A touch of business class: What’s the use of premium economy?

Airlines increasingly rely on premium economy

“Premium Economy has been very well received by Swiss customers,” says Swiss commercial manager Tamur Goudarzi Pour. “We will continue to renew the cabins of our long-haul fleet in Economy, Business and First, as well as Premium Economy, within the scope of the new ‘Swiss Senses’ cabin concept, starting from 2025.” Swiss sister Edelweiss also has a middle class, it is called Economy Max.

Emirates Switzerland boss Juerg Mueller says: “Emirates currently has twenty Airbus A380s in its fleet with the latest premium economy class. “As part of our ongoing $2 billion refurbishment programme, 47 additional A380s, followed by 53 Boeing 777s, will be equipped with the latest cabin product.”

Mueller says business is going very well, with planes departing from Dubai to long-haul destinations like Sydney, Singapore and Auckland, with other destinations like Mumbai and Tokyo coming soon. “We see great demand potential in the Swiss market and believe that premium economy can be sold successfully from Zurich and Geneva.” Emirates has not yet announced when the new class will be introduced to the Swiss market.

But the entire airline industry is currently struggling with delivery bottlenecks; This means that new flights, including the introduction of new cabin products, can sometimes be significantly delayed.

Switzerland and Emirates are late in Premium Economy

The Premium Eco mid-range is not new at all: providers such as Eva Air from Taiwan are pioneers and have been since the early 1990s. Emirates and Swiss, which previously had three classes Eco, Business and First, are relatively late entrants into the premium eco business but now have four classes.

What is offered in Premium Eco? Is it worth paying a few 100 francs more per flight to no longer sit in Eco? Or does the class generate premium revenue for airlines rather than creating a first-class experience for customers?

Offers vary by airline. Typically, the seats are wider. The backrest reclines more and there is a rest area for the feet. There are also fewer seats per row of chairs than the Eco. There is also pre-boarding, more baggage allowance and better food than Eco. The screens are bigger too.

Aviation expert Florian Dehne from management consultancy Roland Berger says: “Many travelers choose to shop upstream rather than save money. You are booking Premium Eco instead of Eco.” The reason: “You want to treat yourself while travelling; there is strong demand for premium eco tickets.”

Particularly lucrative for premium economy airlines

Airlines rejoice: “For airlines, Premium Eco is the most profitable class per square meter on board,” says Dehne. Although First and Business charge much higher ticket prices, Premium Eco fares better on many airlines when it comes to margins.

The challenge for airlines: While they must offer Eco customers upgrades with Premium Eco, they must not price Premium Eco tickets so high that passengers do not realize the added value and stay in Eco. At the same time, Premium Eco should not be too attractive. Otherwise, corporate clients will wonder why they are paying thousands of francs for their domain when they have almost the same service behind them.

For this reason, there will be no seats that can be expanded into a bed in Premium Eco. This is and will remain standard on Business and First. Premium Eco seats also do not have partitions between seats to provide more privacy. This can increasingly be seen in business class: each passenger has a small, separate place to hide.

“Premium Eco is valuable for people with five to six hours of flight time,” says aviation consultant Dehne. “Of course, it makes less sense on short trips.” According to him, typical premium eco customers are not only eco-ticket buyers who want more comfort, but also corporate customers who offer more to their employees but do not want to pay for business due to cost.

Premium Eco tickets are significantly more expensive than Eco prices

What about costs? Flight ticket prices have generally increased significantly. The situation is the same with Premium Eco. According to a survey by comparison platform Kayak for “Handelszeitung”, ticket costs for premium economy increased by around 5 percent in the first half of 2023 compared to the previous year, but increased significantly less than for business and economy.

However, travelers were paying almost four times more for a return flight in premium economy class than in wooden class, and only a third less than in business class, which is often much more luxurious. Also: The CO2 footprint of a flight in premium economy is larger compared to economy. Guests on Eco need less space on board.

Lots of marketing

When it comes to Premium Eco, airlines prefer to focus on marketing rather than leading the climate debate, always emphasizing getting a little closer to the business class feel and experience.

Emirates says its first-class eco seats are “upholstered in cream-colored anti-stain leather and feature wood paneling similar to business class, along with automotive-inspired stitching.”

Eva Air, meanwhile, praises the “sleep kit” in the Premium Eco, which comes equipped with “moisturizing cream and lip balm, socks, comb, earplugs and sleep mask.” This means customers have “some business class luxury in premium economy class.”