American Airlines Considering Premium Economy Cabins

UPDATE (9 Dec 15): No longer a rumor:  American Airlines Introduces Premium Economy Cabin For Long Haul Fleet

Australian Business Traveler (ABT) has reported that American Airlines is considering introducing Premium Economy cabins into its fleet.

According to ABT, American Airlines CEO Doug Parker confirmed that Premium Economy cabins were on the agenda:

“We’re looking at it,” American Airlines CEO Doug Parker told Australian Business Traveller earlier this month, after a pause to carefully choose his words. “We think there’s a lot of opportunity there.”

Premium Economy cabins have been around for a while so they’re not exactly a new product in the aviation world but US airlines are only just starting to show an interest. American Airlines would be the second of the 3 legacy US airlines to consider a dedicated cabin between Economy Class and Business Class in recent months.

Delta has recently rolled out Delta Comfort+ which, while not yet a completely separate cabin, is about as close as you can get to a Premium Economy cabin. From 16 May 2016 Delta Comfort+ becomes a separate booking option (rather than just a premium seat option), passengers will have complimentary beverages and “premium snacks”, dedicated overhead space and extra leg room. The Comfort+ section will even be separated from regular Economy Class by a curtain so the difference to plain old Economy Class is there to see.

Conversely, as things stand, American Airlines only has a product they call “Main Cabin Extra” (MCE) which is just a few rows of seats towards the front of the Economy Class cabin with a little extra leg room. There’s no extra seat width (on most aircraft), no special catering options and nothing to divide MCE from the Economy Class cabin. It’s just a slightly better experience than Economy Class.

How Likely Is This?

A couple of weeks ago (roughly) American Airlines and Qantas held a joint news conference to trumpet their improved joint venture and American’s new route to Auckland and, in that press conference, Doug Parker promised “an improved Economy Class service”. At the time I had absolutely no idea what he meant by that but, in hindsight, perhaps he was hinting at a true Premium Economy Class cabin?

American Airlines’ Economy Class product is pretty dismal but, although there’s clearly a lot of scope for improvement, I couldn’t imagine American implementing any of the changes I could think of that would actually improve the offering (less crowded cabins, better food, etc…). All of these would directly impact the bottom line, and airlines are all about the bottom line.

However, airlines are also about squeezing every last cent out of passengers – so the idea of passengers paying for the improved Economy Class service that Doug Parker promised would definitely appeal.

I can see them doing this…especially on routes like Los Angeles to Sydney/Auckland where their JV partner, Qantas, already offers a Premium Economy cabin. Or even their USA – UK routes where one of their other JV partners, British Airways, also offers Premium Economy.

Another Devaluation

If American Airlines was to go ahead and introduce a Premium Economy cabin on some or all of their long-haul routes it would be a hammer blow to their top-tier Elites.

The major benefit of AAdvantage Executive Platinum status (EXP) has always been the Systemwide Upgrades (SWUs) that are handed out each year. Historically those holding EXP status got 8 SWUs each year (reduced to 4 from 2017) and these can be used to upgrade to the next cabin of service when space is made available.

Per American Airlines (click to enlarge):

EXPs like me would regularly book economy class fares on long-haul flights and then use our SWUs to sit in the pointy end of the plane. For a lot of us this is why we strive to retain EXP status year after year.

If American Airlines introduces a Premium Economy cabin it would almost certainly be the end of the Economy to Business Class upgrades. The next class of service above Economy would be Premium Economy so, if a passenger wanted to use a SWU to upgrade into Business Class they would have to book into Premium Economy….and that would, presumably, cost a lot more than the Economy Class fares that can be used now.

It was bad enough when we found out that the number of SWUs we would earn would be halved, but if American also went ahead and made it so that we couldn’t even use them for Economy Class to Business Class upgrades, a lot of people would probably question the point of earning top-tier status on American. I know I would.

Thoughts

Award Chart devaluations, Partner award chart devaluations, slashed mileage earnings, and a reduction in the number of SWUs handed out have all been bitter pills to swallow in the past few weeks but, for me, losing the ability to upgrade into Business Class from an Economy fare would probably be the final straw.

If American implements this change, for those of us who primarily fly long-haul, “loyalty” to American Airlines would become pretty much pointless – the benefits would simply not be there any more. Perhaps that’s not such a bad thing, it’s probably time I gave a few other airlines a try anyway.