Is first-class profitable for airlines? - Seedly
Seedly logo
Seedly logo
 

MileLion

Travel

KrisFlyer

Anonymous

Asked on 19 Dec 2019

Is first-class profitable for airlines?

Hi, i was just wondering if first-class is profitable for airlines? like do they earn a lot of money when people fly first-class? or are they actually making a loss? not really miles-related, but just wondering!

0 comments

7 answers

Answer Now

Answers (7)

Sort By

Most Upvote

  • Most Upvote
  • Most Recent

Hi anon,

Revenue first class can be very profitable. But business class is probably where most of the profit is made.

Few people outright pay for first class though. Most either redeem miles, or have companies paying for them. Or you have the occasional celebrity who thinks nothing of shelling out a $14000 Suites Class on SQ LHR - SIN return since they make a million a year.

However, if the flight takes off empty in first, that's a potential loss in revenue. So the airlines have really gotten good at pricing it just right to entice people to pay for it instead of redemption.

Nowadays, I would say that First Class is starting to become rare.

I will refer you to this video. It's called The Economics of Airline Class, and it's really good:

https://www.youtube.com/watch?v=BzB5xtGGsTc

0 comments

👍 8
Choon Yuan Chan
Choon Yuan Chan
Level 9. God of Wisdom
Answered on 19 Dec 2019

Sia used to have difficulties selling it's old first class suites. They tended to fly off at 50% capacity and SIA was barely breaking even in that segment, from what I understand. The continuing of the suites was for it to act as a marketing effort to promote SIA as a luxury airline

0 comments

👍 4
Ken K
Ken K
Level 6. Master
Answered on 10 Feb 2020

Revnue 1st class is profitable for airlines!

0 comments

👍 0
BA
Barry Allen
Level 6. Master
Answered on 10 Feb 2020

Sometimes airlines like Emirates and SQ just want to have an awesome first class product to show off how great flying with them can be. It is meant to be a flagship product that may or may not be profitable by itself.

However, the trickle down effect of people associating these airlines as more luxurious (even though Emirates has a ridiculous 2-3-2 config in business class) and are more willing to pay more to fly with these airlines. In the grand scheme of things, first class is still likely to be profitable. Airlines would scrap it otherwise (as MH and KE have done).

0 comments

👍 0
Cedric Jamie Soh
Cedric Jamie Soh, Director at Seniorcare.com.sg
Level 8. Wizard
Answered on 23 Dec 2019

Yes first class is very profitable per seat.

Unfortunately most airline body lose money if they allocate too much first class and couldn't get it filled. So thats a big problem because every empty seat is a big revenue wasted.

Airbus A380 is one of this plane that can have many first class seat empty as it flys... giving airline a big headache.

One of the reasons why A380 didn't sell well....​​​

0 comments

👍 0
Sanchit
Sanchit
Level 6. Master
Answered on 23 Dec 2019

Great question.

This is a good answer for me :)

https://www.youtube.com/watch?v=BzB5xtGGsTc

0 comments

👍 0
Jacob
Jacob
Level 6. Master
Answered on 22 Dec 2019

I believe airlines have a revenue-pricing model that accounts for the no-shows and half-booked first class seats that we see quite often. It should be a complicated model that varies across airlines and flight routes based on their respective demand of these flights and supply of these seats. So overall the flight should still be profitable, based on the make-up of first to business to economy class seats.

0 comments

👍 0