Flying to Corona – Airlines want to charge more in the economy – News

Swiss also wants to make up for the loss of business travelers in business class with price increases in the economy.

Business travelers flying business class or first class are the financial heart of global airlines. The 10 to 15 percent of the most profitable business travelers generate up to 40 percent of passenger revenue. In the Lufthansa Group, to which Swiss belongs, it is even half.

Airlines seek solutions

But these days business travelers are drifting away and some of them won’t be returning to Corona either. Because companies will continue to hold business meetings virtually because it is cheaper for them.

Airlines have to react to this development. American airline expert J. Sorenson used various data to calculate how many business travelers are no longer on the plane. He says that commercial aviation will never return to 2019 levels, but will be 19 to 36 percent below. For airlines, this share is lost forever.

As global airlines are building flight schedules and price structures for economy travelers around profitable business travelers, the contraction of the business segment has consequences for budget travelers as well.

A more expensive economy class

Sorenson believes that airlines may react differently to the loss of profitable business customers. They could cut flight times, fly to destinations less frequently, or offer more Premium Economy seats, which are more expensive than Economy but offer a bit more comfort.

Swiss also wants to make up for some of the loss of business travelers with more expensive premium economy seats, says outgoing Swiss boss Thomas Klühr. He believes that the Premium Economy product, which is currently being introduced, will play an important role for the Swiss, both price-sensitive business customers and guests looking for a little more comfort in the economy.

Long-term rising prices

That means: more expensive premium economy seats at the expense of regular economy seats and business class seats. The remaining regular economy seats will also be more expensive, if not yet in the next year.

Because, according to Klühr, tough competition will arise in rebuilding networks. Therefore, there will probably be stable prices, rather downward, in the short and medium term, but rising prices in the long term.

The Swiss boss also justifies the price increase for budget travelers with the future CO2 tax. Airline expert J. Sorenson predicts that 2021 will continue to be a bargain year for tourists.