I hadn’t checked in online, so it was a pleasant surprise when the KLM flight attendant showed me to my seat. It was at the back of the business class cabin, a single seat smack in the centre. I usually like window seats, but 4E is super cool. The only standalone seat in the cabin, wide and bulky, it looks a bit like Captain Kirk’s chair, and I couldn’t resist murmuring a Picardesque “Engage,” stealthy hand motion included, as the plane took off.
Then, just before landing at Amsterdam’s Schiphol airport, there was another unexpected treat: The flight attendant came around and handed each of us a little Delft ceramic house modelled on an actual address in Amsterdam – wax sealed and filled with about an ounce of genever – one of 96 you can collect for each year KLM’s been flying.
It’s not often that we think of modern flying in terms of delight. But that’s what airlines have been aiming to do with their aggressive new approaches to wooing business-class passengers, especially in the past five or six years. They have to. They need the money.
Flying is an expensive business, and the airline industry is one of often razor-thin profit margins. According to the International Air Transport Association, in 2013, the average airline made a 1.5-per-cent profit, up from the previous year’s 0.9 per cent. Compared with that, IATA projects that 2015 is going to be a banner year, at 4 per cent. But that number looks less impressive when compared with the average annual profit for U.S. railways (18 per cent), entertainment companies (12.5 per cent) and the pharmaceutical industry (16 per cent), according to New York University’s Stern School of Business. Even the restaurant business, notorious for always teetering on the edge of disaster, makes an average of 9.5 per cent profit, Stern says.
“Business class is an absolutely critical ingredient of the commercial model of most airlines,” says Umar Riaz, who leads consulting firm Accenture’s North American travel practice from New York. In fact, he goes so far as to say that economy seats are often loss leaders. “An airline seat is a fungible commodity. Once the flight has flown, you can’t recoup the revenue.” So, he says, the airlines figure out how much they can make from business class in order to determine how low they can price their economy fares. “Once the business class seats cover the cost, economy is all profit.”
Though individual airlines themselves are tight-lipped about the specifics of their costs, according to economist Julie Perovic, who tracks premium travel for IATA, 22 per cent of airline revenue come from those front cabins. With increased competition driving economy passengers’ fare expectations ever lower, she says, the extent to which airlines can turn a profit, and therefore stay in business, depends heavily on the number of people they can persuade to pay much, much more.
Air Canada’s website, for instance, shows that a February flight from Montreal to Vancouver might cost an economy passenger as little as $756, taxes and fees included, while a business class passenger might pay as much as $6,480.
Perovic said the whole industry hit an air pocket in 2009, when the global economy tanked and businesses all around the world decided they had less money to spend on getting their executives to meetings and conferences in style. Business class bookings declined by about 1. 5 per cent – falling from close to 7 per cent of total international traffic to about 5.5 per cent (and roughly 28 per cent of total international revenue), where it’s more or less stayed ever since.
As a result, airlines all around the world have been improving their business class game to get those Brunello Cucinelli-clad bums in seats. A quick survey of airline announcements shows that Aer Lingus, Air Canada, Air France, Air New Zealand, Austrian Airlines, Azul Brazilian Airlines, Cathay Pacific, Delta Air Lines, Finnair, Hawaiian Airlines, Air France-KLM, Lufthansa, Malaysia Airlines, Swiss International Air Lines and Turkish Airlines have all upgraded or completely redesigned their business cabins, and that’s just going back to 2012.
George Hobica, president of Airfare Watchdog, a division of Trip Advisor, says “airlines are waging a perk war with each other to increase the comfort level and entertainment.”
Turkish Airlines, for instance, has recently begun offering free WiFi to its business class passengers, a service other WiFi-capable airlines still charge for. Finnair’s business class table settings are now supplied by Finnish design firm and cult favourite Marimekko. Air Canada just signed up Vancouver celebrity chef David Hawksworth to, according to marketing vice-president Craig Landry, “inspire a new line of dishes” for the business cabin. (They also have espresso machines.) And every airline is trying to outdo every other with its ranges of wines and liquors. American Airlines offers fresh-baked cookies. Bose noise-cancelling headphones are now practically industry standard.
If you were to add up the cost of all of these nice little extras, it would barely put a dent in the business class fare. What the airlines are trying to do is create an ambience, a special and intentionally exclusive experience, whether it’s upstairs or behind that drawn curtain, that attracts people who are willing to pay a premium price, and keeps them coming back.
I’ve travelled in business class cabins on a lot of airlines, and I’ve found that being offered a few perks can have a profound effect on my opinion of a company. The service Qatar Airways provides – with its check-in counters far away from the lines in a lounge-like atmosphere, staff who know you by name and the best glassware I’ve seen on a plane – has cast a glow on the company that has not diminished, despite the airline’s continued sponsorship of the scandal-plagued FIFA World Cup. Turkish Airlines’ business class lounge in Istanbul, with its two floors, roving massage therapist, cinema and model race-car track, when added to the on-board menu that proves airline food absolutely can be fabulous at 10,000 metres, has made it my favourite airline, even when, as mostly happens, I fly economy.
Adam Smith mostly doesn’t fly economy. The Calgary-based investment banker made a promise to himself, after a sleepless all-nighter to Italy when he was a student, never to fly economy again, at least not on long hauls.
Smith, who flies more than 100,000 kilometres a year, said he doesn’t like what he calls “the hassles inherent in modern air travel,” and business class is as close as he can come to erasing them. The extra elbow room allows him to work, and when he’s done, the lie-flat seats allow him to rest before the meetings he’s flying in for. And though most of his travel is for work, the benefits of business travel spill over into his leisure travel, too. Recently, a flight he had booked for himself and his fiancée from Calgary to Reno via San Francisco was delayed, putting them at risk of missing their connection.
A true frequent flier, he explains why those who can fly business class do.
Economy-class passengers, he said, were told to use the United Airlines app to find alternatives. But because he’d paid for business class tickets, “the check-in agent spent 20-plus minutes working with me to find alternatives, and eventually rebooked us on a series of [Delta] flights.”
In short: You get what you pay for.
“I think a lot of people complain about the 1 per cent and all the luxuries that airlines are lavishing on business class while economy class gets more cramped,” Hobica says, “but I think it is true that business class fares do subsidize the low fares you see in economy class.”
Though airfares have increased, on average, by 2 per cent compared with a decade ago, according to IATA, the organization says they have fallen 37 per cent from 1985, and 78 per cent from 1965. That’s a drop that’s allowed a far greater number and range of people, with a far greater ranges of incomes, to travel than has ever been possible.
It’s something to keep in mind the next time you get grumpy – as I always do – having to wait until every last business class passenger has exited the plane. Trickle-down economics has been shown to be a sham, but in the airline business at least, we seem to have come up with a pretty tolerable symbiosis.
What you get
Seat width: 53cm
Lay-flat length: 203cm
Champagne: Drappier Carte d’Or Brut
Food: In consultation with Chef David Hawksworth of Vancouver’s Hawksworth Restaurant.
Entertainment: 46cm screen; Phitek noise-reduction headphones
WiFi: Some domestic flights, extra charge
Extras: BMW 700-series airside shuttling for certain connecting customers.
Seat width: 56cm
Lay-flat length: 196cm
Champagne: Taittinger Prestige rosé; Billecart-Salmon Brut
Food: High-end Middle Eastern fare
Entertainment: First dual-screen interface (on A350, A380 and B787 aircraft) for multitasking; use a handheld device while you watch movies on the seatback unit
WiFi: Not on flights from Canada.
Extras: Pyjamas, often only a first-class perk. The world’s second best lounge (in the writer’s considered opinion, at Doha’s Hamad International Airport).
Seat width: 48cm
Lay-flat length: 188cm
Champagne: Gosset Brut Grande Reserve
Food: Made-to-order Turkish coffee
Entertainment: 40cm screen with close to 350 films and short programs
WiFi: Yes, free
Extras: World’s best lounge (in the writer’s opinion, at Istanbul AtaturkAirport)
Seat width: 76-86cm
Lay-flat length: 193cm
Champagne: Taittinger Prelude Grand Cru
Food: Extended “book the cook” advance menu of 60 mains available for pre-order.
Entertainment: Phitek ANR noise-reduction headphones. Video offerings include “red-eye” specials – entire seasons of TV shows; they were bingeing before bingeing was popular.
WiFi: All long-hauls (extra charge)
Extras: Pre-takeoff Singapore Sling
KLM (World Business Class)
Seat width: 50 cm
Lay-flat length: 207cm
Champagne: Nicolas Feuillatte Brut Réserve
Food: Michelin-starred chefs rotate in their consultations, most recently, Onno Kokmeijer of Amsterdam’s two-starred Ciel Bleu.
Entertainment: 43cm screen;
WiFi: Not on flights from Canada.
Extras: Little Delft houses filled with genever; “Captain Kirk” chairReport Typo/Error
Follow us on Twitter: