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Changing World, Changing Aircraft

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Aircraft Interiors Expo

Airbus recently showcased its cabin innovations at this years’ Aircraft Interiors Expo in Hamburg, Germany – the world’s largest event dedicated to aircraft interiors. Airbus chose this April event to  raise market awareness of how changes in the global economy, as well advances in information technology are providing airlines with new consumer bases, as well as the means to better understand them.  A key benefit of airlines having a more accurate understanding of their travellers’ wants and needs is that they are better able to define their products and services.

 Changing World

 Air travel is a growth industry, but the growth is not occurring in a homogeneous way. Airbus’ 20 year Global Market Forecast which is published annually, defines an air transport industry that is both doubling in size every fifteen years – as well as becoming increasingly dominated by the faster growing emerging economies of the world and in particular the Asia-Pacific region which is home to India and the People’s Republic of China. The accessibility of air transport to whole new sections of the world population is transforming our industry, with airlines of all kinds seeking to offer products and services which will satisfy this booming demand.

Another emerging trend in the airline industry is the growing capability of airlines embracing ‘Big Data’ and data analytics – transforming dusty databases of raw customer data into valuable consumer intelligence. A key goal in this area is to be able to identify more refined clusters of like-minded customers, in order to supply products and services more adapted to consumer needs and means: Where once airlines characterised customers in black and white terms, now they see them in a more refined and colourful spectrum. This trend is especially impacting economy travellers, and consequentially, the economy cabin.

Changing Aircraft

 Trend to full lie flat business class products

With up to 60 percent of corporate travellers now flying in economy cabins, demand for Business and First Class travel has remained significantly lower since the 2009 global financial crisis. This is forcing many airlines to re-evaluate their premium products in order to remain attractive to business travellers and high-end consumers.  Airbus estimates that within five years, 85 percent  of long-haul aircraft will be operated with full-flat seating. Airlines offering seats which provide individual aisle access will increasingly distinguish themselves from competition, by using this feature to highlight the increased privacy offered by their products.

The rise in popularity of Premium Economy

One consequence of the trend to full-flat seating is the wide gap in comfort standards now being created between Business Class and Economy Class. Airbus calls this gap the ‘Comfort Canyon’. The number of airlines ‘Crossing the Comfort Canyon’ by installing Premium Economy cabins has tripled from nine in 2008, to 26 in 2014. Airlines are particularly interested in Premium Economy because it helps them to address the revenue impacts of the fall in premium traffic. Premium Economy is now a means to bring a yield premium back into the corporate travel market.  On long-haul configurations, the best way to extract maximum revenue from Premium Economy is to offer a seat significantly different from the one in Economy, usually with one seat less per row, typically 19 inches wide and above. When well implemented, the revenue per square-foot of Premium Economy class is equivalent to the one of Business Class.

Differentiating the Economy product

Meanwhile, it is in the main economy cabin, that the biggest impact of the ‘Emerging Economy’ and ‘Big-Data’ revolutions can be felt, with a drive for airlines to offer differentiated seat comfort standards. Many airlines have learnt how to match improved seat comfort levels to wealthier passenger segments, with abundant examples of front-row or exit-row seats being sold to generate ancillary revenue, or of airlines configuring a section of the Economy cabin to provide more space.

Elsewhere, full-service carriers are diversifying their brand portfolios and creating sub-fleets of long-haul and short-haul aircraft configured with denser cabins. This is enabling them to offer lower ticket prices to the more price sensitive segments of passenger demand.

Comfort Economy and Budget Economy explained

Airbus is the only manufacturer to offer aircraft that are economical to operate with both Budget Economy seats with the most passengers per row possible, as well as Comfort Economy seats, where passengers can relax on board without being squeezed at the shoulders.  Comfort Economy seats are typically 18 inches wide and give passengers more immediate and durable comfort levels, and interestingly in surveys, the increased seat width also leads to a passenger perception of improved pitch related comfort.  The role of Comfort Economy is particularly important in long-haul travel and for mid to high-yield passenger segments.

The role of Budget Economy – with its typical 17 inch seat width – is for shorter duration flights, as well as for price sensitive passengers who are willing to trade a reduction in seat comfort in order to obtain the lowest possible ticket price.

The Airbus advantage

Airbus provides its airline customers with a diverse range of cabin configuration options:  from First Class Suites,  through multiple Business Class seating options, to three distinct levels of Economy Class products:  Premium, Comfort and Budget Economy. We are proud to offer a single-aisle Comfort Economy product as standard on our A320 Family aircraft. And on our widebody fleet, operators have the choice and flexibility to install one or more Economy Class products – depending on the specific needs of their customer base.  This flexibility to configure aircraft with multiple cabins to maximize yield and passenger revenues has been a hallmark of Airbus design since the very first A300B took to the skies over 40 years ago.