Are airlines pulling first class too soon as luxury bookings boom?

travel

While tough economic conditions have led to a reduction in the number of economy seats booked for business travel, first and business class flights bookings are on the rise. The question is have the growing number of airlines that have dumped their first class seats acted prematurely?
Qantas' A380 first class cabins are known for providing all the creature comforts | Source: supplied W

The data by Flight Centre subsidiary, Corporate Traveller, showed that first class bookings increased by 107% and 26% for business class seats for the first half of the year compared to the second half of 2022. But it was another story for budget-conscious business travel, with premium economy seats down 41% and economy bookings decreasing by 20% for the period.

The boost in first-class and business class passengers this year begs the question: have the growing number of airlines that have abandoned their first offering acted too soon? Airlines such as Air New Zealand, American Airlines, Malaysian Airlines and others have dropped their first class offering, citing a lack of demand for the luxury flight experience, but Corporate Traveller says companies are still willing to splurge of first class and business class travel, despite the economic environment.

Corporate Traveller global MD, Tom Walley, says the results are “surprising given the current climate”, however for many businesses  “flying isn’t a luxury, it’s a necessity for business success and survival”. 

Corporate Traveller global MD Tom Walley says businesses are still looking to splurge on first class business travel | Source: supplied

“First Class bookings have doubled over the past year, and traditionally cheaper seats – Economy and Premium Economy – are lower. This shift in travel preferences shows that business travel remains a priority for SMEs, and that businesses have room in their budgets to pay for luxury on their trips.”

Airlines that have invested in their first and business class offerings may have predicted the trend. Qantas, for example, offers first class on the A380 superjumbo, but a new first class experience is planned for 2025 on board the ultra-long range Project Sunrise A350  jets, which will fly non-stop from Sydney and Melbourne to the likes of New York, London and Paris.

Passenger booking habits have noticeably changed since the first half of 2022, following the reopening of international borders.  Corporate Traveller seat selection data for that period showed that while economy and premium economy bookings rose 30% and 60% respectfully, business and first class bookings fell by around a quarter.

Singapore Airlines’ A380 is known for its high-class first and business class option | Source: Getty

“This spending behaviour can be put down to a sense of trepidation shared by businesses who were starting to travel again after the pandemic. Businesses were being more cautious with their choice of seat selection; in fear they would have to cancel last minute. 

 “This makes the findings from the more recent set of data, particularly the huge rise in first class bookings, even more encouraging. It shows just how far the SME sector and the travel industry have come in a year – with confidence bouncing back strongly,” Walley says.


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