Possible Stupid Question: If Business class and Premium Economy are the real moneymakers, why don't airlines focus on them?
Posted by SPC4350@reddit | aviation | View on Reddit | 50 comments
Basically what the title says - I've often heard that Business Class and Premium Economy are what actually makes money for the airlines and that they oftentimes operate First and Eco Class at razor thin margins or even losses. That begs the question (at least to me) why some airlines don't cut out Eco entirely and only cater to higher end passengers.
I've heard of some niche cases of Business-only flights, and understand why they might want to keep First Class (Associated prestige, retaining Brand loyalty by keeping the opportunity for people to upgrade etc...) but operating less profitable or unprofitable Economy class out of "altruistic reasons" and "making airtravel available to the masses" does not make sense in to me in my (granted very limited) understanding.
SirLoremIpsum@reddit
If they did not operate economy then they would not have as many routes.
The fact that premium economy still only makes up a small % of the plane shows you how many people book purely on price and would not pony up the extra cash
spacecadet2399@reddit
It's because there are only a certain number of people on a given route who are willing and able to pay the higher class fares.
Every airline would have 100% business and first class if they could. There just aren't enough passengers to support that. Lots of airlines actually have tried that, but it's always small startups who do and there's a reason for that. The big airlines have experience and big market research teams and they've spent decades tweaking their cabins to have just the right mix. These new startups coming along thinking the same thing you're thinking - "why not just have a cabin that's nothing but business class!" - and they almost always go out of business in just a few years.
The premium cabins make a lot of money when they're full. The trick is filling them. In most cases, you just can't fill a planeload of business or first class passengers.
That said, a lot of airlines do have multiple configurations on some routes, some of which are more business class than economy. ANA does this on their NYC-TYO routes, for example, where some of their planes are about 2/3 business/first. They've learned that they can do that on that route through experience. But not every airline can, and certainly not on every route.
Ecthelion-O-Fountain@reddit
If they could find that many people that would pay for premium cabins, they would only have premium cabins. There are niche airlines that do this. They only have a little success.
Reaper-fromabove@reddit
Wasn’t that the concord’s plan basically.
Just cram a plane full of rich people.
Ecthelion-O-Fountain@reddit
Even then, it failed economically.
Cmdr_Shiara@reddit
It worked for BA and Air France as they wanted to keep flying them, it was Airbus that stopped making spares for them that forced the retirement. Though the airlines did get the actual aircraft for free so whether it was economically successful depends on who you ask.
Ecthelion-O-Fountain@reddit
They didn’t make money, it was a prestige thing.
Boojum2k@reddit
Occasional rich people, plus a lot of high end business types.
Miraclefish@reddit
Because there aren't enough people who have the money, and are willing, to pay for Premium Economy and Business Class on almost all flights.
There are a couple of flight routes that only have business class seats but they are very few and far between.
You simply cannot fill planes with only premium passengers.
Also, and this is just human nature, but without basic seats, the upgrade of premium or business doesn't seem so exclusive.
You need people to be having a better experience than to justify the upsell. Nightclubs can't all be one VIP area, flights generally aren't all business class.
YOURE_GONNA_HATE_ME@reddit
The logic that the exclusivity feel is kind of backwards. It’s going to feel a lot more exclusive flying on an all first class/business flight than one with a split cabin.
And the people up front generally are used to flying first. They don’t get the longing of wanting the seat. They just book it. It’s us poors in back that have the fantasy
devildog2067@reddit
I pay for the seat up front in part so I can get off the plane quickly. I wouldn’t pay for the same seat all the way in the back. Disembarking first saves me 30-40 min.
DonkeywithSunglasses@reddit
Brother there is literally a separation between you and the ‘peasants’ in economy, the feeling of flying a full biz class doesnt reach that I believe
Miraclefish@reddit
Exactly, the difference in experience is the selling point for people.
That's why they can change absolute bank for VIP tickets to concerts and private tables at clubs.
Miraclefish@reddit
You've missed the point. An all Premium or all Business class plane may well seem more of a luxury, but that's not the point. It's about being better off than the standard people in economy. They pay 10x the amount to fly because they get visibly better treatment.
Often people with wealth like feeling and seeing the priviledges of wealth. You can't sell a VIP ticket to an event if every ticket is VIP. If everyone is important, nobody is.
The looks of jealousy and curiosity of other passengers as you turn left and they turn right, that exclusivity is what people pay for.
Sorry but I heartily disagree.
awayfromallthis@reddit
That's ridiculous, people fly a premium cabin to make a miserable experience better or more often because their work pays for it.
Adjutant_Reflex_@reddit
I think you’re projecting.
I fly almost exclusively business class now and doing it to try and derive some sort of sense of superiority does not even cross my mind. I do it because it elevates an otherwise pretty miserable 30+ hour experience…and because my chronic back pain makes spending the extra few thousand for a lie flat 100% worth it.
Miraclefish@reddit
I think you're applying your own individual personality to the world at large and coming up short.
Boasting about your luxury lifestyle is a HUGE driver of human behaviour. People are addicted to spending more on newer cars, designer clothes, fancy holidays, financed cars and more.
People are so into showing off that there are countless businesses hiring out fake or grounded private jets for people to do photoshoots on.
The entire point of selling VIP and luxury packages and products is that they're better than what most people afford.
Absolutely there are people who are modest and care only about the service, but there are many many many other people who like being better.
I mean just look at the fucking world.
YMMV25@reddit
There are some instances where this is the case. SQ for example runs A350ULRs with only J and W cabins.
In general, on most routes you need some Y to fill out the aircraft. Obviously very route dependent but on UA’s new 789s for example you see the Y cabin shrunk to the last section aft of the 3L/R doors. This is becoming more and more common in premium markets as Y demand continues to crater, especially for long haul.
YOURE_GONNA_HATE_ME@reddit
Because there is still supply and demand. There are very few routes that you can sell a full aircraft worth of business class seats at a profit. Sure maybe you can get away with it on a route like JFK-LHR where there is a lot of bankers. But JFK-ACC is going to have a significantly less wealthy group of people. You’re going to sell those seats at a loss.
strumthebuilding@reddit
premium seas costs the airlines more to maintain than the price of an economy ticket? How so?
halfty1@reddit
The cost of the pilots, flight attendants, ground crew, and aircraft financing/leasing costs are fixed independent of number of passengers. Fuel need is dependent on weight and weight does go up with more passengers, but it doesn’t scale up linearly with number of passengers. Splitting all those cost over more people lowers the cost per passenger meaning you can offer lower fares and be profitable. Thats why ULCCs jam as many people as they can into the plane sacrificing leg room.
And of course premium seats have premium catering and service which costs more money than economy service. They also typically have perks like free checked bags which is another revenue source airline would be missing out on.
strumthebuilding@reddit
I see
juusohd@reddit
I mean you replace one plastic shroud and it can easily be 200-700 on parts alone let alone labour.
SeaRun1497@reddit
Not all market can sustain it, some do and some airlines do focus on it. For example United uses their high biz 767 between New York and London route, with relatively high frequency, because they can.
fireandlifeincarnate@reddit
Some money is more than no money, and you've gotta fill up the plane somehow. If you've got 20 business class seats and 50 economy seats and sell all of them, that's a lot more than if you've got 70 business class seats and sell 25 of them.
DonkeywithSunglasses@reddit
Perfect answer, the first line is all you need
Dieter-Shaw@reddit
Auch bei geringer Marge bringen die einen Deckungsbeitrag. Solange die Einnahmen größer als die variablen Kosten sind, lohnt sich das.
Me_be_Artful_Dodger@reddit
You’re forgetting the mass public’s opinion that cheaper is better. I would love an exclusively premium eco class (European versions) airline as it’s what I prefer to fly but know it won’t take off (couldn’t help myself) solely on the fact that the public wants the cheapest way to get there, and can’t blame them either.
SmartRefuse@reddit
Spoiler: airlines (at least the American big 3) don’t make money on flying at all. They are credit card companies that happen to fly planes.
FelisCantabrigiensis@reddit
The most profitable seats are on most Premium Economy tickets and some high- or full-price economy tickets.
My company once paid nearly £2500 to fly me across the Atlantic in Economy, because I had to travel and the company policy said "economy only". You can be sure that seat with me in it was sold very profitably, and other economy seats on other flights are sold at similar prices.
Not everyone is going to be able or willing to pay Premium Economy prices so your addressable market will fall, a lot. The aircraft has high fixed costs so you have to keep your addressable market high.
A small profit is still a profit. Don't knock making money through volume sales with small profits - Micheal O'Leary and his share holders are doing nicely out of it as just one example.
mr_dumpsterfire@reddit
I don’t know what these responses are talking about. All three major airlines are shifting their seat configurations to add more business and premium economy seats because they are more profitable. The top 10% earners are making up half of retail purchases.
https://simpleflying.com/why-american-airlines-doubling-down-premium-product-widebody-fleet/
https://www.cnbc.com/2026/03/24/united-airlines-premium-seats.html
poser765@reddit
I thought credit cards were the real money maker.
snowbeast93@reddit
Checkout the Singapore Airlines A350-900 ULR seat maps. There is no economy class on those planes, only business and premium economy for the ultra long haul flights between JFK/EWR and SIN
The roll out on those flights is a blast, you can feel how heavy the plane is with all the fuel during taxi and takeoff
Porirvian2@reddit
I flew premium economy for the first time from JFK to AKL. It is very, very well worth it.
massunderestmated@reddit
Believe me, they are trying to make higher profits. They would if they could.
It's supply and demand. For every hypothetical price X, there is a number of customers who are willing to pay for it Y. Raise the price, fewer customers will buy. Lower the price, more customers. Airlines try to optimize the equation to maximize X × Y. Multiple classes of seats gives airlines the option to have (X1 × Y1) + (X2 × Y2) and the opportunity to better optimize the two halves of the equation.
bcb1200@reddit
UA is investing in premium cabins. They have more seats than anyone else right now.
RickDeckard_PL@reddit
If everythink is premium then nothing is premium
Whatever_Lurker@reddit
Excellent question! Answer: it is a bullshit statement.
It's like this saying that you lose 90% of your body heat through your head. Which, if true, would mean that you could go skiing naked if you only wear a warm hat.
ManageThoseFootballs@reddit
The presence of economy defines premium eco and business. If the cabin was filled with passengers at the same tier they wouldn’t feel like there was any value in the upgrade.
csmarmot@reddit
The psychology of premium pricing would evaporate. Yes, people buy premium because it is a more comfortable way to travel. But they also buy premium to make them feel superior to others.
My impression is that airlines now would rather fly an empty seat than comp a coach passenger to first class, because doing so would devalue the experience from the premium passenger.
zerbey@reddit
Not enough people can afford it, business class and first class will always be a niche item.
caodalt@reddit
Many companies only pay for economy even on longer flights these days
churningaccount@reddit
Economy still makes money.
And people flying economy use airline credit cards and participate in the mileage program, which is where the real money-maker is these days.
The simple answer is there isn’t enough money to operate all business class flights, except maybe on the several most popular routes in the world, like NYC to London.
But, for instance, there are 3 daily flights from SF to Frankfurt. In theory, you could combine those into 1 “all business class” flight. But then your business customers would have less choice of time, and less convenient connections. The airline that added in economy class and provided more flight times would eventually win the most customers.
phlflyguy@reddit
Over the past few years, premium seating demand has gone up for sure. But the market for price sensitive economy budgeted passengers is still big enough to warrant offering the seating.
For wide bodies, the big U.S. 3 airlines have started taking deliveries of premium heavy aircraft to capture this market. It’s also a way for them to offer cash upgrades to existing coach tickets.
cosine-t@reddit
Simply - not all flights can be a 100% business class. There will be a point that flying full business will not make bank
Boris_the_pipe@reddit
There are companies flying just business. E.g. La compangnie. But they cannot fly everywhere , as some destinations are mostly tourists that fly economy.
Mike__O@reddit
Most of the time there wouldn't be enough reliable demand to fill an airplane configured like that. Sure there might be on some route like between NY City to London, maybe some of the routes to/from Hong Kong, etc but by and large there probably wouldn't.
Killfalcon@reddit
Because some money is better than no money, and people who can't afford the cheapest seats give you no money.
The core idea is something called "menu pricing", the idea being that everyone who walks in the door finds something to give you money for. Ideally you sell the big ticket stuff, but as long as it's not losing money you should have cheap options available.
urzrkymn@reddit
I’d imagine the demand for business and premium economy is met by the current supply for any given route. If you gave more space to them they would be unfilled, and you would reduce your supply of economy which would have been filled.
devildog2067@reddit
It would make less money, is why.
You couldn’t fill the plane that way.