The Wall Street Journal reports: "a new hybrid class, called premium economy, is appearing on more planes due into its attractive economics. The seats generally give passengers a bit more space than traditional coach and often come with extra amenities like better food. Tickets are pricier than for basic economy, but still much cheaper than flying up front.
For carriers, the whole package costs much less than business class. That means they only need to spend a bit extra to generate higher fares than tourist class and can still pack in seats. Airline executives say it can be the most profitable cabin".
The favorable equation is part of what prompted Deutsche Lufthansa AG to start rolling out a new premium economy section on all intercontinental flights as of this coming October. "It will be a very profitable product," said Jens Bischof, Lufthansa's chief commercial officer.
Airlines, like passengers, fret about space. Fliers want as much elbow and knee room as possible, while carriers want to make optimal use of each square foot. Lufthansa's new seat gives passengers up to seven extra inches to stretch their legs, and four more inches at shoulder-height because each row has two fewer seats than in traditional economy class. There are no shared arm rests.
Lufthansa's new seat takes up about 50% more floorspace than a traditional economy seat. The incremental cost of other extras, such as one additional checked bag, meals served on china tableware and an amenity kit, is proportionally less, Mr. Bischof said.
A round-trip premium economy ticket will average €600 ($824) more than basic economy.
Boeing Co. now delivers more than 30% of its top-selling 777 intercontinental planes with premium economy seating, and the proportion is rising, said Kent Craver, a director of cabin experience and revenue analysis at Boeing. Ten years ago, no new 777s had the seating.
Even more old planes are being updated with premium economy, although the total isn't tracked. Lufthansa, for example, plans to install the cabin by late next year on 106 long-haul planes, most already in its fleet.
By 2009, about a dozen airlines offered special economy service and today almost twice as many do, said Chris Emerson, senior vice president of marketing at Airbus GroupEADSY -0.88% NV. "Flights are fuller than ever, so there's a renewed interest in capturing high-fare traffic," Mr. Emerson said.
