Empty higher-class seats should be a real issue for airlines. Each one is a missed opportunity for more revenue from customers. As we know, the aviation industry has gone through tremendous difficulties in recent years. Firstly, starting off with the pandemic, government restrictions on foreign travel meant that for two years, airlines made heavy losses as demand for flights slumped.
Even after restrictions were lifted it took time to recover as airports had to restrict flights due to staff shortages as many had been laid off during the pandemic when demand was less. To make matters worse, since then the situation has not been easy with adverse weather conditions as well as ensuing conflicts in Ukraine and the Middle East hiking fuel prices and forcing airlines to make expensive route changes.
Proportion of Seats That Are Empty
All of this should mean that airlines should try to fill as many seats as possible. Fortunately, the proportion of seats being filled in any class of cabin has returned to pre-pandemic levels. However, even then on average only 8 out of 10 seats on any flight are filled. This means that approximately 20% of seats lie vacant on most flights. Whilst there is a loss of revenue in all classes, the revenue lost will be more on higher class seats considering extra remittance paid.
For premium economy seating, the ticket price is often double that of a standard economy seat. For business class and first class, ticket prices are even higher, at 3 times or 5 times higher than the standard economy seat for business and first class customers respectively. This shows that there is more to be gained from filling a higher-class seat than one in the standard economy cabin.
Drawbacks to Offering Discounts
There are however issues with offering discounts on empty higher class seats. Firstly, the added cost of providing an extra business or first class meal which would not be needed otherwise has to be factored in. In addition, business class ticket holders are also eligible for certain other costly perks such as the use of a business or first class lounge, or free chauffeur-driven service taking the customer from home to the airport. All of this would be considerably costly for the airline, and therefore that would need to be taken into account before offering the discount.
There are also other issues. If prices of higher-class seats are not maintained, the exclusivity of the higher-class seat may be seen as lower down by traditionally loyal customers. This means that by lowering prices, airlines may be offending their loyal customer base. To make matters worse, socially, if certain groups are allowed to access resources at a discount this may further offend.
What is on offer?
Nevertheless, it does appear that airlines do provide opportunities for the less privileged to purchase higher-class seats. British Airways, for example, has at certain times offered business class tickets at a discount, with prices at those times being lower than premium economy tickets. In addition, airlines such as KLM offer customers the opportunity to get higher-class seats at a discount three to four days before travel if seats are available.
As one can see, therefore, it does appear that airlines are offering discounts on higher-class seats. However, there is significant room for improvement given the high overall rate of empty seats generally available on flights. There are however drawbacks to the airlines if they reduce prices too far and offend their loyal core customer base. Nevertheless, it does appear that airlines are taking the initiative to reduce the number of empty higher-class seats. We have to wait to see how this progresses.
Have you seen empty seats on flights recently? What are your thoughts on premium-class seat sales?
