Introduction
On 9 June 2016, new came out that the Emirates Airlines was considering introducing the Premium Economy Class into its fleet of the airline to serve in some of the existing route and other new routes. The main idea behind the initiative was to increase the traffic and enable the airline to effectively penetrate new destination and give it a competitive advantage in the aeronautic industry. Additionally, the introduction of the premium economy class will help in branding the company and make it a household name among travelers hence translating to increased customer base. Premium economy class is an airline service that is a combination of both the business class and the economy class, it has sophisticated features which distinguish it from the two classes (Belobaba, Odoni & Barnhart, C. 2015, 23). The most evident feature of the premium economy class is the cabin layout and the extra services that are offered which make it unique and admirable to the customers. The introduction of this service by the Emirates Airlines will be an advantage and another initiative that will push it ranks even much higher in the gulf region. Additionally, it will allow it to have a good business relation with some of it business partners who have already introduced this unique service. In a nutshell, the introduction of the premium economy class is a concept that is long overdue and the Emirates Airlines cannot overlook its introduction into its business line. This paper seeks to analyze the factors that will determine the success or failure of the premium economy class, further, the paper establishes the route that are likely to be efficient for this service. The draft also evaluates the services that premium economy class offers that will make it competitive in the international markets taking into consideration that other airlines have implemented the same strategy. Finally, the paper seeks to determine the economy of this service by considering the cost against the benefits and thus establishing if it is sustainable.
Key Attributes of Premium Economy and Comparison of the Merits and Demerits of Different Versions of Premium Economy
The premium economy class offers unique services that forms the intermediary between the economy class and the business class, therefore tapping into the potential market provided by the presence of many clients who desire the service (Belobaba, Odoni & Barnhart, C. 2015, 27). The class is a strategy for business branding since it provides services that will stick in the mind of the clients. Selected Emirate A380 and Boeng 777 with the economy premium package come with free WIFI and a power plug in points for every seat, the customers, can therefore, remain connected without the fear of running out of power. Further, the wifi enables the clients who are interested in researching and doing their assignment to remain on course as they fly. The premium economy allows travelers to make calls to people on the ground since it is fitted with network roaming enabling devices, therefore, the issue of network problems while on flight has been eliminated by this package (Kuo & Jou, R. 2017, 137). These are some of the unique features that distinguish the premium economy class from the economy class and it has thus translated to increased customer demand.
The premium economy comes with a unique food menu whereby, travelers are given an opportunity to choose food with different flavors from their countries of destination. This provides the clients with the feeling and a taste of their destination before they arrive, which adds a zeal to the flight because it creates an anticipation of what is expected after landing. This package has a unique feature whereby, customers are given warm cover towels made from synthetic material from recycling of different plastics and fiber (Laming & Mason, K. 2014, 17). The customers are thus, assured of a warm flight even in ice cold situation since the towel is exclusively designed to provide warmth for even the extreme conditions. While on flight, the travelers are able to view over two thousand five hundred channels on an individual television that is installed for every passenger seat. For the young flyer, premium economy class provides them with customized content that keeps them busy throughout the journey which includes toys and television channels with content which fits them (Kuo & Jou, R. 2017, 139). With all the mentioned privileges, the economy premium offers services that are almost similar to those that are offered by the business class but at a lower cost and hence it is expected that it will increase the number of passengers and returns.
Despite the many merits associated with the premium economy class, Emirate Airlines has two sets of fleets which offers mainly the economy class and the business class. Introduction of the premium economy class in the two classes will split the fleet and reduce its efficiency due to decentralization and diversification of operation. Additionally, the A380 fleet works over short distances across countries and airports that are closely located, hence, introduction of the new airline class will not be effective over the short distance (Laming & Mason, K. 2014, 19).
Impact of The Cabin Layout
Economy premium is designed to provide the luxury that is close to that of the business class but at a lower cost, therefore, giving client the opportunity to have a taste of the luxury of the airline (Oancea, O. 2016, 5). The revenue has increased due to the introduction of the package resulting from the increased number of passengers who book flights on this class. The airline relies on the volume of bookings to increase its profit since the cost of the seat is less hence it strives to increase the booking to enjoy the economies of scale which translates to higher profits. The seat factor of the class is 70% which is higher than the business class which is at 64%, the difference is an indication that the premium economy class is gaining popularity among clients (Laming & Mason, K. 2014, 21). Due to the need to provide personalized services the wage-bill incurred by the economy class is high, further, the recurring cost of this package is high resulting from the need to service the Wi-Fi, the television, and the power supply system. Thus, cost is not translated by the amount of fares charged by the air craft, therefore, to maintain and increase revenue it is vital to ensure that the number of passengers remain high at all seasons (Oancea, O. 2016, 5).
The greatest impact enjoyed from introduction of the premium economy class is that it serves a great purpose in marketing the company due the standards of services it provides at a lower cost. This is an added advantage to the airline since the global market is very competitive and innovation ids the driving factor which help to provide a competitive advantage (Laming & Mason, K. 2014, 18). The package will serve the purpose of branding the aircraft, this is because it is the first company in the gulf to introduce such services in the region. The other class of services which the companies offers has become the beneficiary of the promotion and the corporate branding that the company has realized from the introduction of the service. Illustratively, other classes such as the economy class will experience increased customer booking which is a result of the good name the Emirates Airline has, a name that is a result of the services it has offered in the premium economy class. Corporate branding which is the process of promoting the products of the company as one unit compared to the single product promotion where a single commodity is promoted (Kuo & Jou, R. 2017, 141). The introduction of the premium economy class is a perfect way of corporate branding since it creates a good impression of the company in the eyes of the clients. People on leisure tours and those seeking to have the experience of a comfy and less costly flight find solace in the premium economy class. Additionally, the Wi-Fi and the roaming network feature of the product is an advantage to the clients who value being in touch with people in the ground while they fly (Kuo & Jou, R. 2017, 137). The airlines offering the premium economy class are designed in a sophisticated manner and personalized attention is given to the components that distinguishes them from the rest. This ensures that their performance is satisfactory since the objective of the design is the aesthetic values of the specific components that make up the whole unit. The performance of the unit is not easily compromised due to the time-to-time attention and monitoring to ensure that it maintains it status and remains workable and presentable in order to maintain its aesthetic value.
Sample Routes to be Served by Premium Economy Class
The premium economy class is effective over long distances, this will enable the clients to fully realize the benefits accrued from the use of this class of cabin (Kuo & Jou, R. 2017, 17). Therefore, it is not effective for the premium economy class to fly over the short routes that are served by the A380 airplane, it will be effective to define routes that will that are currently being served by the Boeng 777 which serves long routes (Kuo & Jou, R. 2017, 135). The routes that will be effective are those served by flights that collaborates alongside Qantas Airline and the routes that operate between the middle East and Australia. Others routes that are effective include the routes from middle East to France, America to Europe, and Europe to Africa. The routes are long and the revenues that will be generated is sufficient in comparison to shorter routes. Among the routes that are preferable for the premium economy class include Washington DC to London, Johannesburg to Beijing, and Dubai to London.
Type of seat and services for the new PE
The most evident evidence of the premium economy class is the cabin arrangement and the space that is available in the cabin and the unique arrangement of the seats (Hugon-Duprat &O’Connell, J. 2015, 12). the layout in the current set of airlines has to be redesigned and modified to suit the requirements of the premium economic class. From the layout of the economic class, the width of the seats has to be proportion and increased to fit those of the premium economy. Further, its knee height need to be adjusted by increasing the distance between seats to create more space for a comfortable sitting and mostly for passenger who are tall.
The seat type for the premium economy class will be leather coated seats with the width of the seat having a minimum dimension not less than 19”. the arm rest is to be put on each side. Further, the arrangement should comprise of two seats per row unlike the current arrangement where on row has three seats and the other has two. The head rest should be adjustable and the seat should be able to incline according to the customer need. The premium economy class should offer Wi-Fi services, personal television, charging points accessible to each client. Additionally, there should be a roaming network to enable phone calls while travelers are on-board. Finally, the food menu should be diverse and reflective of the flight destination, drinks should also be provided to the travelers.
Suitable Layout setting for the new premium economy class
The setting arrangement in the premium economy class will comprise of two seats adjacent to each other. The aircraft will have four rows, two on each side of the cabin, with each side having two set of seats and a path between the two sides. The seats will be placed to ensure that there is enough space hence providing conducive situation for travelers with tall knees. the television set will be located at the back of the seat that is in front so that the travelers can personally operate, this is where the power plug socket will be installed.
Estimation of flight charges
To calculate the flight fares, it is required that basic components are considered, each of which constitute the final price of the individual seat. The components include base fair, taxes and airport fee, fuel surcharge, service fee to issue, food, and baggage.
Price estimation of the route for one way trip from Washington DC to London
Total fare = base fair + taxes and airport fee + fuel surcharge +service fee to issue + food + baggage
Total fares= 1400+ 100+870+40+70+120
Total fare= $ 2500
Price estimation for one way trip from Dubai to London
Total fare = base fair + taxes and airport fee + fuel surcharge +service fee to issue + food + baggage
Total fares= 1000+ 100+640+40+70+105
Total fare= $ 1955
Price estimation for one way trip from Johannesburg to Beijing
Total fare = base fair + taxes and airport fee + fuel surcharge +service fee to issue + food + baggage
Total fares= 700+ 100+440+40+50+92
Total fare= $ 1422
Conclusion
In conclusion, the need to introduce premium economy class by the Emirates Airlines is a concept that is long overdue, this is because some of the companies that the enterprise is collaborating with have implemented this strategy. The concept is very important in the process of corporate branding and hence, other products and services offered by the company will benefit from the introduction of the service since it will lead to the automatic promotion of the products. The premium economy has numerous advantages to the customer with the main one being the comfort it provides at a relatively cheap price. The revenues gained from introducing the concept is likely to be high since they volume of travelers will increase. However, the system has a disadvantage the it is not effective over short flight distances because the client will not enjoy the full benefits of the service. Additionally, its introduction may lead to the splitting of the flights which increases the management coast and the and reduces the presence of the airline in routes that have already been developed. The premium economy class is effective for long flight and in routs that the airline operates in collaboration with other airlines.
This research has given me an insight into the different classes of aircraft services and particularly the premium business class. The information that I have gained include the importance of determining the impact of developing a given strategy in regards to the economics and prevailing business conditions. I have also learned about the factors that dictate the flight fares and how they are used to calculate the final flight fare.
References
Belobaba, P., Odoni, A. and Barnhart, C., 2015. The global airline industry. John Wiley & Sons.
Hugon-Duprat, C. and O’Connell, J.F., 2015. The rationale for implementing a premium economy class in the long haul markets–Evidence from the transatlantic market. Journal of Air Transport Management, 47, pp.11-19.
Kuo, C.W. and Jou, R.C., 2017. Willingness to pay for airlines’ premium economy class: The perspective of passengers. Journal of Air Transport Management, 59, pp.134-142.
Laming, C. and Mason, K., 2014. Customer experience—An analysis of the concept and its performance in airline brands. Research in Transportation Business & Management, 10, pp.15-25.
Oancea, O., 2016. Challenges of pricing luxury in commercial aviation–will first class disappear?. Journal of Revenue and Pricing Management, pp.1-5.