From the decline in airline flights recorded throughout the last two years, flight recovery is slowly beginning to return to pre-pandemic numbers, even though corporate air travel is still not projected to make a full comeback until 2026. Among the fluctuating travel industry, American Airlines recently made a momentous announcement during an investors call to eliminate first-class seats from their long-haul international flights. This decision comes as the “bleisure” trend exponentially increases and continues to remain strong. Since combining business and leisure for their work trips, fewer travelers are willing to spend the premium fare on first class.
American plans to pull the first-class seating and instead offer more business-class options, like the Flagship Suites, which will be introduced in 2024. “First class will not exist on the [Boeing] 777 or, for that matter, at American Airlines for the simple reason that our customers aren’t buying it,” Vasu Raja, American Airlines chief commercial officer, said. Due to the quality improvements of business-class seating, first class is lacking demand and necessity.
By removing first class, “[American] can provide more business-class seats, which is what our customers most want [and] are most willing to pay for,” Raja said.
According to Raja, now between 40 percent and 50 percent [of travelers] is blended demand, and the rest is leisure demand willing to pay more for the quality of a business class seat.
For domestic and short-haul international flights, first-class seats will still be offered. The question remaining is: If American Airlines eliminates first class for all flights and provides more business-class options, will other airlines begin to follow suit?
MEET
