An unrecognizable air travel landscape, lost in an array of new and unanticipated transformations, is no longer limited to the economy cabin. Bundled in-flight services have, controversially, been ‘unbundled’ for business class passengers too. Passengers in business class are increasingly subjected to the self-service model that has dominated economy travel for years. This has made premium business travel expectations highly unpredictable and continues to erode the essence of the business-class passenger’s flight experience.
From Complimentary Baggage to Lounge Amenities: The Unbundling Phenomenon
The unbundling trend surfaced in the 2010s when airlines began introducing strict limitations on service economy fares. Checking a bag or even bringing a carry-on has swiftly evolved into a chargeable service. This trend of paying for previously complimentary services is now common in premium cabins. Business class travelers now face the inability to settle for complimentary checked luggage, lounge access, and seat choice.
Etihad’s New Model: A Glimpse into the Future?
Etihad has become the latest airline to show a major shift in its business class pricing and tier system with the introduction of three tiers: Value, Comfort, and Deluxe. The complications arrive when customers seek the most basic package, which scraps additional seat reserving, chauffeur services, and lounge access. Etihad claims to provide more flexibility to their customers, but this approach raises concerns that weaker versions of business class experiences will become the norm across several other airlines.
A Growing Trend: Airlines are Paring Back the Perks
Etihad isn’t the only one trying to remove bundled perks from business class travel. Significant airlines such as Qatar Airways, Air France, and KLM are testing these unbundled options. It could be claimed that the trend originated with Emirates, who introduced a “Business Special” fare in 2019 that omitted advantages such as chauffeur service and lounge access, also commanding a set price 5-15% lower than standard fares. Finnair, too, has started experimenting with unbundled fares, like the “Business Light,” which removes baggage checks, even when traveling long distances.
Consumer Fatigue: Are Airlines Overplaying Their Hand?
With the increase of unbundling fares in both economy and premium services, unbundling increases the chances of consumer backlash. According to some, industry experts blame airlines for going overboard; they argue that airlines risk permanently losing customers who feel ‘nickel-and-dimed’ for products that used to be included. For instance, Powell of Loyalty Lobby chastised Etihad, saying, “They shouldn’t be cheap and try to lowball their premium customers. It’s not like tickets suddenly get cheaper because of this; it’s a cutback!”
Airlines’ Defense: Choice and Flexibility
Defending unbundled fares, airlines claim that during the fare unbundling, services offered are unbundling, an airline simplifies paying for a ticket, and more options are provided to clients. For example, a number of business class fare customers, particularly loyalty program participants, benefit from perks such as lounges. Additionally, they argue that passengers on short business trips would appreciate traveling light with just hand luggage, and it’s a plus to have the option to pay for a lower-priced fare.
The Price of Premium Class: What Makes It Valuable?
The unbundled fares, which are checked and serviced by business class, depend on how high or low the perceived value is. Airlines, as Nastro says, go with the business strategy, “Travelers are given back the ‘choice’ to add what they want or need.” This means that the savings made in the “basic business” fare are expected to be used to increase revenue as passengers pay more for a better seat. But as we have seen, there is a question of whether a business class offering enabled the demand to exceed sufficient value in exchange for what is charged as a premium.
Porous Brand Image: Principles of Line Maintenance
Basing their analysis on other brands, some experts seem to have more worries in terms of branding and unbundling airline services. The IdeaWorks airline consultancy head, Jay Sorensen, says that it is a risk adding a la carte unbundled optional charges. From a different perspective, he cites the example of some LCCs that operate flying buses without caring for brand image. Those flying bus types start embracing airline LCC-style operating definitions instead of focusing on perception.
Sorenson aptly compares the potential for misplaced brand identity and reduction of prestige to the blending of service styles by a hotel, whereby a Holiday Inn Express is added to an InterContinental hotel.
The Future: An Echo of North America?
Etihad is leading the way on something, and the rest of the airline industry is paying close attention. There are predictions that further airlines may move in a parallel direction. If Delta fully implements an unbundled business class, Nastro argues that American and United are likely to dive in headfirst as well. This poses the opportunity for a widespread altering of business class, especially amongst North American airlines.
Business Class as a Balancing Scale
Competition remains tight as the entire airline industry faces a blending balancing act. They must discover new streams of revenue alongside maintaining favorable pricing sufficient to attract passengers, all while holding on to the premium business class value that makes the fare justifiable. It’s likely that the future of business class will further open the boundaries of fare unbundling, but care must be taken not to lose a loyal base and tarnish overall brand image. Trusting in such a strategy will sustain reputation. Airlines need to offer real value and an inviting experience, albeit in a more ‘pick-me-up’ environment, on the non-structured plan.
