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Airlines upgrade to offset losses

(China Daily)
Updated: 2008-08-01 15:33

Facing soaring oil costs and a dwindling demand in leisure travel, airlines, hotels and travel service providers have turned toward business travelers, heeding their calls for not just space and comfort but also eco-friendliness and efficient travel management.

Airlines are also following businesses wherever they go, cutting domestic lines while adding Asian lines to cities such as Beijing and Shanghai.

At the July 28-30 National Business Travel Association (NBTA) International Convention and Exposition, several airlines unveiled larger, more luxurious businesses and first-class seats.

Continental Airlines, for example, announced its long-anticipated lie-flat seat for the BusinessFirst class, to be retrofitted on Boeing 777 aircraft serving trans-Pacific and trans-Atlantic flights next fall.

The $100 million design and retrofit project also features connectivity to Apple's iPod mp3 player, a universal charger and a 15.4-inch on-demand video monitor.

Not to be outdone, Qantas invited designer Marc Newson, the well-known designer to redesign its A380 luxury experience, including the new First Suite, the new fully flat Skybed for business class, and even Marc Newson-designed amenity kits.

Japan Airlines (JAL) and Singapore Airlines, known for their luxury seat designs and in-flight services, also upped the ante on upper-class cabins.

In September, JAL will have removed the existing 11 first-class seats on its trans-Pacific flights and replaced them with eight, larger suites with the latest audio-visual amenities.

Singapore Airlines unveiled the Singapore Suite, a class beyond First featuring down duvets and Givenchy PJs.

How do struggling airlines afford to spend on upgrading luxury seats and lower seat counts at the same time, you might ask. Maverick airline JetBlue was the first to figure out that cutting a few seats while giving customers more of what they want would end up improving the bottom line, as fewer passengers would mean lower fuel cost and more customer satisfaction would lead to retention in this gloomy travel climate.

The NBTA convention, with 6,400 registered attendees, also saw new trans-Pacific lines added while many US domestic flights were cut earlier this summer.

India-based Jet Airways started a San Francisco-Shanghai line in June, and it plans to fly from San Francisco to Tokyo in September.

Hainan Airlines is happy about its Beijing-Seattle daily flight inaugurated in June, and it plans to open a Beijing-Boston flight in 2009. Dubai-based Emirates announced two new lines, San Francisco-Dubai and Los Angeles-Dubai, to begin in October.

While business travel costs are expected to go up by about 6 percent, according to an NBTA spokesperson, corporate travel managers saw new benefits such as wider mileage alliances and more eco-friendly airlines and aircraft.

The much-anticipated Boeing 787, for example, will use 20 percent less fuel, featuring a one-piece fuselage section, eliminating 1,500 aluminum sheets and 40,000-50,000 fasteners.

Qantas, after refitting its A380 planes with new luxury seats, said they are now 50 percent quieter and 10 percent more fuel-efficient per person.

Continental, which has a mileage partnership with China Southern Airlines through the SkyTeam Alliance, announced in June it would join United's Star Alliance.