport, which suggests that there is an opportunity for travel management companies to market the Premium product at the point of sale."
Mike Wang, UK and Eire sales and marketing manager for Taiwan's EVA Air, which won the inaugural Skytrax Premium Economy award in 2008, echoes Wait's sentiments: "Current trends in the business travel market show that travellers want choice and flexibility. Obviously everyone is under pressure to control costs and, for many travellers, making the leap from Business to Economy Class is a step too far, especially on long-haul routes. Premium Economy, however, is an acceptable alternative, practically and psychologically. Business travellers have room to work and high levels of comfort."
That comfort comes, primarily, in the shape of extra legroom. Bmi has the most generous as it uses its old Business Class as its Premium Economy offering with a massive 48-inch seat pitch on its A330s. Both Virgin and British Airways offer a 38-inch seat pitch in Premium Economy, compared with 31 inches in Economy Class.
Others are less generous - SAS offers only five extra inches, while United's Premium Economy passengers have to make do with a mere four extra inches.
It's important at this point to note that seat pitch is not the same as legroom - a common misconception. Seat pitch refers to a specific point on one seat to the same point on the seat in front, and so, therefore, the thickness of the seat itself has a bearing on comfort and legroom. "Elite Class [EVA's Premium Economy brand] is now the most popular product for our long-haul flights, and has secured a loyal following of business travellers," says Mike Wang.
The "loyal following" is not restricted to the travellers themselves. The substantial cost-savings involved are, understandably, finding favour with corporate clients. Public fares for that Ask The Travel Management Family transatlantic trip, booked in late July for September travel, work out in excess of £2,500 in Business Class with both BA and Virgin. The Premium Economy fare, for the same roundtrip, on the same airlines, may be more than double the 'pure' Economy ticket price, but still comes in under £800 - a saving of £1,700, or nearly 70 per cent.
Hardly surprising then, that Prashanth Kuchibhotla, director of advisory services at American Express Business Travel, says: "We have seen a number of our clients change travel policy and they are asking their business travellers to travel Premium Economy and even Economy as an alternative to Business Class. Many airlines offer additional benefits in Premium Economy cabins compared to Economy in addition to legroom - wider seats, dedicated check-in and so on."
That said, Amex's latest Business Travel Monitor, for second-quarter 2009, shows sharp drops in other fare bands. Lowest-available corporate Business Class fares were down 12.7 per cent quarter-on-quarter, while the most expensive fully flexible Economy tickets were 16.6 per cent cheaper.
As well as insisting that Business Class can only be used for flights of over six hours, clients are asking their travel management companies to mix and match - for example, Kuchibhotla says: "Another creative way to save money is to use Premium Economy on westbound flights across the Atlantic and Business Class coming back. The rationale is that westbound flights are almost always are day flights, so is a flat-bed really necessary?" That question - or one very like it - has been exercising the mind of Peter Reglar, chief executive of Business Travel Direct.
Like Amex's Kuchibhotla, he has seen plenty of heavily-discounted Business and First Class fares, "the like of which we will probably never see again".
And that leads Reglar to ask whether First Class will survive, in its present form, on more than a few upper-upscale airlines: "We are doing a lot of nett and non- flexible fares at the moment, and there are also plenty of great offers out there, but overall, yes, we are seeing a shift from the front towards the back of the plane," he says. "Will the real Premium business ever come back? I think it will, but only to a degree, and it will certainly take a while.
I would never say 'never', but I think the likes of Virgin have got it absolutely right - I can see a time when the old First Class will disappear, but this [economic crisis] has demonstrated there is a need for something in between."
Peter Muller, UK country manager for ATP, has a rather different take on the situation - airline discounts are currently so attractive, he implies, there is little need or incentive for travellers to explore the nether reaches of the fuselage.
He explains: "ATP has always differentiated between discretionary and non-discretionary travel, the latter being anything from ships crews through to sports teams, who can't reschedule or conduct their business by videoconference.
A review of our figures for discretionary travel shows some down-trading but not of any statistical significance. This led us to dig a little deeper and we have found a large number of changes to more competitive fares in the same cabin. This is, in part, due to increased take-up of our lowest-applicable fare offers but, equally, to the airlines responding to the current situation with spot fares that offer significant value."
Discounts, unlike diamonds, are not forever. When the good times start to roll again, the cut-price come-ons will almost certainly evaporate but, even if passengers do start to move back to their single-digit seat numbers, Premium Economy looks set to stay. Whatever the Luddites say.