American Airlines joins upper economy class competition, Singapore Airlines will not fly premium economy

AMERICAN AIRLINES calls it Main Cabin Extra, but it is really a move towards an upper economy class differentiation. The seats in this cabin – installed in its Boeing 777-300ERS aircraft – will boast an extra four to six inches of extra leg room over a regular economy seat. The comfort comes at a price of between US$8 and $108 additional per flight segment. For that extra cost, passengers will be accorded priority boarding.

American’s move is to be expected, after United-Continental’s earlier announcement of Economy Plus seats on long haul flights from Newark to Europe. Delta is also in the process of introducing the upgraded product.

This trend has gained more attention since Cathay Pacific Airways started selling premium economy seats for flights taking off April 1 between Hong Kong and the destinations of Sydney, Toronto, Vancouver and New York. London will be added in May.

However, Singapore Airlines (SIA) which is widely reputed for its premium class service is not convinced that this too is the way for it to go. In a post by Aspire Aviation (Mar 8, 2012), an SIA spokesperson was quoted as saying, “We do study the concept of Premium Economy from time to time, SIA but we have determined that it is not something that we will introduce at this stage.” It looks like the airline would not be distracted from the true-blue premium market.

In the present economic climate, the demand for premium travel has weakened somewhat. There has been a fair amount of seat substitution as travelers downgrade for cheaper alternatives, resulting in the growth of economy travel at the expense of premium travel which is largely hurt by the weaker demand within Europe and from Europe to Asia. Airlines are banking on an upper economy product to capture not only downgraders but also travellers who may want something better than the regular economy product but are not prepared to pay premium class fares.

Will SIA lose market share if more airlines, especially its close rivals, go that way?

The truth is that premium economy has been around for a while without stirring nary a storm even in a teacup. Except for a small measure of additional leg room, it is still very much an economy class product (and the tag that is being used even until today is unfortunate). In fact, full-fare paying economy class passengers of most airlines stand a good chance of being offered these seats gratis sort of. American Airlines has said certain frequent flyers and passengers who pay a full economy fare will receive the Main Cabin Extra product free.

However, if there is one factor that could give the upper economy concept a more vigorous boost, it is how the prolonged sluggish economy has changed travel habits and preferences. And Cathay more than any other airline is likely to set a new benchmark for the product and bring it to the next level. Unless it holds its own as a unique permanent feature and not just as a stop gap alternative between now and when the good times roll back, SIA may be wiser biding its time.

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About David Leo
David Leo has more than 30 years of aviation experience, having served in senior management in one of the world's best airlines and airports. He continues to maintain a keen interest in the business, writes freelance and provides consultancy services in the field.

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