Premium Economy Failing to Attract Business Travellers

Premium economy continues to underwhelm corporate travellers, a recent report from business travel consultants 4th Dimension has found.

The steady growth in the adoption of premium economy class by travellers is still to be felt in the corporate travel market as most companies are yet to incorporate it into their company travel policies according to the report by 4th Dimension, Flight Centre Travel Group‘s (FCTG) business travel consulting division, which found that despite the increased demand, product availability remains sporadic, potentially inhibiting its desired growth. This is especially evident in the corporate market, as business travel policies remain skeptical to propose premium economy.

Premium economy was pioneered by Taiwan’s EVA Air in the early 1990s and is being progressively rolled-out by airlines on medium and long-haul aircraft around the world.

READ: We Review Cathay Pacific’s Premium Economy Between Hong Kong & Kansai

“Premium economy is perfectly placed between economy and business class with its enhanced legroom and service amenities,” says Melissa Elf, FCM Travel Solutions’ general manager Australia. “However, we’re seeing companies largely still choosing the more traditional options of economy class for flights under six hours and business class for overnight or over six-hour flights.”

A poll by FCM found that for one-third of clients surveyed premium economy was part of their travel policy and a further 5 percent were considering it.

Premium economy continues to underwhelm corporate travellers, a recent report from business travel consultants 4th Dimension has found.

Singapore Airlines Premium Economy

4D’s report found that corporates most commonly fly in premium economy between Europe and North America, within North Asia and between Australia and Singapore.

Between New York and London premium economy seats were found to be 13 percent of total airline supply with business class fares of US$8,725, premium economy US$3,219, and economy US$2,863.

Between Sydney and Singapore premium economy seats were 7% of supply with business class fares of $6,281, premium economy $4,187, and economy $3,996.

READ: We Put American Airlines’ Flagship First Through its Paces

“Whilst containing travel program costs is important for many, an increasing number of corporate clients are becoming travel-centric in placing greater emphasis on traveller comfort for long-haul travel,” says Elf. “Premium economy is a viable option where it is available and suitable for those going straight into meetings upon arrival.”

The report says that airlines globally are at various stages of either increasing the number of premium economy seats on new routes with more available fleet or introducing the product for the first time.

Emirates Airlines is looking at the possible deployment of premium economy from mid-2018, and American Airlines is expected to fit up to 104 aircraft with the cabin (pictured above) by the end of 2018.

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The Art of Business Travel is Asia-Pacific's leading portal for corporate travel news and views. We cover everything from airline routes and airport developments, to new hotels, meeting venues, loyalty schemes, and entertaining.