Spotlight On: Travel Classes – How are they Travelling?

White Papers 29 May 2017

As part of the 2017 Business Travel Trends, FCM Travel Solutions New Zealand is putting a spotlight on how business travellers are flying. 

Travelling by air is one of the few class systems left in the world. With more choice than ever before between airlines and what each aircraft offers, it makes sense that more business travellers are flying nearer the front of the plane.

In 2005, economy class dominated the business traveller market with 78 per cent of FCM New Zealand’s travellers ticketing in this category. Today, this figure has dropped to 70 per cent, making way to the rise of premium economy and resurgence of business class.

It hasn’t been a smooth decline however, with 2010 and the global financial crises having an impact, with economy class tickets jumping to a dominating 84 per cent.

So why the rise of the premium business traveller? Why is the class, originally designed for the business traveller back in the hay day, making a resurgence? Time to put a spotlight on travel classes.

Productivity gains

Clearly travelling in premium economy or business class is more comfortable. It’s argued that travellers are more well rested and able to ‘hit-the-ground-running’ when they arrive at their destination. This is obviously an advantage for the business traveller, who is often on a strict time frame. They can be more productive when they arrive, often stepping from the plane to the boardroom.

However, lets dig deeper into these advantages. A premium check in service and dedicated customs line ensures less waiting time in queues, which in turn means the business traveller has more time to work at the airport if required.

Let’s look at lounge access. Whilst it’s nice not to sit on a hard bench and check emails, the premium and business class lounges provide far more opportunities for productivity gains than just the coffee. High speed WiFi, business centres, quiet zones and attentive cabin crew ensure the business traveller has access to essentially a remote office. There’s personalised service and final boarding calls, which allows the traveller maximum time in the lounge prior to boarding.

Again, premium lines at the aircraft ensures direct access to the plane and many airlines are navigating the way of inflight WiFi – an office in the sky.

Let’s not overlook the on board comforts. The quality of this category has increased dramatically. Ergonomically designed seats provide maximum comfort for working and the lie-flat beds on many business classes potentially gives the traveller their eight hours sleep (not to mention the savings of a hotel room for the overnight flight).

Priority luggage ensures the business traveller then steps off the aircraft to waiting luggage, ready to begin their next journey to the international office.

Looking back at these advantages combined, it’s hard to deny the productivity gains achieved by flying a class or two up.

More choice than ever before

The introduction of premium economy was a game changer for the industry. The improvements are rapid and more airlines are continuing to adapt and bring this class on board, which gives a financially viable option for the business traveller, bridging that gap between economy and business.

This is demonstrated in the leap from just 0.2 per cent of FCM New Zealand’s tickets in 2005 to 8 per cent in 2016.

So now the business traveller has choice across a range of classes and airlines that suits their needs and with that comes competition from the airlines. Competition not just in the form of airfares, but what’s on board also.

Airlines have increasingly benefited from a more fuel efficient aircraft, lower oil prices and opted for alliances, rather than investing in expanding their own physical footprint globally. This has lead to increased profit.

Airlines have also seen significant increase in competition, which has created downwards pressure on pricing. This is helping stimulate demand for leisure and business travel as major carriers chosen to re-invested profits into their fleet.

Loyalty schemes are key for airlines, however will not retain customers alone. Competition brings with it the need to remain at the forefront of customer experience. The is all positive news for travellers.

With airlines increasing scheduling and competitive price points, previous economy travellers are taking the step up and gaining so many benefits for just a fractional increase in airfare.

A changing market place

The world is very much connected, however the need for business travel is continuing to rise. Businesses are expanding and they’re expanding globally. This means people are having to travel further to meet the demand of their business, which has helped aid the business class category’s resurgence.