Over at Fortune, Christopher Elliott says that suffering economy passengers are subsidizing the perks for premium cabin passengers. In fact he has it exactly backwards. (And I will totally admit up front that I lost my cool reading this.)
Airlines offer top perks to compete for the business of lucrative business travelers who:
- Spend much more over the course of a year, booking 100 flights a year not just two or four
- Spend upwards of $5,000, $10,000, or more on a single premium class roundtrip. (The perks do not cost an airline the difference between the coach fare and the amount paid by these passengers.)
Indeed, it’s this lucrative business that in most cases and for most airlines makes the flight possible. And then they sell excess seats that would otherwise go empty at a deep discount. Since they are going to fly the plane anyway, it is better to get some revenue out of the seat instead of no revenue. Hence the ability to fly cheaply on a major airline.
(Ultra low cost carriers flying leisure routes with far less legroom and many more fees than the major airlines charge are of course a different matter. They pack in lots of passengers and keep costs as low as possible. But those aren’t the airlines Elliott is writing about.)
Elliott begins with his ‘parade of horribles,’ all of the super-luxurious perks that premium flyers have access to. Not a single one is being subsidized by economy passengers, and Elliott doesn’t even have his facts right because some in his own list are available to passengers flying economy!
- “A chauffeured ride” United, Delta, and American all have cars that can drive their most profitable customers (most often Global Services, 360, and Concierge Key respectively, usually flying in paid premium cabins) across the tarmac usually to help them make tight connections in the event of a delay.
- “Your own private entrance” Elliott mentions Delta’s newly completed terminal at LAX which has a premium entrance. American’s terminal there has one too. But he could just as easily criticize premium check-in.
- “Private lounges for the “best” customers” airline lounges are not new of course. The first one opened 75 years ago, and was the result of populist outrage (not the cause of it). Anyone can pay to access most US airline lounges, in fact the very reason why US airlines sell memberships in their clubs is to ensure egalitarianism, that there’s no discrimination in providing access.
- “Onboard butlers and nannies are coming” This one is extra strange. Etihad is most known for flying nannies and offers the service in economy. Etihad also offers the ‘onboard butler‘ only for passengers of their Airbus A380’s single ‘Residence‘ — a flight that costs over $20,000 one way between London and Abu Dhabi. In any case, the butler is simply a marketing gimmick meant to create a ‘halo effect’ for the rest of the airline and certainly not offered at a loss for those passengers buying the seat.
- “Private copter or private jet?” Delta is offering upgrades to private jets on a very limited basis to eek out revenue from positioning aircraft that would otherwise fly empty. In other words, it is a strategy to earn a revenue premium — not something that economy passengers are subsidizing. He also mentions that Continental used to bundle helicopter service to Newark with business class flights as a way of luring downtown passengers especially on the East Side away from JFK. The cool thing? You could even add 10,000 miles to a business class award ticket to get this service.
- “Smart seats that massage you” Umm, sure. United’s business class recliner seats in the mid-1990s offered a massage function. It clearly doesn’t take a subsidy to offer recliner-style business class.
- “No waiting” Elliott reports “Prescreened VIP passengers will bypass everyone and go from their car to the gate in 15 minutes for international flights” of course anyone can do that who signs up for the government’s TSA PreCheck or Global Entry and checks in online or at a kiosk.
There are over the top amenities, to be sure, like showering in an airplane.
But none of these amenities are funded by making cuts to economy class. (Though there was a conspiracy theory back in 2008 that the water for Emirates showers was made possible by removing paper from the seat backs in coach.)
Airlines are businesses. Why would they choose to lose money on their premium passengers, ‘subsidizing’ those experiences? Elliott doesn’t even offer a theory of business here to explain it.
In fact, he merely asserts it:
Consumer advocates say passengers in the back of the plane are effectively subsidizing these new luxuries by giving up personal space and accepting more restrictive terms on their tickets. In other words, economy class passengers are paying for these amenities without being able to enjoy them.
- He doesn’t offer any mechanism for how or why this happens.
- He doesn’t cite any ‘airline industry experts’
- Instead he offers unattributed “consumer advocates”
More fees in the back, more freebies in the front. The rich get richer. And the rest? Well, they don’t call it “economy” class for nothing.
The biggest irony in the whole column is that the bulk of these perks are available to consumers redeeming their miles for premium cabin travel. And Elliott advises readers not to participate in those programs, to ‘cut up their cards’, calling them scams. The scam, unfortunately, is taking advice from Elliott himself.