Corporate flyers and higher-income group travelers are more than willing to shell out money mainly for comfortable travel, a trend that even low-cost carrier JetBlue is trying to capitalize on.
- In December, JetBlue opened the doors to BlueHouse, the airline’s first airport lounge, at John F. Kennedy International Airport (JFK) in time for peak holiday travel.
- Emirates has been doing a makeover of its Boeing 777 to enhance its flights with refreshed interiors, a new Business Class seat configuration, and a new Premium Economy cabin.
- In October, Delta Air Lines said that its customer base is financially strong, with a rising preference for premium products and services.
In a post-pandemic world, consumers continue to prioritize travel, even as they rein in spending elsewhere. Many are still willing to splurge on vacations and comfort, whether flying or cruising.
To capitalize on this demand, airlines have expanded premium seating and upgraded in-flight offerings, targeting higher-spending and corporate travelers. Major carriers have revamped their business-class cabins and interiors as part of this push. JetBlue Airways, however, stands out as the first low-cost airline to make a serious bid for a slice of the premium travel market.
JetBlue’s Premium Bet
Mint is JetBlue’s premium offering, featuring lie-flat seats. The carrier has been aiming to introduce a new premium cabin on all planes that don’t currently have Mint Plus sometime next year.
The Mint, in its all-new format, offers the largest TV on a U.S. airline, plus an extra seat and space to work, lounge, and entertain. This is already made available on all transatlantic and select coast-to-coast flights.
In December, JetBlue opened the doors to BlueHouse, the airline’s first airport lounge, at John F. Kennedy International Airport (JFK) in time for peak holiday travel. The lounge provides a game room, open seating and spans 9,000 square feet across two floors.
JetBlue in October said that the premium segment is expected to see strong demand in the fourth quarter as well. The company said that premium continued to outperform core, and year-over-year, premium growth was up 6 points relative to core.
Major US Airlines And Their Premium Offering
Emirates has been undergoing a makeover of its Boeing 777 fleet to enhance its flights, featuring refreshed interiors, a new Business Class seat configuration, and a new Premium Economy cabin. Emirates has called it the first fully retrofitted Boeing 777 aircraft.
It's not just Emirates; even Delta Air Lines, American Airlines and United Airlines have heavily invested in efforts to make sure they can take a share of big-spending flyers.
Delta offers “Delta One” suite, which is a lie-flat seating with a sliding door, premium bedding and a seasonal chef-curated four-course meal. “Delta Premium Select” provides wider seats with deeper recline and enhanced amenities for a more spacious and relaxing journey.
The company has also ensured that all passengers have a wide selection of in-flight entertainment options, with complimentary access to 1,000-plus hours of content on Delta Studio.
American Airlines, as part of its investment, has offered customers who choose Premium Economy on its transcontinental route to receive Priority check-in, security and boarding. These travellers are given a personal amenity kit with premium skincare products and travel essentials. During the flight, customers can relax in wider seats with more legroom and comfortably rest with a lumbar pillow and crepe weave blanket.
The Big Spending Flyers
A larger share of lower- and middle-income consumers has cut back on purchasing big-ticket items, but are more than willing to spend on travel. Higher-income groups, on the other hand, are now splurging on seat upgrades for comfortable travel, a trend the airlines want to tap into.
Corporate flyers are increasingly looking to purchase tickets that offer bundled benefits, from selecting a good seat to a three-course meal. And for long-haul flights, lie-flat seats have become the go-to option for big spenders, with carriers not leaving any stone unturned to ensure the interiors are in place, consumers are given in-flight entertainment, and also at-home comfort with blankets and pillows.
In October, Delta Air Lines said that the U.S. economy remains on a solid footing, and its customer base is financially strong, with a rising preference for premium products and services. Delta’s premium revenue growth exceeded that of main cabin by 13 points during the latest quarter.
Partnership Beyond Air
Delta and American Express have long offered a partnership that catered to corporate customers and travelers. The airline also has exclusive partnerships with Uber and, most recently, with YouTube, extending SkyMiles further into members' daily activities.
This year, American Airlines, Citi, and Mastercard launched a new mid-tier travel rewards credit card for travelers who fall between the occasional vacationer and the frequent flyer. It includes preferred boarding, a first checked bag free, and also earning up to $100 in statement credits on in-flight purchases when using this card on qualifying American Airlines flights.
What Is Retail Thinking?
Retail sentiment on JetBlue dipped to ‘bearish’ from ‘neutral’ three months ago, with message volumes at ‘low’ levels, according to data from Stocktwits.
Sentiment on Delta dipped to ‘extremely bearish’ from ‘neutral’ territory three months ago, while on American Airlines it dipped to ‘bearish’ from ‘extremely bullish’ in the same period.
Shares of JetBlue have declined 40% so far this year, while Delta’s stock has gained over 17% and American Airlines has fallen 11% year-to-date.
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