Emirates First Class cuts continue a premium cabin trend

30 May, 2017

Emirates Airline will reduce its First Class offering as part of a reconfiguration of the cabins on the Boeing 777-300ER, continuing what has become an industry trend over the past decade. The United Arab Emirates (UAE) hub carrier will cut capacity by a quarter removing two of its eight First Class private suites and switching from a 1-2-1 to a 1-1-1 design and delivering its onboard experience “to the next level”.

The new configuration, which will include a range of other new features in the Business and Economy Class cabins, will be formally unveiled at the Dubai Air Show in November with the first modified aircraft entering commercial service immediately after the event.

“Our products and services across cabin classes are continually improved and enhanced. But what our customers will see on Emirates’ new 777s starting from November, will be a much bigger revamp that takes our onboard experience to the next level. All cabins will sport a totally fresh new look,” says Sir Tim Clark, president, Emirates Airline.

It has become clear that advancements in other cabins have reduced the sustainability of a First Class offering. While some routes still clearly retain a need for the exclusive cabin, advancements in seats, in flight experience and customer service in the competitive Business Class cabin have generally reduced the gap between the two classes at a cheaper ticket price.

In fact the introduction of dedicated Premium Economy cabins, which on some airlines provide comfort and service previously witnessed in Business Class, has developed an additional level of travel with passengers upgrading from Economy as well as some slipping down from Business Class.

CHART - Emirates Airline traffic split on international flights versus global offering

With Emirates’ pedigree you would expect something special from its new First Class. It may not stretch as far as the special three-room Residence developed by fellow UAE carrier Etihad Airways on its Airbus A380s, but will be sure to have a wow factor and the privacy required by its elite passengers.

The airline originally pioneered the private suite concept on commercial flights in 2003 and has a track record of new innovations that have raised the bar for the industry in terms of inflight customer experience including Shower Spas and the Onboard Lounge onboard its A380 aircraft and its ice on demand entertainment system throughout all its cabins.

Emirates has already started to cut its First Class offering by removing the cabin from some of its A380s in favour of more Economy seats for operation on its busier routes. An increasing number of other long-haul airlines are removing or at least reducing First Class seats in their latest aircraft. Despite serving long-haul missions like its new Perth – London non-stop Qantas has chosen not to have a First Class cabin in its Boeing 787-9 Dreamliner fleet, while Lufthansa, Singapore Airlines and United Airlines have also scaled back or removed First Class seats on their aircraft.

Qatar Airways is claiming its new ‘QSuite’ middle of the cabin Business Class section planned for its 777-300ER and A350-900 will ultimately remove the need for a dedicated First Class offering by providing a seat concept that quickly converts into double beds, meeting rooms or a family lounge.

The airline currently only offers a full First Class on its six A380s where it acknowledges that the size of the aircraft provides the space to deliver such a cabin. However, it claims its ‘QSuite’ concept now allows it to provide a First Class offer in the same space as four normal Business Class seats to meet premium demand (and likely a premium price tag).

The ‘QSuite’ certainly delivers a concept that maximises the value of the onboard space on widebodied airliners. The value proposition on the space required for a First Class product is seen by many airlines now to be too high a price to pay, especially when the gap between Business Class on a scheduled flight and the use of a luxurious private aircraft is becoming smaller and smaller.

It was this reasoning that ultimately pushed most of the major airlines in North America to remove First Class on International routes, a view that increasingly is now being replicated across Europe and in parts of Asia. Airlines are clearly moving to having a small fleet of aircraft that are suited to the First Class product (A380) or a niche sub-fleet of other types that are limited to specific routes where demand requires a premium offering and can meet that required price point to make it sustainable for the airline.

CHART - Annual International First Class Seats and Share of Total CapacitySource: OAG Schedules Analyser

Overall, across the globe, the number of First Class seats on offer is clearly decreasing, according to schedule data from OAG. This summer there will be 43.7 million First Class seats available for booking, down 21.4% on summer 2016. These remain dominated by domestic market offerings, particularly within the USA and mainly in the highly-competitive transcontinental market.

The number of international seats this summer is down 29.2% on summer 2016, according to the schedule data, to below seven million departure seats: its lowest ever level in the modern era. Emirates has the second largest amount of these premium seats this summer with a 16.4% share - slightly below United Airlines - with its Bangkok, London Heathrow, Kuwait and Singapore Changi routes having the largest provision of First Class volume.