Why private jets will ensure death of First Class
Throughout the 20th century, especially the first half of it, traveling on board an aircraft was the epitome of luxury. Few could afford flying, as ticket prices were sky-high. The passenger that flew in a sleeper cabin on board a DC-3 probably could not imagine sitting on a Boeing 737 or an Airbus A320 seat that does not even recline and is as wide as a screen of a television. Since then, while economy-class flying took over the masses, luxury travel was and still is around. However, First Class, which is the last remnant of the golden days of travel, is succumbing to a slow and painful death.
And the process could be further accelerated by the 1-2 combination of business aviation and the current pandemic.
Nostalgia for first-class luxury
Possibly a lot of people who were not around for the golden age of aviation are nostalgic for the same, aforementioned golden age. On the other hand, the wistfulness is there for a good reason, as luxury was the name of the game. For example, Lufthansa (LHAB) (LHA), in order to compete with other airlines that were already flying the Boeing 707 on trans-continental routes launched its “Senator” luxury service in November 1958.
“While the “Super Star” [Lockheed L-1649 Starliner – ed. note] carried up to 86 passengers on all-Economy Class flights, its “Senator” services offered only eight First Class seats, 18 Deluxe seats and four beds, for a grand total of 30. The walls of the elegant lounge were covered in leather. And the cabin crew was upgraded to include the airline’s own specially trained, in-flight chef, who prepared dishes à la carte, including potato pancakes, a dish highly appreciated and frequently requested by passengers,” Lufthansa (LHAB) (LHA)’s historical chronicle describes the service on board its Lockheed turboprop.
But luxury and service unlike any other were inseparable from the name Pan American World Airways, or Pan Am. The Juan Trippe-led airline dominated the United States’ skies with its excellent service and unmatched passenger experience on board, until its unfortunate demise in the early-1990s. Hearing or seeing the name Pan Am invokes a feeling of warmth that is full of sentiment even if one has not flown on the airline.
Other airlines were also in the race to attract customers by offering their best for passenger experience. There were no websites that could compare different carriers’ ticket prices on the same route – while the price was still important, it had less emphasis back then. After all, low-cost carriers truly penetrated the market in the 21st century, including attempts to challenge legacy airlines on long-haul flights.
At the same time, air travel has come a long way in terms of comfort, safety and speed. Service, arguably, is not worse either. Perhaps it has lost its romance due to the fact that luxury, usually reserved for the rich, is now available to the masses to a certain extent through loyalty programs and deal-hunting. The growth of the middle class is also vividly evident, even in regions that were less developed or isolated from the outside world during the Cold War, further contributing to the general availability of business and first class.
Squeezed between economy and business
But the role of first class has shifted over the years, especially as airlines are more inclined to save on costs. First Class is an expensive venture in terms of the seat and the space it takes up in an aircraft, minimizing the amount of profit an airline can potentially make. An empty first class seat is more expensive to operate than a business or economy class seat, including the fact that first class pods or suites are almost as wide as three economy seats. At the same time, corporate travel is crucial for airlines, as business travelers do not mind splashing money on more expensive tickets as the need to travel emerges suddenly, rather than leisure passengers, who book tickets beforehand.
“Business travel, which typically provides 50% of our revenue, has not yet returned in any meaningful way,” Ed Bastian, the chief executive of Delta Air Lines, commented on the company’s Q2 2020 results.
Delta Air Lines was one of the airlines that slowly phased out its first class seating and replaced it with an expanded business class offering. The company launched the Delta One Suite in 2016, describing it as a redefined “international business class” seat. The suite made its debut in 2017 with the introduction of the Airbus A350 into Delta Air Lines’ fleet and was gradually introduced onto other aircraft.
Much like the aforementioned Lufthansa (LHAB) (LHA), whose newly delivered A350s do not have a first-class on board. The airline’s 777X will not feature a first class cabin either. Instead, the airline will offer its passengers the option to choose from two variants of business class seats.
“It's not just one business class anymore,” Harry Hohmeister told Executive Traveller in June 2020.
And the trend of gradually phasing out the first class along the renewal of a carrier’s fleet is clearly visible within the industry. While there are a few exceptions to the trend, as always, Qantas, Air New Zealand, Air France, Iberia, and United Airlines are some of the more prominent examples where newly delivered aircraft include an upgraded business class product, rather than a first class cabin.
Enter the Private Jet
As the golden age of travel developed with glitz and glamor throughout the world, quietly, private jets were beginning their journey into the mainstream. The Lockheed JetStar entered into service in 1961 – a private jet that could seat between eight to 10 passengers, with an operating range of about 4,800 kilometers. The JetStar laid down the foundations of business aviation, including the fact that individuals could now buy and fly their own personal jets without having to meddle in airport terminals with your average plebeian.
Over the years, private jets have evolved into a league of their own. If the JetStar’s range was around 4,800 kilometers, the Bombardier Global 7500 can cover a distance of up to 14,000 kilometers. In March 2019, the Canadian-built business jet broke the record of the longest private jet flight, as it flew from Singapore Changi Airport (SIN) to Tucson International Airport (TUS) in Arizona, United States – a distance of 15,764 kilometers. While the flight was performed under special conditions as noted by Bombardier, it still showcased the capabilities of modern private jets and their ability to fly as far as modern airliners that serve as long-haul workhorses.
The downside, however, is the cost of owning one. The same Global 7500 is listed at around $72 million at list prices. For comparison, an Airbus A220-100 is worth $81 million, while the Boeing 737-700 is priced at $89.1 million. While a lot has to be considered before the final price of an aircraft is presented, including concessions from manufacturers towards their airline customers, it does point out that private jets can be as expensive jetliners, without the potential of generating millions of revenues for their individual owners.
Comfort, flexibility and isolation
Nevertheless, there are other options to fly privately instead of climbing a very steep price mountain. A person can buy shares on a private jet and book within a certain period of time before traveling. Another option is to lease an aircraft – instead of buying shares, leasing helps a user to avoid an initial acquisition cost, albeit a lower one than full-pledged ownership. Private jet companies also offer the opportunity to book individual seats on flights between two destinations. Flexibility comes at a price, though: a one-way flight from Los Angeles to New York with XO, a private aviation company, can be as much as $3,800. On American Airlines (A1G) (AAL), a first class ticket on the coast-to-coast itinerary stands at around $1,000.
However, what private aviation companies do offer is unparalleled comfort and flexibility, as well as isolation, as separate terminals and boarding areas are nothing out of the norm. In light of the recent pandemic, the isolation, flexibility, and sometimes even unprecedented access pushed business aviation to recover very quickly when compared to its counterpart, which is accessible to the regular Joe.
According to an update by NetJets from July 2020, another private aviation company, its flight volumes were down as little as 20% compared to normal pre-pandemic levels. While its United States-based business was not affected as much due to the sustained demand for domestic flights, NetJets‘ European side of the business furloughed its workers in April. In July 2020, however, the decision was reversed as demand once again increased.
“There is a strong increase in new owners joining NetJets,” read a press release by the company.
In contrast, numbers published by the International Air Travel Association (IATA) for the same month, showed that commercial aviation remained paralyzed. International travel demand dropped as much as 91.9%, despite capacity rising to 85.2% of July 2019 levels.
Pandemic to highlight business aviation benefits?
Despite the same conditions affecting aviation, different sectors of the industry are weathering the storm differently. Flying a private jet offers additional peace-of-mind when traveling.
Private terminals, while offered by some airlines, are not available at every airport. Much like the fact that, despite being isolated in first class from the rest of the aircraft, transmission can still happen through the crew or mutually touched surfaces.
The quick-paced recovery of business aviation does showcase that those who are able, are also willing to spend extra to be safe while traveling.
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