No matter what Emirates President Tim Clark says, the airline probably wishes it had moved faster to add premium economy. Most airlines say it has been selling well, as customers are flush with more disposable income. Of course, if and when a recession hits, passengers will stop spending on these perks.
Emirates expects to introduce its “exclusive” premium economy on newly delivered Airbus A380s and Boeing 777s in 2020 and then will retrofit much of its fleet, but will not put the product on aircraft it doesn’t expect to keep long-term, Emirates President Tim Clark told me last week in London.
If it happens on schedule, that’ll make Emirates as much as a decade behind an important trend. Most large airlines have premium economy, a product airline executives say has been selling well in a booming economy as cost-conscious travelers trade up. But Clark said the airline wanted to wait to make sure the investment was worth its cost.
“I don’t think we waited too long, because the yields we have been getting out of our [existing] premium cabins have been growing very significantly,” he said at the Aviation Festival, an industry conference. “There was always a concern we would end up diluting that, and people would start trading down. That’s probably why we were a bit slow.”
As he often does with product announcements, Clark played it coy, declining to share what the new seats will include, though he hinted they could be more opulent than what some competitors fly. Still, he said the new seats, designed by the airline and built by an established seat manufacturer, won’t be too over-the-top because Emirates wants to protect its existing premium franchise.
“You don’t want to have product so luxurious it causes people to come down from business,” he said. “But equally you need to persuade people to go up from economy.”
Read more of my interview, including Clark’s view on Fifth Freedom flights between Europe in the United States, in the story I wrote from London.
Stories of the Week
Emirates May Resume U.S. Growth as Business Recovers From Trump Policies: Clark was as feisty as ever in our interview, particularly when discussing Emirates’ plans in the United States. The carrier has reduced some capacity in the past two years, due to what can best be transcribed as a Trump slump. But Emirates wants to add much of it back, and may even expand into smaller U.S. markets. It’s also still looking at flying more Fifth Freedom routes between Europe and the United States.
JetBlue CEO’s Rationale on Higher Bag Fees: ‘We Hate Increasing Fares’: Also in London, JetBlue CEO Robin Hayes explained why his carrier increased fees for the first checked bag to $30, saying the airline had to recover added fuel costs. I pointed out JetBlue might have instead charged for seat assignments or Wi-Fi to add revenue — all of its competitors do — but he said he views those perks as differentiators. “We can’t have the best on everything, but we want to have what makes a difference to the customer,” he said.
Video: United Airlines’ Quick-Hit Approach to Innovation: United has increasingly been sending Linda Jojo, its chief digital officer, on the conference circuit, and I can see why. She has a strong presence, and knows what it takes to run technology at a major airline. I interviewed her in June at Skift Tech Forum in Silicon Valley, and the video is up. Watch it here.
What’s Behind the Face-Off Between Airports and Airlines in Australia: Australia’s airlines are urging the government to rein in the airports, claiming they are abusing their monopoly power to extract unreasonable charges, Skift freelancer Allan Leibowitz writes. This is something Qantas CEO Alan Joyce complains about at almost every opportunity.
25 Things That Inspire Me About the Travel Industry: Skift’s CEO, Rafat Ali, took some criticism from the airline industry for his recent piece called “The 21 Uncomfortable Truths That I Have Learned About the Travel Industry.” This week, he wrote a new piece in which he writes about what impresses him about travel companies. In it, he says, “The complexity of the airline business, the gargantuan daily global dance that airlines have to do just to be able to operate, is breathtaking in its scope to understand.” I agree.
British Airways Weathers Yet Another PR Crisis: Remember when we thought United Airlines had the world’s weakest brand among major legacy carriers? British Airways probably holds that title now, after announcing a credit card breach last week. Bloomberg’s Chris Bryant asks how the airline may learn from its mistake.
Skift Aviation Business Editor Brian Sumers [[email protected]] curates the Skift Airline Innovation Report. Skift emails the newsletter every Wednesday. Have a story idea? Or a juicy news tip? Want to share a memo? Send him an email or tweet him.
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Photo credit: Emirates for a long time declined to add a premium economy section, calculating its economy cabin was luxurious enough. But that will change in 2020. Emirates