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Premium Economy should be Business Minus rather than Economy Plus

Premium Economy should be Business Minus rather than Economy Plus

I read today a post on Australian Business Traveller about the new Premium Economy to be introduced on Cathay Pacific.  Amongst all the detail of pitch and width and recline, and what planes its being rolled out on is the following quote from Alex McGowan, Cathay’s General Manager for Product:

“The key with something like premium economy is to understand that it’s an economy plus product, not a ‘business class minus’ product – at least from a philosophical perspective, but not as a product definition”

The problem Alex, is that customers really don’t see it like that. I suggest that Business Class Minus is very much what passengers want.  Business Class – minus the Business Class price. Well at least what this passenger wants.

On the other hand – I’m realistic. I know that all of that flat bed seat, manchester, service, food and wine is going to cost me more than an economy seat – but I just wish that there were compromises that I want rather than what the airline determines.  So here is what I would like out of Premium Economy:

  • A really comfortable seat
    Something like the old business class, plush and sink-into-able, with good arm rests and that little space in between seats to rest a cocktail glass
  • A wide seat
    not just a half an inch more but something approaching business class like 20 or more inches wide
  • Proper recline
    I don’t want 6 or 8 inches. I want more like 12 or 14 – that’s a real recline
  • Decent pitch
    I know space costs money on a plane – but 38inches is a large waist size, but not a great distance between seats. Give me 40 at least – preferably 44. I just need to stretch out – not lay down.
  • Good service
    For me this makes a flight an experience rather than an endurance. It doesn’t have to be the full business experience, but a step up from economy. The kind of service that means you never have to ring to get your wine filled up.
  • Decent tray table and power point
    I need to have something that will either support my 17inch notebook, or my iPad. I don’t watch that much on the inflight entertainment system these days – for a start both my computer and iPad have better picture and sound quality, but I do need to be able to recharge both
  • A decent amenity kit
    and by decent I mean one with good eye shades, earplugs, toothbrush and paste, and preferably some moisturiser – that’s it. And given Qantas’s First Class amenity pack is valued at $30 – this shouldn’t be impossible

No I know that is asking too much probably – but here are a couple of things I can do without in the new Business Class minus – Premium Economy

  • A flat bed
    I would love one (I have loved many) – but I do expect to pay serious money for it
  • Table service
    I love a starched linen tablecloth, and silver service – but I can live without it.
  • Crappy inflight entertainment system
    Airlines seem to have concentrated on quantity, and not on quality. The screens are crappy, and so are most of the ‘noise cancelling’ headphone. With iPad’s and computers, I say – save your money airline. I’ll bring my own.

So – how much am I prepared to pay for such a service?
Good question.  I had a quick look at return fares between Sydney, Australia and London, UK departing mid February 2012 and returning 4 weeks later.  Here are the broad price ranges – using whatever is the cheapest through to the average Qantas or British Airways fare:

  • Economy = AU$1,600 to 1,800
  • Premium = AU 4,000 to 5,000
  • Business = 5,700 to 9,300 (with a lot in the mid-price range of AU$7,000 to 8,000)

In broad comparison, Premium Economy is about 2.5 times as expensive as Economy, and Business is about 3.5 to 5 times the cost of Economy. I think those multiples are about right, but I don’t think the service, and therefore value-for-money corresponds. If Premium Economy was going to cost me $4,000 on JAL, but I could get a lie flat bed on Asiana for $5,673, I would be paying the extra for the superb service with Asiana and the lie flat bed, even through I would need to spend a night at Incheon on the way over.

So what’s the take out for airlines on this – you need to lift the Premium Economy game, so that the service and seats feels more like Business minus the lie flat seats, while keeping the price point about the same as it currently is.  For me and those like me – who have reached an age where Economy is almost unthinkable for long haul, and business class is just too expensive, unless heavily discounted, we are prepared to pay the extra for a good Premium Economy experience, rather than just Economy with a few inches more leg room

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