Singapore

Paying a premium could be economical

Singapore Airlines hopeful customers will find value in paying more for extra comfort

Singapore Airlines (SIA) is banking on premium economy services to entice travellers to pay more for extra comfort.

About four in 10 SIA planes now offer the service, in just over a year (since August 2015) since it rolled out premium economy cabins, which offer perks such as more legroom and better food.

And the carrier said it will continue to retrofit more aircraft with such cabins to meet traveller needs.
Demand is especially strong on long-haul routes, said SIA spokesman Nicholas Ionides.

The premium economy cabin include features such as wider seats with greater recline and legroom.

First introduced more than two decades ago, such cabins are now found on more than 50 carriers worldwide, including American, European and Asian airlines.

Airlines that have rolled out such cabins in recent years include SIA and Hong Kong's Cathay Pacific, which introduced them in 2012.

Middle Eastern airlines which have so far resisted the option are now seriously considering it as well.
Premium economy services have caught on as they are popular with travellers who do not mind paying more for extra comfort, especially on long-haul flights.

Cost-conscious businesses are also turning to it as an option for their executives on work trips, experts said.

A premium economy ticket can cost upto 1.5 times more than an economy fare, though this also varies depending on routes and time of travel. "The difference between the economy and premium economy fares for last minute bookings can reduce significantly to just around 20 to 30 per cent in some cases," said Mr Akshay Kapoor, director (Asia-Pacific) at CWT Solutions Group, which manages travel for corporate clients.

While most airlines have taken a keen interest in the premium economy product, most tend to roll this out rather cautiously, he said.

The number of premium economy seats is typically below 10 per cent of the total number of seats on the aircraft, said Mr Kapoor.

One concern that airlines have is that instead of economy travellers upgrading, business travellers could end up downgrading.

Mr Brendan Sobie, a Singapore-based analyst at the Centre for Aviation think-tank, said: "The idea is always to upgrade economy class passengers rather than cannibalise business class. However, there is always some cannibalisation."

At Cathay Pacific and SIA, premium economy passengers are a mix of those who have downgraded from business and those who used to fly economy but are increasingly drawn to premium economy, especially on long-haul flights to North America and Europe.

However, given the uncertain global economic outlook, experts expect more business travellers to downgrade.

Mr Kapoor said: "With continued economic uncertainty expected over the next few quarters, we believe that organisations will increasingly be seeking avenues to drive savings in their travel spend without having to cut down on the amount they travel.

"Taking premium economy over business class could save 60 to 70 per cent of the airfare and allow for more trips to a destination for the same dollar amount."

Mr Rayman Som, 51, a human resources director who travels four or five times a year, has flown twice on SIA's premium economy class on company expense.

He said he took a short flight to Hong Kong the first time so it did not make much difference. But he flew to Paris the second time and it proved a different experience.

"The wider seat, more leg room and further recline was much welcomed on the longer flight," he said.

He added:"Would I pay out of my own pocket for premium economy? For a short flight, no. For longer journeys, it makes sense if the price is right. I think 30 to 40 per cent more is reasonable."

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