The Return of First Class
WITH the downturn in the economy, business travel, while never exactly the lap of luxury, lost what little lap it had left.
Those who are still traveling -- and many are not -- often are relegated to the confines of coach, unless they are lucky or wily enough to score an upgrade.
But weary road warriors can take heart: First class, once the province of the wealthy or the savvy frequent flier, may be back within reach, thanks to an outbreak of fare wars.
Fanning the competitive fires is the dawning realization among business travelers that some low-cost airlines offer some first-class comforts in coach.
And for the long-distance warrior, there’s even been some loosening of fares in international business class.
Two of the so-called “legacy” airlines -- Alaska and America West -- recently lowered their first-class domestic fares in an effort to drive more paying customers into seats that had largely been the territory of upgraded frequent fliers. Their competitors have responded on those routes in which they compete head to head.
“It looks like they are trying to actually collect money to fly first class,” said Terry Trippler, an airfare expert with Cheap seats.com. Trippler recently flew in first class and noted, “I bet I was one of the only ones who paid for it.”
In mid-February, Alaska Airlines, the nation’s ninth-largest carrier, simplified its fare structure. A one-way full-fare coach ticket between Seattle and Los Angeles dropped to $299 from $427. First class cost only $50 more.
Alaska’s move is indicative, some say, of the times in which airlines find themselves.
“This past year we had the highest load factor in our history, but we still lost millions of dollars,” said Greg Witter, an Alaska Airlines spokesman. “Fliers aren’t going to pay the higher prices of old, so we’re taking action about that. Bottom line is we need to get more people on our aircraft, and this is one way to do that.”
It’s unclear whether any of the other airlines will follow suit, but a recent trend in the industry may influence decisions.
“The context for all of this has to be the battle royal between the legacy carriers and low-cost carriers,” said Tim Winship, editor and publisher of FrequentFlier.com, an online magazine for frequent fliers.
Phyllis Schumann, travel consultant and product manager at Wisconsin-based Runzheimer International, an employee travel costs research company, foresees a flattening in the ups and downs of business travel costs because of changes in the purchasing behavior of business travelers. “Most business travelers have learned how to travel differently, like it’s their own money,” she said. “The airlines know that people are doing things differently.”
As a result, “we’re seeing low-cost carriers providing things that they did not provide before,” she said. For business travelers, upstarts such as JetBlue serve up niceties once reserved for first class, such as leather seats, more leg room and in-seat entertainment, all at budget fares.
The competition is taking note and borrowing from those successful strategies. America West’s new first-class fares follow the path led by its simplified fare structure.
“We started with changing our basic fares structure two years ago, and that was a real success, so we started thinking about first-class fares,” said Scott Kirby, executive vice president of sales and marketing at America West.
Previously, only 6% of first-class seats were actually sold at America West. After it decreased the price of first-class fares last month, sales doubled. Even so, Kirby does not think that selling more seats in first is going to negatively affect frequent fliers and their beloved upgrades.
“We are very actively monitoring the program to make sure” the trend toward buying first-class doesn’t upset the upgrade applecart, said Kirby, who said sales of first-class seats had doubled in four weeks. “Even if it doubles, that leaves 85% to 90% of the seats for upgrades.”
Bringing down the cost of first class makes business sense for America West, Kirby said. Many business travelers may have felt justified paying a bit more than a coach walk-up fare to fly in first, but they were priced out of the market.
“First class was outrageously priced relative to coach,” Kirby said. “We tried to restore some of the relationship between coach and first-class fares.” High-end leisure travelers have been among the first to queue up for the lower first-class fares. Fifty-five percent of first-class reservations are being made more than 14 days in advance, behavior more typical of leisure travelers than of business.
Though the first-class fare wars have not caught on for international flights, a new, lower-priced advance purchase fare on some business-class tickets and a blurring of the lines between the amenities in international first and business is making it possible for more travelers to go in comfort.
International leisure and business travelers who can plan well in advance can take advantage of a new phenomenon: advance-purchase international business-class fares, which can cut the price of a business-class ticket by more than half.
“It looked like [airlines] were putting it out as a test because all of a sudden it was there,” said airfare expert Trippler. “I noticed it in January. It’s a good deal. Business class is no longer out of reach for small businesses.” An example: In a recent search, a round-trip, nonstop business-class seat from LAX to London with one-week advance cost $8,321 on United and about the same on several other airlines. With a 42-day advance, that same seat drops to $3,556. In a search on Orbitz, the fare was available on American, British Airways, Lufthansa (with one stop), United and Virgin Atlantic.
Virgin is blurring the lines between first and business with its “upper class suite,” which has fully reclining seats that Virgin says have more leg room and are wider than most international first-class seats. It also comes with an on-board stand-up bar (one bar you don’t want to get thrown out of, Virgin spokesman Ralph Bershfsky joked), in-flight massages and complimentary airport limousine service.
“We compete with business classes and steal some first class,” Bershfsky said. “It’s first-class service at business-class fares. We’ve broken all the rules.”
In this new world of business travel, the old rules seem to no longer apply. And business travelers finally seem to be getting the upper hand, if not always upper class.
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Coach versus business versus first
Here’s a snapshot of the lowest airfares from Los Angeles to the top business destinations from LAX. These were for travel anytime on April 7, returning April 14. These were the lowest available fares in each class on the date searched (March 18) and may no longer be available.
*--* City Coach Business First London $545 $3,294 $13,919 (Northwest) (US Airways) (British) Tokyo $561 $2,921 $5,952 (Northwest) (Northwest) (Korean) Taipei $528 $1,595 $4,625 (Northwest) (China) (China) Seoul $581 $3,015 $6,360 (United) (Continental) (Asiana) Mexico $399 * $909 City (America West) (America West)
*--* City Coach Business First San $183 $363 $363 Francisco (America West) (Alaska, American) (America West) Chicago $176 * $735 (Spirit) (America West) New York $221 $618 $1,022 (ATA) (AirTran) (Continental) Phoenix $88 * $363 (Southwest) (America West) Dallas $263 * $735 (United) (America West)
*America West doesn’t have a business class section, so business/first is the same.
Sources: Worldspan and the Web