By contributor
updated 10/13/2010 9:36:35 AM ET 2010-10-13T13:36:35

For corporate road warriors and luxury-focused leisure travelers, it’s often comfort, not cost, that rules.

But in the current economic downturn and flurry of mergers, first-class and business-class airline seats may be an endangered species.

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Southwest Airlines recently announced that after its planned merger with AirTran Airways, it will not continue premium service on AirTran routes now offering it.

Rahsaan Johnson, a spokesman for United Airlines, said the company has not decided whether it will keep first class on international fights, like United now has, or shed it, like Continental Airlines, which offers a combined business/first class, when the two carriers merge. Both currently offer first class on domestic flights.

“It is a very important differentiator,” Johnson said, and upgrades “drive significant loyalty.”

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The future of premium seating
“It’s the key to profitability for many airlines,” said Steve Lott, a spokesman for the International Air Transport Association, a trade group. In the first half of this year, passengers traveling on premium seats represented less than 8 percent of the total traffic but contributed up to 27 percent of passenger ticket revenues, according to the association’s most recent monthly report that tracks international traffic in first and business class.

“Airlines need to pay close attention to passengers who are prepared to pay a premium,” he said, by upgrading products and services like meal and wine service and entertainment offerings that include amenities like Bose noise-canceling headphones. The bar is always being raised higher and higher. Today, it’s the race to install lie-flat beds, he said. “One of the few places where airlines can highlight their differences is in the premium cabin.”

Scott D. Nason, a former American Airlines executive, now an aviation consultant, said many carriers are improving business class but have eliminated first. “Business class sells and first class by and large does not,” he said.

Some carries keep first class to sell business-class seats by offering upgrades or as leverage. If two airlines vie for a corporate account, the carrier with first class may win the account. And business class upgrades drive sales in economy, too, Nason said.

Jim Strong, co-owner of Strong Travel Services in Dallas, said that kind of philosophy has backfired.

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“The fact that premium class seats are much more accessible at a lower price point through frequent flier miles and discounts hurts the airlines in lost revenue and customers because of lessened value,” said Strong, who belongs to Virtuoso, an invitation-only membership organization of travel agencies who specialize in selling luxury travel.

Good for the consumer
Some airlines are eliminating first class, but others “are upping the ante by investing a lot of money so they can improve products and luxuries for premium passengers,” said George Hobica, founder of

Related: Where luxury and flying go hand-in-hand

Emirates has showers on some aircraft, making it a kind of “ultra, ultra first class,” Hobica said, and Singapore Airlines has “an incredibly wide business class seat — you can fit two people in it,” he said. “It’s always been a game of one-upmanship.”

Competition spawns variety and choice, which is good for consumers, Hobica said. “It’s kind of like the hotel industry with different brands and strategies. You can take a Ryanair or a Singapore, depending on your budget,” he said.

Some carriers like United and British Airways have not only kept first class but also introduced a fourth class of service, premium economy, a kind of hybrid  between coach and business that offers more cabin space, larger seats, extra leg room and more services than standard coach, Hobica said.

“More services, more comfort, that’s what everyone wants,” said Barbara Nichuals, president of Bayside Travel and Gramatan Travel, in Westchester County, N.Y.

Nichuals, also a Virtuoso member, said the merger between Continental and United “is going to be an advantage, especially for customers with frequent-flier accounts. It just broadens the options for travelers.” On the other hand, she said there is worry that less competition will impact prices.

“I believe first class international is generally on its way out,” said Jay Sorensen, president of IdeaWorks Company, a consulting firm for the airline industry.

“Premium economy will become more pervasive — it's the perfect compromise between the pain of long-haul coach and the painful prices associated with business [class],” he said.

Losing the edge
“What you see is the addition of premium economy because that’s profitable,” said Henry H. Harteveldt, travel analyst for Forrester Research. “I think what’s going to happen is the airlines are going to raise economy fares, offer more aggressive opportunities to upgrade via e-mail and at kiosks, increase the size of coach cabins, shrink business-class cabins and reduce or eliminate first class, “ he said.  As a result of fewer premium seats, there will be fewer upgrades or free frequent-flier seats, which will increase profit margin.

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But he said he worries about reaching the “tipping point.”

“If U.S. carriers continue to cut back in just about every way possible,” they risk losing their competitive edge, and as a result, high-end customers. “People do want to be comfortable on planes and will pay,” he said.  “U.S. airlines used to be leaders in reliability and quality. But now, at best, they are middle of the pack,” he said. “Service is often seen as an expense instead of an opportunity.”

Jonathan Friedman, general counsel of a multinational company, who frequently travels internationally, said most American and foreign carriers have made improvements to seating and entertainment programming in recent years, but there remains a huge difference in service on board and at lounges.

“Service is horrible, it pales in comparison,” to European carriers, Friedman said. On a recent trip to London, at the business class lounge at Heathrow of an American carrier, “you had to pay for your own water,” he said. But airport lounges operated by European airlines often provide meals, bar access, and areas to sleep and shower. “It’s night and day,” he said.

A rebounding economy
Peter Belobaba, an airline researcher and manager of MIT’s Global Airline Industry Program, said the future of premium seating is largely contingent on the recovery of the economy and the business travel marketplace. “The quality of premium service is significantly better when there is more competition” he said, “but if the demand does not come back, then all bets are off.”

Darin Lee, a principal at LECG who specializes in the economics of the airline industry said, as a rule, airlines tend to “be forward looking, they invest for the long run.” He said though it is a very cyclical industry, “carriers today are cautiously optimistic.” He said the ones that continued to invest in upgrading their product through the recession in the last two years, “will reap the benefits by having the product to be competitive,” as the economy returns.

Strong, the travel agent, said he thought the merger between United and Continental would ultimately be beneficial to passengers by streamlining services and products. “The Delta Northwest merger is really a footprint for all others,” he said. The airline boosted its image when Northwest’s “stale, unattractive, not user-friendly” product was discarded and Delta’s new premium products were featured. “It’s been noticed by customers,” Strong said. “They want to come back for more.”

© 2013  Reprints

Explainer: Where luxury and flying go hand-in-hand

  • Red-eye flight or luxury overnight stay? Elbow graze with a next-seat neighbor or face-to-face conversation at an in-flight bar?

    The following 10 airlines, presented in no particular order, prove that luxury is a reality, and the only thing impossible is a lack of comfort when soaring 35,000 feet above sea level.

    Related: No more first class? Some airlines mull changes

  • Emirates

    Image: Emirates
    Courtesy of Emirates Airlines

    “Emirates is the most luxurious,” said Maria L. Chandra of, a travel website for women. This Dubai-based airline boasts a young fleet with accommodations unlike any other out there.

    Aside from the new A380 First Class private suites — which are fully equipped with an electronically operated door, mini bar, reading light, work desk, illuminated vanity mirror and room service — there is one additional steamy perk in this 14-suite cabin: onboard showers. Chandra, who has visited 51 countries and traveled extensively by air, was most impressed with this feature. “They were so clean, everything smelled very good, it felt like a spa.” With heated floors, leather seating, and perfumes by Bvlgari, the ambiance in this shower haven is fit for royalty.

    For those traveling in pairs, adjoining center suites in the middle of the first-class cabin have a privacy divider that can be raised and lowered. As for entertainment, the Emirates award-winning Ice entertainment system provides more than 1,200 channels, including live BBC news headlines, with satellite telephone, SMS and e-mail.

  • Etihad Airways

    Image: Etihad suite
    Courtesy of Etihad Airways

    When asked what airline is best, Mathias Friess, CEO of, said, “hands down, Etihad.” This airline is funded by Abu-Dhabi, which according to Fortune Magazine, is “the richest city in the world.” At six years old, Etihad already unveiled its new first-class Airbus A340-600, featuring 12 individual suites and a mere $70 million in recent renovations.

    With extra-large seats, sliding privacy doors and luxury leather interior, Etihad is certainly a cutting-edge aircraft. “Competition for premium customers remains intense ... our investment and product innovation will ensure that we have not simply remained competitive, but that we are the market leader,” Etihad Airways CEO James Hoganin said in a statement.

    The aircraft matches the chief's assertions. In addition to the luxurious personal suites, Etihad offers onboard food and beverage managers to ensure quality delivery and presentation, dine-on-demand options, and special accommodations for youngsters traveling alone.

  • Singapore Airlines

    The A380, Singapore Airlines' newest carrier, takes extra leg room to the next level. “There is a door, so you have total privacy,” said's Chandra, and once you open that door, you see “a bed made up with a down duvet.”

    Sit back on the widest seat in the sky at 35-inches across, watch movies and television on the largest in-flight flat screen and dine whenever you please on tableware designed by Givenchy. The hospitality and service is unmatched and the overall attention to detail is outstanding.

    “Even people who have not flown this airline still believe they are among the best out there,” said's Friess.

    “Overall, it is just a terrific, professional experience,” said Bryan Saltzburg, manager of TripAdvisor and

  • Asiana Airlines

    Based in Seoul, South Korea, Asiana is Skytrax's reigning "Airline of the Year" for 2010. The first-class cabin offers spacious accommodations as well as comfortable, 180-degree transforming seats. “Asiana invested a large amount of money into the new first-class seats,” noted TripAdvisor's Saltzburg.

    Though many of these new perks are route-specific amenities, the quality of service and accommodations on Asiana certainly are comfortable. “My experiences with Asiana have all been memorable and pleasant,” said Todd Dubose of Springdale Travel Agency. “The crew is professional, accommodating, unobtrusive, and gracious. Their check-in is silky smooth, and their lounges very comfortable and relaxing.”

    Skytrax reviewer Alan Biederman agrees. “Amazing lie-flat seats. Duvet covers top and bottom with tuck-in service.”

  • Cathay Pacific

    Image: Cathay Pacific
    Courtesy of Cathay Pacific Airways

    Cathay Pacific, a Chinese airline based in Hong Kong, describes first class as a “suite rather than a seat.” Before the flight, relax in The Wing, Cathay’s exclusive first-class waiting area. “The lounges are an important part of first-class lass travel, providing a quiet oasis or personal work environment before, while connecting to, or after flights,” said Gus Whitcomb, Cathay Pacific's communications manager.

    Visit gourmet eateries, transcendent spas and relaxing reading rooms to ease the nerves before a long haul. And onboard accommodations are sure to wow as well. Passenger Jeff Daniels described the airline as having, “tremendous privacy, [the bed] is extremely comfortable in the sitting and reclining positions, to accompany some of the best food and wine in the sky or on the ground.”

  • Lufthansa

    Do you prefer a chauffeur? If yes, then this airline is for you.

    Lufthansa’s first-class experience is not limited to a typically delicious German brat. Rather, this Frankfurt-based airline boasts an intimate upper deck with eight large seats, which are “striking and very big,” said Skytrax customer reviewer Thomas Anderson. The first of its kind, the Lufthansa First Class Terminal brings service to the next level.

    Upon arrival, you are greeted by a personal assistant that will assist you through security and provide whatever you may need. When it is time to board, forget about uncomfortable shuttle buses with crammed-in carry-ons and limited seating. First-class passengers are chauffeured from terminal to aircraft in a Mercedes, BMW or Porsche, which “has no rhyme or reason, but makes a big difference,” said's Friess, also a former Lufthansa employee.

    “If you want to feel exclusive, they have mastered it,” Saltzburg added. “Transfer is great and unique.”

    Once on board, the comfortable amenities, remote-controlled privacy screen, leather interior and subtle ambiance make this first-class cabin a relaxing retreat.

  • Thai Airways

    “Many of these first-class carriers are focusing efforts on what happens off the plane,” said Saltzburg of But when asked which airline had the best ground services, he said: “Thai Airways far exceeded Singapore’s on-ground service. Walking off the plane and having someone waiting to escort you to the lounge, that is something I truly appreciated.”

    And he’s not the only one. Positive customer reviews and responses flock to this airline. Perhaps it is the Asian hospitality, delicious “Chef on Call” meal service or complimentary spa treatments that leave passengers completely content.

    It depends on what the trip has in store for you. “When choosing the airline, focus on the entire experience. I take into consideration the airport, layover time, food, culture, etc.,” Saltzburg said. “And Thai Airways, for me, set the bar for overall experience.”

  • Virgin Atlantic Airways

    For Sir Richard Branson’s Britain-based Virgin Atlantic, it’s all about the experience. Though Virgin Atlantic is jam-packed with extravagant perks like upscale bar areas and exclusive snooze zones, the focus is not on hardware alone. The focus instead is on the staff, the lounges, the attitude and the experience.

    “Awesome lounges in New York and London, and the attitude is just right,” Friess said.

    “Others have adopted the first-class ground experience that Virgin started,” added  Saltzburg.

    Though the onboard facilities may not be as luxurious as Emirates or Singapore, the overall experience that Virgin Atlantic achieves is the most luxurious aspect of this airline. As for aircraft updates and renovations, Chandra said there are rumors that, “at some point, Virgin Atlantic wants to build an in-house casino and gymnasium.”

  • Qatar Airways

    Image: dessert
    Brett Danton  /  Courtesy of Qatar Airways

    “Qatar used to be minor and now they have made their way into part of the big league,” said Friess. “Qatar is on everyone’s mind.”

    Qatar Airways, headquartered in Doha International Airport, is one of the youngest fleets in the world. For first- and business-class customers, the experience begins in the Premium Terminal, which boasts convenient check-in, meal reservations, spa facilities and more.

    On the flight, enjoy a top-notch, eight-course meal consisting of cheese and sushi plates, foie gras, caviar, and smoked salmon that “is second to none,” according to passenger Dan Beaumont.

    As for post-trip, Qatar offers a lounge in Doha that provides travelers with sleeping cabins and showers. If only in town for a brief business meeting, there is no need for a hotel room; rather, freshen up with a nap and shower in a private room — right in the terminal.

  • Qantas

    Image: Qantas
    Courtesy of Qantas Airways

    While many of the airline websites provide virtual tours of the aircraft, Qantas provides a virtual tour of the Melbourne and Sydney airport lounges. The new first-class lounge in Sydney, designed by Australian industrial designer Marc Newson, provides a relaxing Feng Shui layout with custom-designed European oak sculptures and a spectacular vertical garden composed of 8,400 plants and extending 30 meters.

    Enjoy complimentary facials and massages in The Payot Paris day spa followed by a delicious meal conceived by prominent Australian chef Neil Perry. And not to worry — If you feel like sitting and relaxing until departure, just file requests with your chair-side waiter, who will take care of your every need until you board.

    While onboard the Qantas Airbus A380-800, enjoy one of the 14 fully flat beds, luxurious furnishings and designer amenity perks.

  • Coming at a cost

    But don’t be mistaken — this all comes at a cost.

    “Many people who fly first class don’t pay for it; they are either upgraded or have many frequent flier miles,” said's Chandra.

    So then what is the point of these upgrades? Chandra believes it is for marketing. “Who doesn’t want to talk about a shower or chef on board an aircraft,” she asked.

    However,'s Friess insists that these accommodations are imperative for airlines. “First-class seats alone can bring in 10 times the revenue of the average economy seat. Even if you have a couple of empty seats up in first class, you are still bringing in a lot of money on those seats that are filled.”

    The only thing missing is a hot tub and tiki lounge ... or does Virgin Atlantic already have this one in the works?

Photos: Airline cuisine

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  1. Celebrating Hawaii

    To celebrate its third year of flying to Hawaii, Alaska Airlines sold Hawaiian-themed meals during October 2010, such as this tropical cheese plate for $7. (Courtesy Alaska Airlines) Back to slideshow navigation
  2. Hawaiian-themed meals

    The Northern Bites Grilled Teriyaki Chicken ($6) was another of Alaska Airlines' food offerings for Hawaiian month. (Courtesy Alaska Airlines) Back to slideshow navigation
  3. No more free meals

    Continental Airlines no longer offers free meals or snacks aboard its flights. But for $6.25, passengers can order this Angus cheeseburger. (Felix Sanchez / Courtesy Continental Airlines) Back to slideshow navigation
  4. In-flight variety

    You can order this Asian-style noodle salad (yes, served in a Chinese take-out box) on some Continental flights, but it will cost you $4.50. (Felix Sanchez / Courtesy Continental Airlines) Back to slideshow navigation
  5. Flavorful offerings

    Delta Air Lines offers this mesquite smoked turkey wrap with pepper jack, left, for $6 and a chicken and turkey Cuban for $8. (Courtesy Delta Air Lines ) Back to slideshow navigation
  6. Free meals

    Hawaiian Airlines continues to offer complimentary meals, served in packaging made from recyclable materials that are 100% biodegradable. The airline is currently redesigning its coach meal service and is about to roll out a new menu. (Courtesy Hawaiian Airlines) Back to slideshow navigation
  7. But you pay for snacks

    While meals are complimentary, a variety of snacks aboard Hawaiian Airlines are for sale from $5.50 to $6.50. (Courtesy Hawaiian Airlines) Back to slideshow navigation
  8. Upgraded meals

    Or if you pony up some money, you can purchase a premium meal on Hawaiian Airlines. For $12, fliers can nosh on this sushi bento box. (Courtesy Hawaiian Airlines) Back to slideshow navigation
  9. Power Up on JetBlue

    JetBlue offers passengers unlimited servings of chips, cashews, animal crackers and other items. Boxed meals with Wake Up, Cheer Up, Beef Up, Shape Up and Power Up (pictured) themes are available for $6. (Photographer:mark Greenberg / Courtesy JetBlue) Back to slideshow navigation
  10. Peanuts, pretzels or cookies?

    Southwest Airlines passengers are served complimentary snacks on all flights. (Courtesy Southwest Airlines) Back to slideshow navigation
  11. In-seat ordering

    On Virgin America, which rolled out its new menu on Oct. 1, passengers use their seat-back touchscreens to order (and pay for) a meal or a snack anytime during a flight, such as this roast beef sandwich for $10. (Courtesy Virgin America) Back to slideshow navigation
  12. New menu items

    Virgin America offers its most popular item -- a veggies and hummus plate -- for $9 on all flights. “We are absolutely competing with airport food,” said Rob Gallagher, Virgin America’s catering manager. “Airports are now doing so many wonderful things with food.” (Courtesy Virgin America) Back to slideshow navigation
  13. $24.99 brunch

    United Airlines has introduced a new $24.99 brunch -- complete with quiche, sparkling wine and chocolate -- for travelers flying on premium service flights between New York and Los Angeles or San Francisco. The catch: Meals must be ordered online at least 72 hours before a flight. (Wayne Slezak / Courtesy United Airlines) Back to slideshow navigation
  14. Wrap it up

    United Airlines' buy-on-board menu options include a chicken Caesar salad or a wrap for $9. (Courtesy United Airlines) Back to slideshow navigation
  15. Passenger favorites

    US Airways polls passengers via Twitter and in-flight testing to see which buy-on-board snacks are favorites. Prices range from $3 to $5. (Courtesy US Airways) Back to slideshow navigation
  16. Complimentary cookies

    Alaska Airlines hands outs a complimentary Cougar Mountain cookies on some longer flights. (Courtesy Alaska Airlines) Back to slideshow navigation
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Video: Continental tests turnstile self check-in

  1. Transcript of: Continental tests turnstile self check-in

    BRIAN WILLIAMS, anchor: Just when you think they can't give the customers any less in the airline business, Continental Airlines has started testing a self-boarding system for its flights. Instead of handing your boarding pass to a human, an agent, at the gate, you'd swipe it at the turnstile. Trial period is under way now in Houston . But foreign airports are way ahead on this one. Fourteen separate airlines worldwide already use some form of self-boarding.


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