Page 74 - Bloomberg Businessweek-October 29, 2018

◼ BUSINESS Bloomberg Businessweek October 29, 2018

it makes sense, where we have the customers who
want it.”
Air France says it’s seeing an increase in demand
for what it calls “La Première” for the first time in
years, prompting it to reintroduce the option on
daily flights from Paris to Mexico City and São Paulo
and increase its frequency to San Francisco. British
Airways, which in 2016 said it would scrap first class
on many routes, plans to revamp the service. The
company on Oct. 10 opened a new first-class lounge
at New York’s John F. Kennedy International Airport than 10 paying customers daily for the service, says ▲ Air France’s
that features private dining booths where travel- Samuel Engel, an analyst at consulting company “La Première” service
ers can dig into dishes such as lobster bisque with ICF International Inc. Still, he says, first class makes
crème fraîche or filet mignon with celery root gratin, sense as it can be offered as part of a package for cor-
each paired with the appropriate chardonnay, pinot porate clients or as an occasional upgrade to loyal
noir, or cabernet sauvignon. Emirates Group, which passengers. And it can help manage occupancy and
offers 29,000 first-class seats a week across its net- customer satisfaction in business class, where air-
work, is adding flourishes such as hardwood floors lines earn the bulk of their profits. “First class acts as
to its service, which had already set the industry a buffer that allows airlines to overbook in business,”
standard with private cabins, onboard showers, and Engel says, “since nobody will mind getting bumped
safari binoculars for window gazing. into first class.” �Richard Weiss, with Benjamin D.
Although first class is making inroads again, it Katz and Ania Nussbaum
will offer fewer seats. Singapore Airlines Ltd. says
it’s retooling the first-class cabins on its new Airbus THE BOTTOM LINE First class is coming back, but it’s doing so
with a smaller footprint. Carriers are amping up the luxury quotient
A380 double-decker jets, but it’s going to offer only as they reduce the number of seats in the super-premium cabin.
six suites instead of the 12 that older planes have 21
(though each looks more like a luxury hotel room
than an airline seat, with a full-size wardrobe, bed,
and leather chair from Italian designer Poltrona Can Eateries End
Frau). Emirates will cut the number of such berths
to 11 from 14 on its A380s, and Lufthansa’s 777 wide- Their Midday Nap?
bodies may get just four first-class seats, down from
eight today.
The key is getting the balance right, says John
Strickland, director of airline advisory firm JLS ● The post-lunch period is a sales dead zone
Consulting in London. One first-class ticket can for many. But the rent still needs to be paid
generate as much revenue as a dozen in coach or
two in business, but the berth occupies only about
as much space as five economy seats and one and Not that many years ago, Starbucks Corp. could
a half to two business class seats. “First class has a depend on a surefire way to keep its stores busy in
value, provided it’s used judiciously—not sacrificing the afternoons: whipped cream-topped Frappuccino
profitable sales in business class by taking up too sugar bombs. Customers didn’t seem to care that a
much precious floor space,” Strickland says. medium java-chip Frappuccino has 470 calories and
Even a diminished first class can help airlines about 16 teaspoons of sugar. But as American palates
buff up their image. Emirates and Etihad Airways and schedules have morphed, the world’s biggest
sell first-class swag such as toys, vanity kits, and coffee chain has struggled to keep its baristas mak-
moisturizing pajamas on their websites or during ing drinks after the lunch rush dies down.
flights. And gauzy promotional photos of chauf- This is no small problem. The coffee chain is
feured limousines, opulent lounges, and white- closing U.S. cafes and laying off corporate employ-
glove service on board can make even passengers ees amid faltering sales, in part because of slug-
crammed into the back of the plane feel as if their gishness in the afternoon daypart (an industry
airline is offering a standard of luxury beyond what term). And when hedge fund manager and activ-
low-cost carriers can manage. ist investor Bill Ackman disclosed a $900 million
First class is available on thousands of routes stake in Starbucks in October, he noted that weak
globally, though only about 20 of them attract more afternoons and the “consumer shift away from