American Airlines declared on an investor call last week that it would be removing its first-class seating on its international flights. According to Business Insider, chief commercial officer Vasu Raja was responding to a question on if the class would exist in the future during the call.
“First class will not exist on the 777, or for that matter at American Airlines, for the simple reason that our customers aren't buying it,” said Raja on the earnings call.
The airline has struggled to sell seats for first class, so instead will be focusing on its new “Flagship Suite” for business class, which was announced in September. The Flagship Suites will contain privacy doors, a chaise lounge seating option, and additional personal storage, which will be installed on the new deliveries of its Airbus A321XLrs and Boeing 787-9s. The current Boeing 777-300ERs will be updated with new interiors to reflect the class.
The airline will also be increasing its Premium Economy seating for long-haul flights as a response to higher demands. The Flagship Suite and additional Premium Economy seats will be debuting in 2024 and will grow American Airlines’ premium seating for its long-haul flights by more than 45% by 2026.
First Class will stay in place on domestic aircraft and only be removed on international flights, but the airline will continue to offer fully reclining seats on its transcontinental routes from New York and Boston.
Why is American Airlines Removing First Class?
The increase in premium seating is said to be a repercussion of the changing work lifestyles of airline customers. According to Raja, prior to the pandemic, premium cabins were mostly occupied by large corporations, whereas now, 40-50% are representative of customers who are combining work with leisure elements.
Leisure travelers have proven they are willing to pay more for the quality of a better seat, and by removing first-class seating, it provides the opportunity to increase the class of seating that customers want to pay for.
Is “Bleisure Travel” the New Form of Travel?
“Bleisure” travel is on the rise and is a new travel form that has been used to describe the combination of business and leisure travel. Professionals are looking to extend their trips, so they can work from the city on weekdays and enjoy the weekends with their loved ones while having the flexibility to see the city.
Markus Keller, Accor's chief sales and distribution officer, told BizBash the pandemic has shifted many mindsets around the traditional workplace routine, so people have been looking for opportunities to combine their work experience with more authentic experiences close to nature and where people work.
“Domestic leisure travel has increased notably as changing work cultures, and new modes of productive working have allowed people greater flexibility and the opportunity to work in different settings. This trend now sees people frequently commuting a few hours from home to discover new cities and locations where they can experience living as a local [with new] cultures, environments, and foods as part of their work week,” said Keller.
Like American Airlines, Accor is doubling down on this segment. They are expanding with their multi-branded “All Inclusive Collection” which offers entertainment programs, outdoor and sporting activities, wellness, and a wide variety of restaurants, bars, beach clubs, and nightlife concepts.
The Golden Age of Travel
Hilton CEO Chris Nassetta has termed the new era of travel as the “Golden Age” and has highlighted the combination of business and leisure travel as a driving factor for Hilton's rebound. Nasetta told Yahoo Finance Live that he has seen more leisure and bleisure, with more extended stays, which has contributed to a steady recovery.
“We've seen a very strong recovery in all segments of the business — led by the leisure business — but very strong recovery in business travel, very strong recovery in meetings and events,” he told Yahoo Finance Live at the All Markets Summit last week. “And it continued throughout the summer, and it is continuing into the fall. I'd say we're in the midst of a very strong rebound, coming out of [a] depression for the hospitality business in '20 and '21.”
As companies cement their remote work policies, more travel companies are targeting these “bleisure” travelers. Hilton is refreshing their aesthetic and considering adding new brands to appeal to longer-stay guests who are looking for more lifestyle features.
Nasetta said that the company is thinking about how travel shifted during COVID and that Hilton is considering opportunities that would serve a wider customer base. He hinted that they might share how they’re addressing this in the next 6 or 12 months.
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This article originally appeared on TravelOffPath.com
Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, hotel, airline, or other entity. This content has not been reviewed, approved or otherwise endorsed by any of the entities included within the post.