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Piling On the Luxury


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For most travelers, flying in style may be a thing of the past, but airlines are determined to bring back some glamour to air travel, at least for those sitting in the front of the plane.

Flat beds and fluffy pillows, fancy wines and four-course meals, designer-brand pajamas and luxurious vanity kits — these options have become the staple of business-class travel these days.

And after a couple of sluggish years, business travel spending in the United States is forecast to grow by 7.1 percent to $293 billion in 2014, according the Global Business Travel Association. Spending on international travel is expected to increase almost twice as fast, at 13 percent, to reach $37 billion.

With this pickup in corporate travel, airlines are taking extra steps to offer ever more personal services and benefits to compete for high-value business passengers, even as they squeeze more travelers in the back.

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“Corporate passengers are definitely being fought over by all the airlines,” said Claudia Sender, the chief executive of TAM Airlines, the Brazilian carrier. “They have never been so important because of their willingness to pay more.”


FANCY FEAST The Virgin Clubhouse at J.F.K. Virgin Atlantic gives its business-class passengers the option to eat dinner in the terminal before boarding a flight.CreditRobert Wright for The New York Times

Airlines have always treated their business-class passengers a little better than the rest. But in today’s era of mass travel, the extra attention to the front of the cabin has increased disparities in the air as never before.

“The gap between what’s going on at the front of the plane and in the back has never been wider,” said Tim Winship, publisher of theFrequentFlyer.com website. He added: “If you’re one of the lucky few who flies first or business class these days — it’s as good as it’s ever been. It’s all about profitability. Given the disproportionate contribution from high-yield customers, it would be financially irrational for the airlines not to take this into consideration.” Airlines typically charge six to eight times as much for business class as for coach on long-haul, international flights, and two to three times as much for first class as for business class. For a passenger booking a month in advance, Cathay Pacific, for instance, can charge $900 for a round-trip economy ticket from Los Angeles to Hong Kong, $6,400 in business class, and nearly $16,000 in first class.

(The difference in prices on domestic flights is not as wide as on international flights, meaning coach passengers contribute a far higher share to the flight’s total revenues.)

Corporate accounts get discounts in exchange for a commitment to buy business-class seats, and airlines will often throw in a few first-class seats as incentives to sweeten the deal.

About a third of the passengers on a plane, generally those flying in the premium cabins or paying full fare for economy tickets, account for roughly two-thirds of an airline’s revenue.

So it’s no surprise that airlines are redoubling efforts to please these corporate passengers even at a time when business travelers are trying to stretch their travel budgets.

They get speedier service at the airport, their bags come out of the carousel first, they can use faster security lanes and their check-in counters are less crowded. They are also the first to board and get off the plane. Some airlines have dedicated terminals for first-class passengers and provide limousine transfers on the tarmac between flights.

Delta Air Lines, for instance, picks up some of its connecting elite passengers in New York, Atlanta, Los Angeles and Minneapolis and takes them to their next flight in a Porsche Cayenne. United Airlines offers a similar service at Chicago O’Hare, Newark Liberty, San Francisco International and George Bush Intercontinental in Houston, with a Mercedes GL-Class, and plans to expand it to Los Angeles International in May and Washington Dulles and Denver International later this year.

“We know, because our business customers tell us, that what matters most to our passengers are speed and efficiency, and that’s what we try to provide,” said Mike Henny, Delta’s director of customer experience. “We try to think about the entire journey.”

Inside the plane, the most visible sign of this attention is the latest generation of business-class seats. The standard today are comfortable seats that can be turned into flat beds, not angled ones, where passengers complain of sliding down as they sleep. Many airlines now favor seats that have direct-aisle access for passengers, meaning travelers do not have to climb over a sleeping neighbor if they want to get out of their seats in the middle of the night.

Air France is the latest of the big global carriers to realize that these features have become indispensable in the battle for corporate accounts. The airline recently announced that as part of a $500 million investment to upgrade its cabins, it will install new flatbed seats in business class. Each costs at least $68,000, and Air France will begin fitting them in June on its fleet of Boeing 777s.

The investments, says Alexandre de Juniac, the airline’s chairman and chief executive, have become necessary for Air France to compete against Asian and Middle Eastern carriers that long-ago started lavishing the most luxurious amenities on their business-class and first-class customers.

“Our only weapons, since we can’t lower our costs to the same level as theirs, is to fight back with our own quality services,” said Mr. de Juniac.

Emirates, the Dubai-based carrier, has two showers inside its flagship fleet of Airbus A380s for its first-class cabin. Korean Airlines has a spacious bar and lounge for its first-class passengers on its own A380s. Even egalitarian JetBlue Airways is getting in on the act. The low-cost airline is introducing new first-class and business-class seats on its Airbus A321 jets operating transcontinental routes starting this year.

Delta last month announced it had just finished installing full flatbed seats with direct-aisle access in its business-class cabin across its entire international wide-body fleet, which includes its Airbus A330s and Boeing 767s, 747s and 777s.

Airline executives say these expensive amenities are worth the cost because of the much higher fares they can charge for business class.

And airlines have realized that offering a real opportunity for a good night’s sleep while aboard has become a competitive tool, particularly with the advent of new jets that can fly longer distances without stopping for fuel. These include the Boeing 777, which has become a flagship aircraft for the world’s longest routes, and the new Boeing 787 Dreamliner, which can provide nonstop flights between the East Coast of the United States and Japan, or between Europe and Australia.

Given the limited real estate in an airline cabin, the downside of these seats is that they take up more space.

“For the business class to be profitable you need to be able to generate significant fare premiums to justify the extra real estate,” said Willie Walsh, the chief executive of International Airlines Group, the parent company of British Airways and Spain’s Iberia. “It’s an interesting balancing act.”

This has forced seat makers to come up with innovative designs to increase seat density in business class without sacrificing comfort.

Tomorrow’s business seat will most likely offer movie suggestions based on passengers’ preferences stored in their mobile devices. Seat headrests will come with a surround-sound system to provide an immersive experience. And television screens will be even bigger, rivaling what many people have at home.

Airline seats are borrowing tricks from the hotel industry, too, which has long focused on improving a guest’s sleep experience. Japan Airlines, for example, is offering a selection of different pillows similar to what’s found in many high-end hotels. It is also working with a mattress company to develop extra padding for its seats to make the beds more comfortable.

But competing with seats alone can be a tricky business. The best seat on the market can only be unrivaled for a short while before another airline comes up with a new product, fueling an expensive arms race. And since seats remain on a plane for about seven years, investments can quickly become outmoded.

“It’s a catch-up game,” said Ms. Sender, TAM’s chief executive. “You can have the best seat ever for two years. But guess what? Someone else will come up with a better seat.”

Airlines may have started to reach the limits to innovations with seats and cabin space, said Raymond Kollau, the founder of Airlinetrends.com, which looks at the latest industry developments in product and service. So airlines are increasingly turning their attention to customer service to complement investments in hardware.

“There’s not a lot more you can do once you’ve provided a fully flat bed,” Mr. Kollau said. “After that, it all comes down to customer service.”

Since the whole point of providing flatbeds is better and longer sleep, airlines are rethinking their approach to in-flight service, particularly during night flights, to allow passengers more uninterrupted time to sleep.


BONNE NUIT As part of a $500 million investment to upgrade its cabins, Air France will install new flatbed seats in business class.CreditBalint Porneczi/Bloomberg News, via Getty Images

“It’s about attention to the tiniest details,” Mr. Kollau said. “It becomes less about the single product and more about the entire package.”

Virgin Atlantic, for instance, which flies between London and the United States, offers business passengers the option to have their dinner in the terminal before boarding. Those who pick that option are then assigned seats in the “snooze,” or quiet section of the cabin, where flight attendants will not bother them.

SAS, the Scandinavian carrier, hands out a takeout breakfast bag upon arrival for passengers who wish to sleep right up to landing. That option is soon coming to British Airways, too.

Lufthansa has installed humidifiers in the first-class cabin of its newer Airbus A380s, which increase the relative humidity of the cabin to around 25 percent; it ranges from 5 to 10 percent in the rest of the plane. The technology promises to “improve sleep, reduce jet lag and tiredness and alleviate dehydration of the eyes, skin and linings of the mouth and nose,” according to CTT Systems, the Swedish manufacturer.

Etihad Airways, based in the United Arab Emirates, recently outlined a sleep initiative that it described as a result of a two-year partnership with sleep experts from the American Center for Psychiatry and Neurology, an Abu Dhabi-based clinical center.

Passengers in coach get noise-canceling headphones, as well as beverages conducive to sleep, like hot chocolate and herbal teas. First-class passengers get “sleep-inducing camomile tea,” the airline says, as well as luxury sleep suits.

To make sure travelers remain loyal, airlines are also going the extra mile on the ground as well as in-flight.

In Frankfurt, Lufthansa has an entire terminal dedicated just to first-class passengers that offers an array of services, including fine dining and baths. Passengers facing a long connection time can rent a Porsche 911 for 99 euros — about $137 — for three hours to cruise German highways.

At its Paris hub at Charles de Gaulle Airport, Air France offers a similar high-end experience. Its first-class lounge delivers red-carpet treatment from the airport’s main gate all the way to the plane. It includes a spa and massage service, and food prepared by Alain Ducasse.

First-class passengers do not have to stand in line to get their passport stamped. An immigration official will come to the lounge to do so. Passengers are then taken to their flight by car — German luxury models initially used were recently replaced with French cars.

Even when they do not get their own terminals, perks in the United States are still good for elite passengers. At Delta’s new Terminal 4 in New York’s Kennedy International Airport, the airline has built a viewing deck inside the business-class lounge for the exclusive enjoyment of a select few. All this preferential treatment has changed air travel. Critics say the airlines are increasingly mirroring some of the worst inequalities found elsewhere.

“The difference between the worst and the first has never been wider,” said Charlie Leocha, who leads the Consumer Travel Alliance in Washington and is a frequent industry critic. “Passengers in the front of the plane travel in a totally different system.”

Delta, for instance, recently announced it would change in 2015 the way passengers are awarded frequent-flier miles by moving to a system that takes into account how much they spend, dropping the previous standard of how far they fly.

Passengers going round trip from New York to Los Angeles in coach now get 4,930 award miles, whether they paid $500 or $1,000 for their ticket. Under the new SkyMiles program, the lower fare will get 2,500 award miles while the higher fare will net 5,000 miles. (Business passengers usually spend more and so are likely to benefit from this approach.)

And while the front of the plane has been significantly upgraded, the traditional economy class has become more cramped as coach passengers pay the price to make more room for premium passengers. The average seat pitch — the industry standard for the space between two seats, currently about 31 inches — has been reduced by about 10 percent over the last decade. Airlines are also using slimmer economy seats that allow them to add more rows and passengers on their planes.

Some are also trying to increase the number of seats they can fit into each row. For instance, American Airlines has introduced a new seating plan for some of its refurbished Boeing 777s that fits 10 passengers abreast, instead of nine. The move to more seats has been brisk. In 2010, fewer than 15 percent of the 777s Boeing manufactured had 10 seats abreast. Today, nearly two-thirds of them do, says Mr. Kollau.

“Coach is pretty much the seat and the seatbelt these days,” said Henry Harteveldt, a travel industry analyst in San Francisco and founder of Atmosphere Research Group.

Airlines argue that ticket prices remain historically low, once they are adjusted for inflation, and that passengers for that reason are generally better off today than when the industry was deregulated.

But some executives see risk in that strategy. Economy passengers, they warn, may not be willing to accept increasingly bad traveling conditions. It might also hurt the brand with premium passengers, since business travelers also often fly coach.

“I don’t think you can offset the profitability of business class by squeezing more people into economy,” Mr. Walsh of British Airways and Iberia said. “Passengers will simply not tolerate it. They will go elsewhere.”

There are one or two areas, however, where a sort of trickle-down theory of flying may be at work, to the benefit of the traveling masses.

As today’s business class is comparable to what first-class travel used to be 20 years ago, a new class of service on some long-haul carriers, known as premium economy, is offering many of the amenities once found only in business class.

And over the last decade, airlines have vastly improved their in-flight entertainment systems. Individual television screens, first introduced in first class and business class, have become pretty much standard on long-haul flights in economy as well. Passengers have also come to expect them.

Cathay Pacific provides on-demand audio and video and its economy seats each have nine-inch personal screens. Passengers can connect their electronic devices and stream their own movies. Each seat also has a USB port, and 110-volt power sources are widely available on board.

Airline executives are now turning to improving connectivity on board. Many airlines provide Wi-Fi on domestic flights, and the industry is rapidly moving to over-the-water connections for international flights, using satellite transmissions instead of ground networks.

The speed of technology improvements has been rapid in this area. When Gogo began offering in-flight Internet service five years ago, the peak speed available on the company’s air-to-ground network was 3.1 megabits per second. Last year, it installed new service that took the speed to 9.8 megabits a second.

At the recent Aircraft Interiors Expo in Hamburg, Germany, Gogo presented its latest offering, known as a ground-to-orbit system, that will increase the top speeds to 70 megabits per second. The system will be installed first by Japan Airlines for trials and should be available starting next year, according to Gogo.

“People are now expecting to remain connected in flight,” said Mr. Walsh. “That’s a little surprising since many people used to view flights as the only time to disconnect.”


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