Why premium economy is more important to airlines and travelers than ever before

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Singapore Airlines earlier this month unveiled a revamped cabin service for its premium economy passengers, and it's part of a wider trend.

Long-haul premium economy is becoming increasingly important to airlines. That's because leisure travelers have been willing to travel more on vacations and business trips in recent years. Still not fully recovered to its pre-epidemic demand levels.

Demand for premium economy is growing, making competition for those midmarket dollars more intense as travelers become more aware of what to expect. Carriers around the world are aware of the growing interest and are increasingly investing in cabin class.

What is Premium Economy?

In this case, premium economy refers to long-haul flight products that sit between standard economy and business class. Confusingly, many airlines call economy seats with extra legroom „premium economy” on domestic flights, but here, the term refers to a separate cabin with larger seats and often superior service.

„Premium economy is the 21st century version of business class. Business class originated in the 1980s as a transitional cabin between standard economy and first class, and now premium economy is a transitional cabin between standard economy and business class,” Henry Hartveldt, a travel industry analysis firm at Atmosphere. head of research, told USA TODAY. . „It's available to passengers at a much lower price than business class.”

What passengers should expect when flying in premium economy

Joe Loy, a physician in Charlotte, North Carolina and frequent American Airlines flyer, told USA Today that premium economy is often a better overall experience than flying in coach.

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„Usually the best seats, that's kind of the biggest plus, I can relax, put my feet up – preferably shoes,” he said. „Sometimes enhanced food options, alcohol, things like that.”

Premium economy on long-haul flights typically has larger seats than economy, as Lai noted, more legroom, more padding and more extensive cabin service compared to the standard economy offering.

For example, Singapore Airlines serves its premium economy meals in ceramic dishes with metal cutlery.

But as Hartvelt said, premium economy is meant to be a bridge between standard economy and business class, not a competing product for fancier cabins.

„It's definitely better, definitely better than standard coach,” he said, but „passengers shouldn't expect a luxury experience in premium economy. It doesn't offer the same level of comfort, privacy or attention you'd find in business class.

For airlines, finding the right balance between expanding comfort and service without stealing their own high premium demand can be tricky.

„How do they create a product that's good enough to get people to trade up from economy, but not so good that people trade up from business class?” Hartvelt said. „When airlines introduced lie-flat seats in business class, they made first class almost irrelevant.”

He said that while the seats used by most carriers are more or less standardized across the industry, different airlines think differently about their premium economy cabins.

„It's interesting to see where the airlines place their emphasis: Is it the economy side or the premium side?” Hartvelt said. “Some airlines are going to offer above-average legroom in their premium economy seats, and they might otherwise have fewer seats throughout the cabin. Some airlines are going to say, 'It's definitely better than economy, but we're not going to have a dedicated lounge for you, we're not going to have flight attendants dedicated to your cabin.' „

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For those perks, Harteveldt said passengers can expect to pay 50% more than a regular economy fare on the same flight.

Lai said he often looks for opportunities to upgrade to premium economy, especially on longer flights.

On a recent trip to New Zealand, he paid just $250 to upgrade from extra-legroom economy seats to premium economy. He said the cost was „totally worth it” because the extra legroom and larger seats allowed him to sleep more easily.

Why Premium Economy Matters to Airlines

Premium economy is increasingly important to airlines' bottom lines emerging from the pandemic.

„A lot of people are booking premium cabins very quickly, so we've seen a lot of demand for premium cabins coming out of the covid-19 press event in Singapore earlier this month to launch the carrier's new premium economy service concept,” said Siva Govindasamy, divisional vice president of public affairs at Singapore Airlines. Premium Economy, in particular, has been very popular with our customers since we introduced it in 2015.”

For Singapore and other airlines, that reputation means spending more to attract customers to purchase premium economy seats.

“As a result we have a premium economic investment, an increase in the budget. We think it's a good investment because it ensures premium economy remains competitive and provides better value to our customers,” Govindasamy said. „You've got more amenities, more comfort, more space; now you have even better food, even better drinks and champagne. As seen from our customers' feedback, it brings value premium economy.

Hardeveld said long-haul airlines are more at risk than their peers because they don't offer competitive premium economy products.

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„When an important airline starts doing something, the airlines that don't offer it stand out and often in a negative way,” he said. „Some airlines are expanding premium economy, adding more seats to the cabin, showing that the airlines are financially successful.”

Zach Victor is a travel reporter for USA TODAY in New York. You can reach him at [email protected]

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