* Lufthansa follows rivals such as BA, United
* To be fitted first on 747-8, then other long-haul planes
* Aims to steal customers from rivals
By Victoria Bryan
BERLIN, March 5 Lufthansa, Germany's
largest airline, unveiled its new premium economy class on
Wednesday, part of a 3 billion euro investment in seats to catch
up with fast-growing rivals from the Middle East.
The airline said the new class would first be available on
long-haul flights from November on its Boeing 747-8, flying to
destinations such as Washington DC, Los Angeles or Hong Kong.
Lufthansa is following around 40 other airlines that already
have a premium economy class such as British Airways,
United or Qantas. The premium economy concept has been
around for more than a decade.
Lufthansa Passenger Airlines Chief Commercial Officer Jens
Bischof said the airline had had sleepless nights about whether
to introduce a premium economy class but was comfortable now the
group had upgraded its business class, meaning there was enough
of a difference between economy and business to justify the
introduction of a premium economy.
He said he believed the product was of a high enough quality
that the airline would be able to snatch customers from rivals.
A return flight in premium economy, which give customers
more luggage allowance, more space and bigger entertainment
screens among other benefits, will cost on average 600 euros
more than a regular economy ticket, but far less the average
2,000 euro mark-up for a business class seat, Bischof said.
"The biggest question is whether businesses will now book
the class for those travelling on business," airline consultant
Gerald Wissel from Airbourne told Reuters.
Bischof said around 70 percent of business travellers were
travelling in economy these days.
"We believe the upsale potential for economy to premium
economy is far bigger than the downsell from a full-class
business with a flat seat," he told a packed crowd at the ITB
travel fair in Berlin.
Bischof said the airline was investing 3 billion euros in
improving its product for customers, not counting the 36 billion
euros worth of new aircraft it has ordered.
He put the investment in the premium economy at 170 million
euros, compared with 1 billion for the business class
Davy analyst Stephen Furlong said it was important for
Lufthansa to invest in its product, even as it cut costs.
"They want to be the first European five-star airline. Like
a lot of German companies in other industries, they will never
be the lowest on costs, so you'd better have a better product
than anyone else," Furlong said, referring to Lufthansa's
attempts to get a five-star rating from Skytrax, which reviews
and ranks airlines. Airlines with five-star ratings include
Singapore and Cathay, among others.
Lufthansa said premium economy would make up around 10
percent of seat capacity on its long-haul flights, carrying
around 1.5 million passengers a year in the class. It will be
fitted on all 106 of its long-haul planes within a year.
Bischof added the group had no plans at present to introduce
it on short- or medium-haul, or on other airlines within the
Lufthansa group, such as Austrian Airlines.