A recently announced plan by American Airlines to increase the number of premium wide-body seats by 45% within the next four years signals that it remains strong than the pandemic’s growth in premium leisure and time travel free is here to stay, analysts say.
“I haven’t seen an empty premium economy seat since I started flying earlier this year,” he said Jason Rabinowitz, an industry analyst and blogger. “While traditional business travel may not recover for a while, if ever, it has been more than offset by leisure and combined leisure and business travel.”
American changes will be made mainly to incoming aircraft. They include the new Flagship Suite, which features a privacy door and more personal storage space than the airline’s existing business class products. New premium economy seats will also be introduced, which will offer double the storage space of the operator’s existing premium economy product along with larger entertainment screens.
Both upgrades will debut in 2024 with deliveries of the Airbus A321XLR and Boeing 787-9 Dreamliner.
The number of premium seats on the 787-9 will increase to 51 Flagship Suite seats and 32 premium economy seats, up from 30 business class seats and 21 premium economy seats on the current aircraft.
The new cabins are also scheduled to begin appearing in late 2024 on existing American Boeing 777-300ER aircraft. These 20 aircraft will be refurbished to have 70 Flagship Suites and 44 premium economy seats, from the current configuration of eight first class seats, 52 business class seats and 28 premium economy seats.
American’s plans would put it behind United and further ahead of Delta in terms of wide-body seat share, unless those carriers decide to make similar improvements.
According to ATPCO data compiled by Rabinowitz, United currently has the highest share of premium seats within its wide-body fleet among U.S. network carriers, at 23.1%. Next is the American with 22.4%. Delta’s ratio is 17.9%.
AA to introduce new premium economy seats in 2024. Photo Credit: American Airlines
Mainline carriers have traditionally filled their front seats mostly with business flyers, but the landscape has changed significantly during Covid. At least for now, managed corporate travel has stalled at roughly 75% of 2019 levels, according to ARC.
But premium seats have been bought by leisure travelers, and the move to luxury products like Flagship Suites may indicate the trend will continue.
Bloomberg Intelligence Aviation Industry Analyst George Ferguson said American’s decision to eliminate its only remaining wide-body first-class product may reflect declining demand for high-end corporate travel. Meanwhile, its plan to upgrade and grow its business and premium economy classes will position it to target the expanding premium leisure travel segment.
Ferguson added that in recent years his sense has been that American has struggled more for high-volume economy passengers than competitors United and Delta. Now, the operator can focus on a better revenue mix.
“To me, it says they’re getting ready to fight again for that premium traveler,” Ferguson said.
As American begins to get widebodies with extended premium cabins, one consequence will be a lower percentage of economy seats in its widebody fleet. That change could result in more expensive economy seats, analysts said, as well as corresponding reductions in premium seat prices. But any such changes would be route-specific and would depend largely on the overall inventory of available seats in particular city pairs, including those offered by other airlines, said Gary Leff, author of the View From the Wing blog.
Leff said American has not announced any plans to change the configuration of its wide-body Boeing 777-200s, nor its existing fleet of shorter 787-9s and 787-8s. He doubts the carrier will eventually retrofit those 787-9s, but even if it does, it will still have the fleet flexibility to put planes with a higher percentage of premium seats on routes that attract the highest percentage of passengers. premium business, entertainment and entertainment flyers. while using wide-body aircraft with more economy seats elsewhere.
“It depends on matching the aircraft to the demand,” Leff said.
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