Air France and the incredible business on business class

Seats that cost up to $ 500,000 each on first class (first) and 50,000 on business class (business), dishes composed of the greatest star chefs, prestigious vintages, movies on the menu, do you want some? …: Unlike short flights where the service is pulled down under the pressure of low cost, long haul flights (from 6 hours) are constantly moving upmarket. Especially in business class, tendons of air warfare. It is the most profitable cabin on an aircraft, far more so than the first, (more composed of showbusiness personalities than businessmen, with the exception of a few executives or members of the executive committees of very large companies) whose unit costs are higher.

Hundreds of millions of euros

While business class (“J” in the jargon as the letter appears on boarding passes) receives only about 10% of the airlines’ long-haul passengers, it generates, with prices potentially rising to almost 10,000 euros, almost a third of revenue. To fill it, airlines are investing hundreds of millions of euros to improve airport services, cuisine, entertainment, seats … Air France, which unveiled its new Business seat manufactured by Zodiac on Tuesday, has invested 200 million in improving its long-haul flight business class, that is, almost half of Air France-KLM’s exclusive budget.

For companies, these investments never stop. Often, the entire fleet is hardly equipped with new seats, as it is already necessary to think about the next step. The lifespan of a good business class seat is 7 years. “The renewal of the product is mandatory, otherwise it will become obsolete and be overtaken by competitors,” explains a manager of a company in the Middle East. For those who can not keep up, the sentence is final: they risk leaving the Premium market!

For if companies (especially European and American) in the 90s could calculate their price on powerful tools like network, hubs, fixed contracts, loyalty programs, that is no longer enough today. It is also necessary to have an excellent quality of services.

“There are more than 3 billion air passengers in the world. They do not belong to any company. They are the ones who choose the companies they want to fly with. If your product is expensive and of poor quality, customers will look elsewhere,” said Temel Kotil, CEO of Turkish Airlines.

British Airways’ headquarters revolution in 2000

As a result, “there is a big battle over the quality of service”, explains Alex France de Juniac, CEO of Air France-KLM. “The market has changed, the level of passenger demand has changed”. Over the last twenty years, innovations have multiplied and gone even further. “It’s like an escalation,” explains one business executive. Which is not accompanied by a price increase. The market can not be very competitive.

The starting point for the upscaling of business class began in 1995, when the American company Continental Airlines abolished its first class in favor of a “Business / First”, of better quality than traditional business classes. This innovation led the other competitors to improve their Business product and to question the maintenance of the premiere, which most of the Majors will retain both for prestige reasons and by maintaining this market in certain geographical areas, especially in emerging countries. But it was British Airways that really revolutionized Business in 2000, with its seat being transformed into a completely flat and completely horizontal bed! A concept that until now only existed in the first classes, especially at Air France, which was the first to launch it in 1995. In Business at that time, the seats tilted around 130-140 degrees (150 ° -160 ° for Business / First).

Race for innovation

Contrary to what competitors thought, British Airways did not cannibalize its first class (which is also upmarket), but succeeded in introducing new standards of business class comfort. This “full flat bed” has since become the norm among the big ones in the sector who want to play in the high-end market. Above all, it has evolved. Longer (1.96 m at Air France compared to 1.83 cm at BA in 2000), wider (87 cm at Singapore Airlines A380), accompanied by increasingly sophisticated video systems ranging from entertainment to content connection with passengers, the list of “+” is continuing to grow.

“It’s the one that comes out with the latest innovation. There are lots of other things that will be invented in the next few years that we do not even think about today,” explains a company director.

Pressure from Gulf companies

This race for innovation reflects the intense competition in this market. The circle of companies that have to play in the big leagues in the high-end field has actually stopped expanding. In the 90’s it was limited to a few companies (Air France, Swissair, British Airways, Cathay Pacific, Singapore Airlines, United Airlines, Qantas, JAL, ANA, even Emirates, but the Dubai company was still a dwarf …) . In the 2000s, this list grew. In Europe, Lufthansa has worked hard and has reached the level of the best. But the great upheaval came from the progress of the Golf companies. Emirates, Qatar Airways and Etihad (Abu Dhabi) have not only become giants in the industry, but also benchmarks in terms of quality, forcing, like Singapore Airlines, all competitors to move up in the market.

“These companies have an exceptional service where prices have been pulled down. They have put air transport ahead of a challenge with competitiveness and service quality,” explains Alexandre de Juniac.

More attractive prices

Such a level of quality allows them to compensate for the disadvantages of a connecting flight with businessmen who usually prefer direct flights to optimize their journey, while showing more attractive prices than non-stop flights. Other airlines are participating in this advanced battle, such as India’s Jet Airways, which is still a small long-haul player, and above all Turkish Airlines. At the same time, Chinese companies are catching up with “big V” speed. And even the American companies, which had not had the funds to invest in the product during their long restructuring in the 2000s, are reinvesting heavily in new cabins.

Europeans doomed to excellence

Suddenly, faced with such formidable competitors with a lower cost structure, European companies, led by Air France, are doomed to compete or even surpass them in terms of quality to justify high prices. This is the whole purpose of the exclusive plan of the French company.

“We want to be number one in terms of service quality. With the costs we have in Europe, we have to offer a price in harmony with the quality of service. It is a rational choice in relation to our costs and the notoriety of the brand that conveys values ​​of luxury and excellence “, explains Alexandre de Juniac.

The brands or image of the countries from which the companies originate are, of course, very powerful marketing tools. Faced with global demand, companies need to unite their roots while adapting to specific markets locally.

Lots of business people in Eco class

If the expectations of the passengers have changed, the expectations of the companies have also changed. They are the ones who finance the tickets for their partners. With the crisis, travel policy has been further tightened, especially in Europe and in France.

“For CAC 40 companies, the proportion of business travelers traveling on business travel is 60%. It rises to 40% by taking all companies,” states a travel distribution specialist.

Of course, there are big differences between airlines and companies. Some prohibit business class for all travel, others allow it only for very long flights, or if the stay on site is short, or even by mixing it between the outbound and return journey, either with economy or with the middle class between economy class and business, created by a large number of airlines during the crisis to stem the shift from business class to economy class.

The business is a sign of recognition of the business partner

However, some companies are on the way back.

“Following a tight policy, some companies are loosening the screw and believing that having employees on a business trip is a sign of recognition and a kind of bonus,” explains Soline de Montrémy, director of corporate sales at Air France.

Additionally, as one industry veteran put it, “despite the tools that limit the choice of companies to use in companies, it’s a national sport for employees to bend the rule”. And there, in addition to safety and schedules, the product, but also all the services that carriers offer, including loyalty programs, play a big role in travelers’ appreciation and choices.

>> Read here : Zodiac’s big return on Air France business class

>> Pictures of the new Air France business seats can be seen here