Iberia are introducing Premium Economy from Summer 2017 with initial flights between Madrid and Buenos Aires, Lima and Chicago. Seats will be similar to British Airways World Traveller Plus which is no surprise as both airlines are owned by International Airlines Group or IAG.

Premium Economy

Premium Economy is becoming increasingly popular in the industry. It is marketed either as a lighter Business Class product or an enhanced Economy Class service with fewer additional perks. Major international carriers are continuing to introduce this class with American Airlines next to come on board from later this year.

Baby boomers are beginning to retire and the expectation is that those travelling during their retirement will choose a little extra comfort and trade up from Economy Class. To date there is little evidence anyone is trading down from Business Class.

The Aer Lingus Question

Aer Lingus is owned by IAG and the Irish airline is now the only full service carrier in the group without the product. The Transatlantic network on Aer Lingus sees sector lengths of up to eleven hours and additional comfort would be appreciated by passengers.

Looking at flights between Dublin and San Francisco return in January on Aer Lingus illustrates the pricing differential between Economy Class and Business Class. Return flights price at €600 in Restricted Economy, €1,500 in Flexible Economy, €3,515 in Restricted Business while flexible Business Class is a steep €6,250!

Personally, paying €1,500 for an Economy Class seat isn’t something I would do. I would pay around that for Premium Economy without much thought. It would be interesting to see the detail in the revenue at Aer Lingus to see how many people are paying a high price for Economy Class and if Premium Economy would be a better earner.

Overall Thoughts

Aer Lingus is expected to join the oneworld alliance and transatlantic joint venture with other alliance carriers. As they are now part of IAG, the chances of them introducing a Premium Economy product in the future is quite good. Thank you for reading and if you have any comments or questions, please leave them below.

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