In recent years, in the face of the challenges of low-cost airlines, many airlines worldwide have launched the “subdivision economy class” marketing strategy. Delta Air Lines subdivides economy class into introductory, economy, and premium economy classes. Others have different names, such as Air France’s Premium Economy Class and Cathay Pacific’s Premium Economy Class. Still, the motive is the same: to broaden the profit model, open up “gold-absorbing” channels, and attract passengers who want to pay more for relatively comfortable services—to maximize revenue.
The availability of these carbon-neutral fuels and other forward-thinking technologies reveals a central truth: Environmental action and economic development are not mutually exclusive; we can make sustainability a top priority without sacrificing today’s need for business flights, connecting citizens, businesses, and communities to an economic opportunity like never before.
Consider the data behind this economic equation: In Europe, business aviation flights support 374,000 jobs and $87 billion for the economy: these are often jobs needed in tomorrow’s workplace, including careers in Engineering, Technology, science, and Mathematics STEM majors.
Traditionally, elite first- and business-class passengers with full-ticket tickets have been airlines’ most prominent “financiers.” Industry statistics show 70% of general airline revenue comes from 25% of high-end customers. However, with fragile global economic growth and tight corporate travel budgets, customers willing to buy first- and business-class tickets are declining. As a result, the super economy class in the economy class came into being. The US budget airline JetBlue’s financial statements show that the first year of the launch of the premium economy class brought in an additional $40 million in sales revenue for the company.
“Subdivided economy class” is a reasonable upgrade and optimization based on the super economy class. In a sense, it is an expansion and innovation of the airline’s existing profit model. According to media reports and Delta Air Lines, American Airlines and others have also indicated that they will introduce a tiered ticket law. In the eyes of these airlines, you must segment an economy to “catch every passenger from the stingy to the generous.” American Airlines forecasts that segmenting the economy class could bring an additional $1 billion in revenue annually.
“Selling point.” you can check more spacious seats, more high-end meals, more comfortable facilities, more thoughtful service, and more luggage for free, and the price is not much higher than that of regular economy class. These are all tempting “subdivided economy classes.” There are usually only four passengers in the super economy class of British Airways. There are about eight passengers in a row in the economy class of ordinary wide-body aircraft. Several other European airlines have also emphasized their premium economy class as better value for money and have high hopes for the profitability of the cabin.
Given that it is expected to become a new lever for the development of the aviation market, more and more airlines are making further adjustments to existing aircraft, including creating new spaces to assemble upgraded economy class, etc. According to a Colorado-based HIS Consulting Group report, “segmented economy class” will be the fastest business growth point in the global aviation industry in the next ten years. To impact and cannibalize its adjacent class seats (business class), open-source, increase efficiency, and expand revenue.
Management guru Drucker famously said: “The customer is the difference.” The difference in the customer leads to the difference in the service. The revelation of “subdivided economy class” is that if any company wants to be invincible in the increasingly fierce market competition, it must break the inherent operating mode and inertial thinking and seek new market positioning with a keen eye. Segment the market, refine and strengthen service awareness. Highlighting differentiated, individualized, and humanized services are necessary to improve civil aviation services. In this way, airlines can outperform their peers in an environment of increasing market pressure.
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