Qantas and Cathay Pacific latest carriers to adapt premium cabins to ‘the new normal’

The economic downturn and the resulting sharp decline in premium business travel is forcing network carriers to re-think the seating configurations in their long-haul aircraft. As recovery seems not to be coming soon, airlines one by one are taking steps to rightsize their premium seating. For example airlines with a relatively large exposure to business travel, such as Lufthansa, BA,  and Qatar Airways, have already reduced their premium seat capacity, while Air France says it is accelerating the roll-out of its new premium economy class to appeal to cost-conscious business travelers.

Qantas is the latest airline to announce a reconfiguration of its long-haul fleet, saying it will replace a number of first and business class seats due to the drop in premium demand. About 15% percent of premium seats are expected to be cut. According to Qantas CEO Alan Joyce “it is very clear the productivity is not right – we have too many premium class seats on many aircraft.” Joyce admits the reconfiguration of aircrafts may cost the company “a lot of money”, but says the plan will provide “a better revenue-generating alternative.” Earlier this year, Qantas already suspended its First Class cabin on several routes, upgrading  some business class passengers to First Class instead (with business class catering) at no extra cost.

Cathay Pacific also announced recently it will replace 14 business class seats with 27 economy seats on 12 B777-300s, which mainly fly regional Asian routes, to match capacity with demand. The carrier has already started the reconfiguration programme, which it expects to be completed by year-end.

Meanwhile, what really worries all major international carriers at the moment is that the current downturn is likely to result in a structural decline in business travel, because of more austere corporate travel policies and advances in videoconferencing.

Update 26 November 2009: More signs of the economic times: According to Business Traveller, Lufthansa will suspend first class on five long-haul routes from Frankfurt for the winter period. The aircraft will not be reconfigured the planes during this period, so some passengers will be assigned a first class seat (albeit with business class service) for the price of a business class ticket. Lufthansa says the move in no way implies a departure from its first-class offer, as it will unveil a new First Class in 2010 with the introduction of its first A380.

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