Extreme luxury: What price prestige?

Courtesy Etihad Airways

Courtesy Etihad Airways

How much more can you stretch luxury? The sky’s the limit, it seems. Etihad Airways’ latest offering dubbed The Residence has been hailed the ultimate in high-end luxury, that is, until another airline betters it.

Only one of its kind to be introduced on each of three Airbus A380 jets planned so far, the three-room suite is a 125-square-feet property made up of a double bedroom, private bath and shower, and a lounge area which is furnished with a leather sofa love-seat complete with ottoman, dining tables, chilled drinks cabinet and a 32-inch flat screen TV. The cabin with private entrance is designed for two guests travelling together. If that’s not impressive enough, the guests will be waited upon by a personal butler trained at London’s Savoy Hotel and by an in-flight chef who will prepare gourmet menu options or create a guest’s favourite dish. The moment a reservation is made, the VIP Travel Concierge Service including a chauffeur service on the days of travel will be offered right through to the end of the journey.

The first flight equipped with this super-class will take off in December, flying from Abu Dhabi to London Heathrow. The price tag is US$21,000 one-way for an eight-hour flight.

Not surprisingly, Emirates Airlines which already offers state-of-the-art showers has indicated its intention to similarly roll out something to match Etihad’s offering. Other well-heeled Middle East carriers such as Qatar Airways may follow suit. However, the competition, if any, is likely to be confined to that region which boasts privately-owned artificial islands for the rich and famous, a ski slope in the middle of the desert, and the superlatives in luxury hotels, shopping malls and high-style living. Of course, some other airlines outside the region are as capable of providing such extreme luxury; but the economics of the markets and routes that they serve just does not add up.

In truth, reaction by industry watchers to Etihad’s Residence is a mix of “wow” and scepticism. Yet if you doubt that there is a market for such extreme luxury, it is understood that some bookings have already been made. The market for the product may be small, but so long as it remains consistent, it is hard to fault the reasoning. It is niche marketing, and Etihad will do well to under-supply. The same principle applies collectively, if other Gulf carriers decide to add to the competition. But that’s beside the point; at that level, prestige overrides economics. For those customers who can afford the price, money is not the issue, and for airlines such as Etihad which can afford to fly the cabin empty, neither is it. Hard, indeed, it is to pin a price on prestige.

Etihad’s initiative has come at a time when the industry is crawling its way gradually back into profitability, almost contrary to what many airlines have been doing thus far to contain costs in the face of rising fuel prices. But it is a different kettle of fish altogether; the super-class’s closest competitor is more likely the private jet. But its introduction may have excited the industry to shift focus back to premium travel, noting that legacy airlines make most of their money at the front of the aircraft. As the global economy improves, there are emerging signs that this is already happening, with major airlines such as Qantas, Singapore Airlines and Cathay Pacific announcing plans to further enhance the experience of flying First and Business Class. Gulf carriers with their propensity to spend big are well positioned to drive the trends.

Courtesy Etihad Airways

Courtesy Etihad Airways

Etihad’s Residence has demonstrated how far one can go, and airlines are upping the ante to set a new benchmark for premium travel, though not necessarily at the same extreme level. Flat beds and oversize TV screens are becoming a norm. It is no longer adequate to have just wider seats and pitch between seats, but more personal space all around. Privacy will also become the new standard. Air France’s new La Premiere suite will provide 3m2 of personal space. Emirates offers private suites in First Class. American Airlines have also revealed plans for hotel-style suites.

The International Air Transport Association (IATA) reported a 3.8-per-cent growth in premium travel in April year-on-year. A company statement said: “The outlook for premium travel markets is broadly positive. Global business confidence continues to signal economic growth, and May data suggests that conditions could be picking-up after a slowdown in Q1. In particular, improvements in advanced economies will help sustain growth in premium travel ahead, as should easing downward pressure from emerging markets like China.”

Who says that the romance of air travel is dead? Not now, as the race among airlines to lure back premium travellers begins to heat up.

This article was first published in Aspire Aviation.


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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