The big deal about extreme luxury

IT is a big deal in the Middle East as the Gulf carriers, notably the Big 3 of Emirates Airlines, Etihad Airways and Qatar Airways, race to outdo each other in offering extreme luxury in the air. (See Extreme luxury: What price prestige? Jun 26, 2014)

Courtesy Qatar Airways

Courtesy Qatar Airways

Ever since Etihad introduced the Residence, a super-class three-room suite made up of a double bedroom, private bath and shower, and a lounge and bar area, the rivalry has intensified and become embittered somewhat with acrimony. While Emirates is working on a new bedroom concept to match, Qatar Airways is planning to introduce double beds in business class that, in the opinion of its chief executive officer Akbar Al Baker, will be better yet less costly than its rivals’ first class products.

Mr Al Baker said: “We always raise the bar for our dear friends around the area to try to copy us. We will have a double bed with only a business-class fare.”

While not choosing to go the Etihad route of offering the flying apartment, Qatar aims to turn the tables on its regional rivals by re-inventing the business class product to make it the ultimate marketable luxury that may even replace the so-called first class. Mr Al Baker added: “This will be a product that will be unrivalled in our industry. When you introduce that into the aeroplane, I really don’t think you need a first class.”

It is interesting how this actually reflects the erstwhile development of the business class following its emergence in the ‘70s while the first class was still a viable segment. As the product became more popular, some airlines began downsizing the first class cabin, even eliminating it altogether, in favour of enlarging and improving business class. So literally, the business class is as far up the status as you can go in the absence of first. What’s in a name anyway?

Then it was a case of the business class being good enough, better than coach but not that much lesser than first. Qatar is boasting that its new business class will be better than its rivals’ first class, so that’s where it will force the competition to shift its focus.

However, that does not necessarily detract from the fact that there may well be a niche market though limited for the flying apartment, as Etihad reported it has been fully booked out. But is it a market worth vying for, but for the reputation of leading the game in extreme luxury? There is a price for prestige. Major airlines outside the Middle East are probably grateful that the rivalry is confined to the Gulf region, even relieved that the Big 3 are engaged in outperforming each other to the extreme. Those airlines could do better focussing on the market at large, and for them, Qatar`s intention to fight the real battle in the business class arena instead poses a higher threat than Etihad`s Residence that comes complete with the desirable but dispensable services of a Savoy-trained butler as well as a chauffeur on ground.

There may be a parallel development in the international aviation scene. Premium travel suffered a major setback in the 2009 economic meltdown and continues to drag its feet in recovery. But major airlines that used to thrive on this segment remain hopeful. What prestigious airlines does not operate a first class cabin anyway? As if in like fashion, matching Etihad has become a clarion call for Gulf carriers. Singapore Airlines (SIA) for one has introduced Suites on its A380 jets. The cabin boasts what it calls an inner sanctum for privacy and features a double bed. But at 40% premium of the normal first class fare, a source said the product is not performing as well as expected. What SIA must have realized lately is how the crisis has caused more permanent changes to travel trends than hoped for, against a backdrop of budget operations that are beginning to eat into the legendary business that was once deemed to be exclusive.

The risen phoenix out of this muddle of ashes is the premium economy, which though not exactly a new concept has been given a new but more marketable identity by airlines such as Cathay Pacific. Airlines from Qantas to Air Canada are capitalising on the fast growing popularity of this not exactly mid-range product as you can tell by its branding, shifting up in an industry that has shifted down. Lufthansa in its plans for a more robust airline has identified as one of its goals the development of a new premium economy class that provides more exclusivity and personal space, aiming to complete implementation of 3,600 seats by the third quarter.

Now, if Qatar Airways succeeds in making its business class better than its rivals’ first class as envisioned by Mr Al Baker, then, far-fetched as it may seem, with the upward shift the premium economy may evolve into the new business class. That was how today’s business class evolved, from a few seats in the front of the economy cabin partitioned off by a curtain into a cabin of its own, That was how too the premium economy has evolved, from EVA Air’s six seats that were actually economy seats but with a wider pitch because of the structure of the aircraft to Cathay’s dedicated cabin with its own identity. There we go again: What’s in a name anyway?

As for extreme luxury, it is a game best left for the cash-rich Gulf carriers. But Qatar Airways is not playing. The real competition is a rung or more down. So Qatar shall instead attempt at re-writing the rules for business class travel. Economy class passengers will also enjoy new and better perks quite unlike any offered by other airlines, at the new Hamad International Airport in Doha, where Qatar Airways is based and which is scheduled to be fully opened by April. The terminal features “Airport Nodes” that provide a play area for children, a family sleeping area, and internet access. The mantra behind Qatar’s strategy is probably best rephrased as a question: Is there any reason to pay more?

This article was first published in Aspire Aviation.

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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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