The pandemic has placed the travel industry under immense pressure, with significant shifts taking place.
The margins on business class tickets are high, making this class of tickets especially appealing to airlines. However, in response to the greatly reduced demand for business travel, airlines have begun shifting their focus from corporate to leisure travel. Premium economy seats are being installed to replace some of the business class ones. The airlines are trying to entice holidaymakers who want to experience luxury travel. The seats are priced between those of business and economy class. SWISS and Emirates have both announced plans to introduce premium economy cabins. Says SWISS CEO Dieter Vranckx, “We are delighted that, in introducing our new Premium Economy Class, we are meeting our customers’ growing demand for more privacy, more comfort and more individuality”. Similarly, BA has introduced lounge access to passengers who book expensive holidays through the company’s travel arm. United Airlines will let passengers preorder food and snacks online before flights.
High speed railway companies are starting to entice travellers away from budget air travel. The inconvenience of long waiting times and the lack of in-flight amenities of budget air travel, are what the rail companies are hoping will push more people towards their offerings. This also appeals to the environmentally-conscious traveller, a rapidly growing demographic. Midnight Trains, a French start-up, offers comfortable, overnight train travel that is easy to access and takes only slightly longer than many European flights. These sleeper trains will offer private compartments which include a private bathroom, and full bar and restaurant access.
According to research by Swiss bank UBS, it’s predicted that global air travel growth could shrink by 10 percent by 2028 compared to expectations prior to the pandemic, due in large part to a global acceleration in the shift from planes to high-speed rail. Austrian national rail company ÖBB, chose not to suspend sleeper trains to European destinations last year. The so-called Nightjets accounted for 17 percent of turnover. This success is leading to similar plans by other European countries. Rail industry analyst David Briginshaw says, “You leave home late at night, arrive early in the morning, and you got the whole day ahead of you.”
It is unclear whether the shift away from business to leisure travel will be a trend that persists. There are predictions that air travel won’t recover to pre-crisis levels until 2023, so for the foreseeable future and until business travel returns to pre-pandemic levels, this will most likely be the strategy that many airlines employ. The shift from budget flights to overnight high-speed rail travel, however, appears to be a trend that is growing regardless of the pandemic, as more passengers opt to travel in a more eco-conscious manner.
Would you be willing to pay a premium to travel premium economy?
How likely are you to choose overnight high speed travel over budget flights?
Are there any business opportunities that you see from these shifts?
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Image credit: Johannes Hofmann
