Business class gets flexible: What does the new fare options means for business travellers?

15
4 min read

JOHANNESBURG – While the UK government stirs controversy with a tax hike on premium cabin travel, airlines themselves are shaking up business class with new fare options and flexibility. Business class air fares are making headlines, but for a different reason – the proliferation of ‘light’ business class fares that strip away some premium perks.

“Airlines are segmenting products to offer more pricing flexibility and cater to varied budgets and amenity preferences,” explains Bonnie Smith, GM of FCM. “Different travellers value different amenities, and now airlines can monetise that.”

As a result, there have been two distinct movements in the business class world. Some airlines decided to go all out and introduce Business Luxe with privacy doors and double beds. Major carriers like Japan Airlines, Air India, Cathay Pacific and Air New Zealand and Lufthansa unveiled incredibly luxurious new business class seats and cabin experiences designed to attract high-revenue corporate travellers.

On the other end of the spectrum, some airlines opted for a ‘Business Lite’ route, offering fares with no lounge access, restricted seat selection, and fewer points earned. This strategy allows airlines to provide more pricing flexibility and cater to varied budgets while still offering a premium experience over economy class.

Light business fares unpacked

Qatar Airways initiated a trend in 2021 by offering an entry-level business class fare. Since then, airlines like Emirates, Finnair, and Air France/KLM have introduced similar stripped-down business class fares, omitting perks like lounges, baggage allowances, and elite qualifying credits.

Air France and KLM offer three business class tiers: Light, Standard, and Flex. Light fares are less flexible, exclude lounge access and a second checked bag, but include priority boarding, disembarkation, and baggage delivery. Only Flex fares allow free advanced seat selection. Elite members receive full benefits regardless of fare type, incentivising status earning.

Light business class still provides more comfortable seats and an enhanced in-flight experience compared to economy but at a lower price by removing extras.

“For frequent travellers who don’t need extras, light business fares offer significant savings over standard business class, as the core benefit is often just the lie-flat bed and personal space,” says Smith.

However, there’s a trade-off – if lounges, more baggage, or elite status are crucial, stripped-down light fares may not be worthwhile.

So for travel managers, the new options provide more levers to try and find the right balance of cost and amenities. “You may opt for light business class on shorter trips where the core need is simply more space. But you may stick with standard business for longer-haul flights when you want to pamper employees with the full suite of premium services,” advises Smith.

Is ultra-lux business class dead?

First class was once the pinnacle of air travel, but its exalted position is diminishing as airlines grapple with the economic challenges of operating an ultra-luxurious cabin. Filling every pricey first class suite has proven difficult, and the costs associated with providing an over-the-top premium experience are cutting into profits. As a result, many carriers are bidding farewell to first class altogether.

Airlines like American Airlines are finding that customers aren’t booking those luxurious first-class seats on long-haul flights as often. Why? Leisure travellers are showing a preference for the upgraded comfort and perks found in premium business class. As a result, airlines are swapping out traditional first-class cabins on some flights and rolling out expanded business class sections to meet this change in demand.

However, airlines aren’t simply downgrading – they are investing heavily to elevate business class into a new form of boutique premium travel. The latest business class seats mimic and rival First with amenities like spacious suites, sliding privacy doors, massive entertainment screens, wireless charging pads, and seating configurations that give every passenger direct aisle access.

By delivering an exceptionally luxurious experience at a better profit margin, business class is positioned to dethrone first class as the fancy new front cabin for premium travellers. With enhanced comfort, privacy and technology wrapped into the business experience, airlines can provide an ultra-premium feel without the ultra-premium costs associated with first class.

The case to go lighter for business travellers

The introduction of light business class is just one example of how airlines aim to make premium cabins more accessible to a broader set of corporate policies and budgets. And when you consider the sustainability angle – fewer carbon emissions from reducing superfluous amenities – these streamlined business class fares could appeal to eco-conscious organisations as well.

“It’s good news for corporate travel buyers, who now have more ability to customise premium cabin experiences to align with policies and budgets across different traveller groups. But it also means business travellers need to do their homework: be crystal clear on what’s included in the business class fare before hitting ‘purchase’,” concludes Smith.