First Class Is Dead. Long Live First Class

Qantas is suspending first-class service on three of its long-haul routes.

It’s a sure sign of the times, but is it the first step toward the transformation of major airlines toward one-class service? I don’t think so. What’s happening here is, I think, more of an evolutionary shift.

Over the past several years, major airlines have been dividing their cabins more finely until many larger aircraft had four classes: economy, premium economy, business and first class. At the same time, ventures into Southwest-style one-cabin subsidiary airlines, such as Delta’s Song, fell apart.

Then came the economic  meltdown and a collapse in the demand for expensive, premium seats. The impact on airlines has been devastating. United Airlines, for example, reported in 2007 that 8 percent of its passengers were providing 36 percent of its revenue — and that’s precisely the 8 percent that has gone away or downgraded tickets.

In response, major airlines might try the one-class, one-cabin solution but for a few inconvenient facts. One is that their aircraft are already laid out in multiple classes, and  they’ve already tried and failed to do it with subsidiaries. Another is that they don’t  want to give up the big scores of premium class travel in good times in return for the steadier and more reliable earnings of an airline like Southwest in all (or at least most) times.

Like Qantas, more airlines might suspend first-class service and upgrade business class travelers to first without changing their cabin configurations. And then they’ll wait for the good times to return.

“We will monitor demand on these routes carefully and aim to reintroduce our first class offering as soon as possible,” a Qantas executive told Reuters.

But there is an evolutionary shift coming,  the kind where one species crowds out the other.  The major airlines won’t, and perhaps can’t, transform themselves into low-cost, single-cabin carriers. But serious attempts at starting new airlines will likely continue to involve one-class service, and any survivors will put additional pressure on the legacy carriers.

I’m not about to predict the extinction of those carriers, but I’d agree with the analysts who believe the industry is in for more mergers, more bankruptcies and possibly some outright collapses.

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