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Airline Mismanagement

International first class travel is outrageously expensive, and while the price of this luxury continues to increase, business class comfort gets closer and closer to first class.

So why pay twice as much money for first class when business class offers an almost identical experience and comfort?

 
 
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Who Flies First Class Anymore?

Lie-flat sleeper bed seats, first introduced by BA in 1996, are increasingly common not only in first class cabins but in business class too.

 

 

The extra cost of business class compared to coach class on international flights can sometimes be startling - many thousands of dollars.  But at least there are some major differences in comfort and service in return for the massive cost increase.

But the further additional cost of first class compared to business class can add still more many thousands of dollars to the ticket price, with much less enhancement of comfort and service.

How much luxury do you need?  With improving business class seats and comfort and amenities, does anyone still need first class?

Where the Money Comes From on a Flight

Running an airline is all about money, so we'll first look at the underlying money issues an airline faces.   Let's examine an imaginary trans-Atlantic flight between somewhere in the US and somewhere in Britain/Europe and see how it brings money in for its airline.

A 747-400 in a fairly typical configuration has 14 first class seats, 79 business class seats and 265 coach class seats, and let's say it has typical fares of $14,000 for first class, $7,000 for business class and $750 for coach class.

If all seats are sold, the airline would be grossing $196,000 from first class ticket sales, $553,000 from business class, and $198,750 from coach class.  Most money comes from business class, and although there are only 14 first class seats on this plane, the potential revenue from them is almost identical to the revenue from 265 coach class seats.

So first class is - in theory - important to an airline, even though the number of first class seats is low.  But let's now consider the real world modifications of these numbers.  The most important real world factor is to recognize that very few people actually pay full fare for their first class seat.  Most people in first class are either flying for free (ie airline employees and frequent flier award travelers) or have been given courtesy upgrades from business class.

The actual percentage of travelers who pay full fare to fly in first class is hard to establish, and varies depending on the route and airline.  Sometimes this number might be as low as 10% - yes, only one or two of the people in the first class cabin have paid for their ticket.

Other airlines estimate perhaps 20% of their first class passengers actually pay for their tickets.  I've flown on some flights where no-one in first class has paid for their ticket (if you get a chance to glance at a flight manifest, this will often show details of the types of fares paid alongside each passenger name, especially if the passenger is flying on other than a regular revenue fare).

So the actual first class revenue is much less than you'd expect, and for most airlines, the most vitally important profit driver is their business class cabin.  First class is their 'loss leader' and coach class is their source of 'top up' income.

These two facts - few people actually pay for first class, and business class is the biggest generator of income - explains why many airlines have discontinued first class entirely.

It also explains why the airlines that have retained first class have focused more on upgrading their business class cabins than their first class cabins.  The most competitive struggle between airlines is for frequent business passengers who actually pay for their business class tickets.

The Evolving Multi Cabin Strategy

When passenger airlines started flying in the 1920s, they only offered one class of service.  To start with, this was a very uncomfortable class of service, but it steadily improved and become more comfortable and eventually extravagantly so.

For example, in the late 1940s Constellations offered sleepers for their passengers - indeed, this picture of the fold down beds on a preserved Constellation seems to show not only a single berth bed on the top, but a double bed on the bottom!

Air travel was not priced as something ordinary people could afford, and so the airlines thought it appropriate to have deluxe service to appeal to the most wealthiest of potential passengers.

Coach Class arrives

With the development of planes capable of carrying larger numbers of passengers - more passengers than existed at the top end of the market, and the reduction in costs per passenger these new planes offered, the airlines realized they could split their planes and passengers into two categories - first class at high price, and a more numerous lower class at lower price, and so we saw the development of the traditional first class and economy/coach class layout.

Appearance of Business Class

This two cabin concept remained untouched until 1979 when Qantas introduced a third category of service - business class.

This recognized that economy class flying, especially over long distances, had become an increasingly uncomfortable and unpleasant experience, and also recognized that first class was 'too expensive' for most normal people who would be prepared to pay more for something better than economy class, but who wouldn't pay the large price differential required to get into first class.

Business class quickly became adopted by other airlines, and the percentage of seats for business class steadily increased, as did the quality of the business class service.

Over time, and as discussed above, the importance of first class started to sink in airlines' strategic thinking, and some airlines discontinued their first class (usually described as 'combining' their first and business class cabins) while continuing to add more features to business class.

Yet another class

Then in 1992, Virgin Atlantic - which previously operated two class services (business or 'Upper' class and coach class) came out with a new intermediate class - premium economy.

This recognized that the gap between coach class and business class - both in terms of experience and expense - had grown almost as wide as the earlier gap between coach and first class.

Other airlines have been slow to adopt this fourth category of service, although British Airways in particular now offers all four cabin types on most of its long haul flights - coach class (their World Traveler cabin), premium economy (what they term their World Traveler Plus), business class (Club World) and First Class.

Most airlines now have two or three classes of service on their longer haul flights, and one or two classes on their shorter haul services.  Shorter flights usually have much less impressive premium cabins, in some cases almost indistinguishable from coach class.

The First Class Experience and Expectation in General

First class is always a stunning disappointment to me.  Like most other first class passengers, I have never personally paid for a first class ticket - with the fare for a typical trans-Atlantic itinerary being as much as $15,000, that is alas out of the question.

Perhaps other passengers are so abjectly grateful to be upgraded to first class as to not view their experience from the perspective of a $15,000 cost, but for me, I always think 'The airline is valuing this as a $15,000 experience?' and measure by that very high standard.

Benefits of flying first class

What do you actually get for your $15,000 that you wouldn't get for the cheapest coach fare, costing perhaps thirty times less money?

You get to save maybe half an hour standing in line when checking in, due to the shorter wait for first class, and then get priority access through security.  You have a slightly greater free luggage allowance.  You get to sit in a more comfortable seat in the first class lounge, and perhaps have a free drink or two (or three....) and some free food there before boarding.

You may get to board the plane slightly more conveniently, you have better food, drink, service, access to toilets, and much more comfortable seating/sleeping (for a flight that seldom exceeds ten hours each way).

Upon arrival, you'll be among the first off your plane, and sometimes your bags might be priority tagged and arrive into baggage claim ten to twenty minutes before regular baggage.

But that's about all.

Benefits are minimal

If you focus on the individual elements of these benefits, they appear even less substantial.  For example, with online checkin and/or automatic checkin machines at the airport, the difference in wait times to check in are not always as pronounced as they used to be.

Even with the reduced limits, few of us exceed our free luggage allowances.

The so-called priority access through security often-times actually takes as long or longer to be processed than the regular line.

You can sometimes buy a one-off admission to an airline lounge for about $50-100.  This is a lot of money by itself, but it is only a very small part of the extra $10,000 or more than a first class ticket costs.

The food and drinks may be better on board, but there's still a chance, if you're last to be served, that they'll be down to only one or two remaining entree choices, and how much premium liquor can you drink on your flight, anyway?  Wouldn't you rather settle for regular airline food but spend $200 on a truly great meal and $100 on some memorable drinks somewhere at your destination?

For sure, the seating is more comfortable, and you may be more rested upon arrival at the destination, but how much is your comfort and time worth?  Is a $10,000 (or more) premium offset by one or two days more billable/productive time?  Or would you and your company be better off to fly you in a lower class of service and give you two or three days free vacation after the flight to recover from the less comfortable flying?

As for being first off the plane, that depends on which door the plane uses for disembarkation.  Often they use the door in the middle of the business class section and people in business class leave the plane first (as if this really matters, anyway).

Lastly, the priority luggage service is capricious and it seems as often as not so-called priority bags either are not tagged (especially if first checking in on a domestic US flight that then connects with the international flight at some intermediary airport) or for some other reason do not emerge until well into when all the other regular bags are appearing on the carousel.

Have you ever spent $15,000 for an improved version of two ten hour experiences?  Other than perhaps heart surgery and intensive care in a state of the art hospital, there's almost nothing else, legal or illegal, that would cost so much yet offer so little in return.

The Airlines Shoot Themselves in the Foot

As the financial analysis above explains, the most important service offered by most airlines is business class.  So, naturally, the airlines have been steadily improving their business class service, while doing precious little to enhance first class (and, in fairness, there comes a point when there's nothing much more that can be added).

When business class first came out, seats were spaced 39" apart - maybe 6" or so more than coach class seats.  They were slightly wider, they tilted back a bit more, and had foot rests.  Food was better than coach class but not as good as first class.

After a couple of 'generations' of improvements with business class seats, they had evolved to having a similar seat pitch (as much as 55") to first class, tilted back almost as far, and the food, while still not as good as first class, was entirely adequate for all but the most demanding gourmand (who wouldn't be satisfied with first class food in any event).

In 1996, British Airways came out with a lie-flat sleeper bed seat for their first class cabins.  When you were seated, awake, it was a regular seat, but it could recline all the way to horizontal, and the leg rest became an extension of the seat, giving you a full length bed.

This created a compelling new reason to upgrade from business to first class, but in 2000, they neutralized this.  British Airways added lie-flat sleeper bed seats to their business class cabins too.  The bed/seats were a bit shorter and smaller, and were more tightly packed in to the cabin, but these were questions of subtle degree.  The basic sleeper bed experience was now close to identical, and for a cost almost half the first class fare.

It is now possible for a passenger to have a lie-flat bed in either business or first class, and almost without exception, all other differences between first and business class have narrowed to relatively trivial levels.

For a while BA had a strong lead over other airlines due to having the only lie-flat business class sleeper beds, but now that other airlines are catching up and releasing their own similar products, this lead has dwindled.

The $5000+ Question - and Reader's Answers

With the differences between business and first class being on the one hand minor (slightly better food, slightly bigger sleeper bed, and little else) and major on the other ($5000 or more in extra fare for the first class ticket), who now chooses to buy first class over business class, and why?

The obvious answer is 'almost no-one' and this answer is reflected in the growing reduction of airlines with first class cabins.

Travel Insider readers typically see little difference in other elements of first class vs business class service.  While some readers preferred first class on planes that did not have the new lie-flat sleeper bed seats in business class, for planes with this seating in both cabins, there was little remaining reason to consider the extra cost of first class.

For example, James writes

The service is about the same.  Maybe the food is better at times, but not much difference.

Mary Lou adds

We have found that most of the time, first class is not much better than business.

And they don't see any extra value in the substantial extra cost of first class.  Carol (who flies in business class, usually on AA) writes

First class is absurdly expensive and not justifiable for a small business.

Cyndi shows herself to be a typical business/first class passenger when she says of her travel to London

I agree with your comment that first has deteriorated...and why pay the HUGE upcharge.  It's really not worth it....besides I use up my award miles for first....I never pay for it!

Ken confirms my thinking when he says

I have flown first class on many of these trips (mostly being 'bumped up' when seats in first were open), and it is quite luxurious.

But it is NOT worth the extra money...especially now that most airlines have business class seats that go to a fully prone position for sleeping.

Reader Trey points out that the differences in service can be very minimal indeed

I went to the Orient this summer from Vancouver and traveled Eva Air Super Business Class. The ticket for their Super First Class was much more expensive and I noticed no difference in service as the business cabin is directly behind the first cabin on the upper deck of a 744. The same F/A handled both classes.

Robert says these issues are appreciated by people no matter what their wealth

I had a number of upgrades to first class in longhaul flights with BA & agree with you.  The difference in cost is NO way justified.  Slightly bigger bed so if you are a large person possibly necessary.  Food & drink & service level very similar.

One time a well known British/ Greek millionaire airline owner joined us in club class, so he too agreed seemingly as if he can easily afford first class but chooses not to.

Reader Peter confirms the most important thing to him these days is the sleeping comfort of the seats

I fly Business Class about 8 times a year, mostly from East Coast USA to S.E. Asia.

I don't even consider First Class because of the added expense. I do look to select the airline based on the quality of the beds.

The "lie-flat' beds on JAL are a plus, and I like Malaysian and Emirates.

Reader Mark has a different opinion on both business and first class

I used to use my SkyMiles to upgrade to first class on Delta. It was very nice, but mostly now I fly AA or BA to Europe and the costs of Business Class or First Class in either real dollars or frequent flier miles has crossed over into the Twilight Zone of fare rationalization.

I can’t eat or drink the $5000+ differential and I don't care how flat they fold, that's just too much money for 4 hours of sleep.

Give me $8 bucks of so so wine, a sandwich and an Ambien and wake me when we get there.

Reader Carl has a similarly practical approach

If it were a choice between first and coach I would go first, otherwise business is great or even economy-plus.

I don't drink booze and don't eat all that much so coach amenities would get me to the destination. It is all about extra room that matters.

Robert has good experiences with BA's first class but still chooses to fly business class

For me First class is only for the super rich or people wanting to blow their frequent flyer perks on a real treat.

Business is more than comfortable enough for an average trip - the food, lounges, and normally great seats that these days mostly turn into beds.

I am a multi million miler on United and have stopped flying with them in business or first as I believe their service has deteriorated so much - for the last year I have only been using BA or Virgin to London - I've been using Northwest to Asia and been pleasantly surprised by how good they are in Asia.

The only exception to this is BA's first class. For me it has always stood out above everyone else's first class. Don't get me wrong I'm very happy in business but if I had limitless money I'd be in BA's first. They cosset and coddle you like no other airline.

The food and wine list is truly superb - if you want to be pampered in the sky BA's first is the place to be.

I have had consistently good experiences the 4 or 5 times I've been lucky enough to be in BAs first. I feel they continue to strive to move first forward in front of anyone else - mind you their first ticket prices reflect that too (!)

Personally my money has been going to Virgin Upper Class recently because I think they offer the best value for money in business with a bit of fun thrown in.  I can't wait for Virgin to start flying domestically in the US.

Richard writes

I would concur with your assessment. The difference between first and business class is inconsequential, except for the price. The level of service, from what I have seen, is not any different. Realizing that there are fewer first-class passengers so maybe a little more attention but my experience says no.

Who Has the Best First Class?

As of November 2006, 36 airlines offer first class on their long-haul international routes, in addition to other airlines with a much lower but still called first class product on shorter haul domestic routes (eg within the US).

The annual survey of these airlines by Forbes gives a good pointer as to which airlines are the best.  In November 2006, they deemed Cathay Pacific as having the very best first class, followed by Emirates, Singapore Airlines, ANA, Qatar Airways, Thai Airways, South African Airways, Malaysia Airlines, British Airways and Gulf Air.

An Unanswerable Question?

So why upgrade to first class?  Who flies first class any more, and why?  The airlines might hope this is a question we don't carefully consider and answer.  But the reality seems clear.

For nearly all of us with normal levels of income and with normal requirements, we are better advised to seek out an airline with the most affordable business class fares and lie-flat sleeper bed seats, rather than pay potentially massive extra costs to fly an airline with similar seats and service but labeled first class rather than business class.

 

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Originally published 06 Oct 2006, last update 19 Dec 2013

You may freely reproduce or distribute this article for noncommercial purposes as long as you give credit to me as original writer.

 
 
 

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