The increasing popularity of the premium economy cabin is no secret to anyone. The latest proof of the success of this product is the decision made by Austria's flag carrier, Austrian Airlines, to increase the premium economy capacity of its long-haul fleet of Boeing B777s. Let's look into Austrian's investment in the premium economy product more thoroughly.

Austrian B777s to add premium economy capacity

Austrian Airlines, Austria's flag carrier and part of the Lufthansa Group, is increasing its investment in the premium economy cabin on its fleet of Boeing B777s.

Following this cabin's success among leisure and business passengers, the carrier has announced that it will almost double premium economy capacity on each of its six Boeing B777-200ERs, with premium economy seats increasing from the current 24 to 40. The intermediate class between the economy and business comes with a range of benefits for Austrian Airlines' passengers, including two pieces of checked luggage, up to 23 kgs, free of charge, and a multi-course menu created by one of the most renowned caterers in the industry, Do&Co.

With the premium economy seats almost doubled and the further addition of economy class seats, the six Austrian Airlines' Boeing B777-200ERs will add a total of 144 seats to the carrier's long-haul offer. Photo: Getty Images 

On the occasion, Austrian Airlines' Chief Commercial Officer, Michael Trestl, stated:

"By modifying our long-haul fleet, we are meeting the growing demand for more travel comfort. We look forward to welcome even more guests in our Premium Economy Class"

Capacity will improve in the economy cabin as well

Besides increasing capacity in the premium economy cabin, Austrian Airlines is changing the layout of the economy cabin on all of its Boeing B777s.

Starting early 2023, the fleet of triple sevens will see the addition of 14 economy class seats per aircraft. Considering the almost doubled premium economy cabin and the 14 additional economy seats, the cabin renewal will add a total of 144 seats to Austrian Airlines' long-haul capacity. The airline plans to have the new seating configuration on the Boeing B777s completely modified by May 2023.

Austrian Airlines Boeing 777 Getty
The additional premium economy and economy class seats will be completed by May 2023. Photo: Getty Images

Since the pandemic, when Austrian Airlines' Boeing B777-200 capacity, measured in seats, dramatically decreased by 85% compared to 2019, the capacity of the carrier's largest aircraft has been progressively increasing. In 2022, the capacity of Austrian's Boeing B777-200ERs improved by 82% compared to 2020 and 63% compared to 2021, as the graph below shows.

Capacity (seats, '000) B777-200ER (2)
The capacity of Austrian Airlines' Boeing B777-200ERs has been progressively increasing since the pandemic, with 2022 representing a +82% vis-à-vis 2020. Graph: Simple Flying I Data: OAG 

Premium economy: a winning product

Increasingly, more airlines worldwide have recognized how strategic a premium economy cabin in the long-haul fleet can be.

KLM Boeing 787-9 Dreamliner PH-BHC
KLM was one of the latest airlines in Europe to invest in a premium economy class product. Photo: Vincenzo Pace I Simple Flying

Back in 2015, a study by Hugon-Duprat and O'Connell demonstrated how relevant it is for airlines operating a long-haul network to invest in this kind of product. Notably, the study concluded that developing a premium economy class seat costs, on average, just 1.6 times more than realizing a standard economy seat. Additionally, this cabin offers the highest marginal revenue over the cost of production compared with other classes, such as economy or business class. In other words, the premium economy cabin is the most lucrative cabin for an airline, generating 6% more revenue per square meter than business class and 33% more than economy class.

What do you think of Austrian Airlines investing in the premium economy cabin? Let us know in the comments below!

Source: ResearchGate