Lufthansa‘s in-flight product adjustments seem to come almost in spite of itself. The carrier has bemoaned advances in the business class product standards and, only begrudgingly, has finally come up with a plan to remove the first class cabin from a large number of its long-haul fleet and to introduce a Premium Economy offering. Like most other carriers with such a product the Premium Economy cabin will sit squarely in between the ever increasing squeeze of economy class and the increasing prices of business class. But is it worth the premium price?
The stats on Lufthansa’s Premium Economy seat are reasonably impressive. The company claims a 50% increase in passenger space, though a decent amount of that is at the shoulders, not the waist/seat cushion part of the seat. Depending on where you want/need the extra space the 50% number may be a bit less realistic. The increased pitch is a couple inches more than the extra leg room products offered by the US carriers, much more closely aligned with what other European or Asian airlines have in similar cabin layouts.
Lufthansa is also offering up other benefits beyond the extra personal space, a move which puts the new offering squarely in middle of the pack when it comes to comparable offerings from their competitors. A bottle of water on board, welcome drink, amenity kit and discounted access to the lounge are not hugely compelling on an individual basis. Add in the extra baggage allowance and the total “hard cost” value is probably only ~$150 at best. There are a few other quirks about the product, such as only the front row getting a full leg-rest (others get a foot rest built in to the seat in front) but overall it seems to be a very reasonable offering within the realm of the competition. It is really the extra space at the seat and increased recline that you’re paying for.
And customers will most definitely be paying for this benefit. Lufthansa is suggesting that the average premium for the Premium Economy cabin will be about 600 euros above the lowest economy cabin fares. The premium will obviously not be as significant as customers get in to the mid-priced coach fares (e.g. V/W/Q class) but it the upcharge is still quite significant.
For customers who like to buy the economy class fare and upgrade the introduction of the Premium Economy cabin creates an interesting situation. Lufthansa has said that they do not intend to change the current scenario where economy can upgrade into business class but they are also going to allow “half” upgrades from economy to premium economy or premium economy to business. Full details are not yet available on these new upgrade options. Other carriers with similar offers have eventually restricted coach->business upgrades when the premium economy cabin was introduced. It may prove challenging for Lufthansa to not follow that course of action.
Perhaps the best news is that Lufthansa does not intend to cut the size of business class to make room for the new premium economy seats. That’s especially good for those looking to redeem points for access into business class, something Lufthansa has historically made quite accessible. At the same time, however, it does reduce the total number of seats on board which generally translates to upward pressures on average fares. That 600 euro premium may come on top of an increased base airfare as well.
The first sub-fleet to get the new product is the 747-8i starting later this fall. The full retrofit of all 100+ long-haul aircraft is expected to complete in late summer 2015; Munich will first see the new seats in their A340-600 fleet in early 2015. Lufthansa also hopes to have new award charts which include the premium economy options in mid-2015.
Overall I think this is a solid offering. I’m not completely amazed by it but I think it fits neatly in the market and in to how Lufthansa differentiates their products. Now we wait to see if there are customers willing to pay for it.
- Lufthansa cutting first class cabin on some routes
- Lamenting the proliferation of flat-bed business class
- Celebrating the Inaugural 747-8i: In flight
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