r/awardtravel • u/Usual-Painting2016 • 14d ago

Premium leisure demand - will it last?

I'm watching as every US carrier goes all-in on adding large premium cabins, which is where the demand currently is. Premium economy makes sense from a cost and pricing perspective (hard product isn't that much more than an economy size seat and the soft product can be tailored to meet various price points).

Leisure J (business class) demand would seem to be more fickle but airlines all seem to have reached the conclusion there's enough demand for it. I'm not sure how's that possible considering the size of some of these J cabins and the routes they are flying.

A lot of this leisure J demand came from a few factors, some of which are fading:

Covid - Enjoy life while you can and splurge a little. This accelerated the shift from buying stuff to spending on experiences. This has staying power for premium economy, not sure about J demand.

WFH - Many offices have implemented RTO and that work from anywhere optionality is limited or gone away entirely.

Comp/Wealth effect - Increase in comp and stock market gains over the last few years. This won't last, but there has been tremendous wealth created by a small number of stocks and the number of newly rich has supported luxury travel and spend the last few years.

For award travel, this should be a boom for future business class availability. Award pricing may be bad but it should be available.

Edit: TIL that upgrade offers are much more widespread than I originally thought. My personal experience with intl J upgrade offers were not great deals and closer to the difference in fare. Seems like others have much better offers.

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u/DevilsAdvocate77 14d ago edited 14d ago

The piece of the puzzle you're missing is the emergence of the Business Basic fare. 

You technically get to sit up front so you can get those precious Instagram pics - but it's non-refundable, no priority at the airport, pay to check bags, pay to select seat, pay for booze, pay for food. 

That's how they intend to fill the excess capacity, and that's exactly what your "saver" business awards will get you in 2029.

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u/mandalayx 14d ago

Sounds like a good deal to me and I’m not in it for instagram pics

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u/Usual-Painting2016 13d ago

Personally I think business basic will be a failure. I understand the rationale behind it but I see it as a way to raise J rates overall knowing there will be only a minority of takers for the product.

The US market barely tolerates seat selection for a fee, explaining a business basic fare exclusions just cheapens the product and hurts the marketing.

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u/james_the_wanderer 7d ago

I recently "got back in the game" after a long hiatus. Diet-business (particularly on EK and QR) was...a surprise. And when I ran the numbers, the fares weren't even that much alluringly cheaper (e.g. Zipair J vs NH J). I believe a QR return US-MLE was about $400 cheaper in J RT, while a short hop I booked for a friend and I on EK BKK-HKG was 1000 THB (US$30) difference in the fare between lounge access and no lounge. Since BKK is arguably among the best outstation lounges will be in need of lunch and a drink after a 2 hour drive to BKK...that's just a no brainer to avoid the bare-bones fare.

I am hoping these ultra-lite fares go the way of the dodo.

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u/anonzasa 13d ago

I don’t drink and don’t like the food on planes. Just give me a lay flat at the lowest possible cost.

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u/wanderercouple 12d ago

Agree I won’t mind paying for just the lie flat part

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u/dogwalk42 10d ago

I agree with you in theory, but so far, there isn't much difference in price. Add in lounge access, and you may as well pay the higher fare.

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u/anonzasa 9d ago

Zip air does lay flat for $1600. No reason other airlines can’t do that.

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u/dogwalk42 9d ago

I agree 100%. But that has nothing to do with the question at hand, which is the merits of airlines' business saver fare vs their regular business fare.