Why All Business Class Fails

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“It doesn’t matter how good you are or how lavish your service is,” one airline executive told me shortly after Silverjet’s collapse was announced. “If you don’t offer a worldwide network and a good frequent-flyer program too, you’ll have a hard time attracting the most frequent and most profitable customers.”

Which may explain last month’s move by L’Avion, the last remaining independent all-business airline. It entered into an alliance with OpenSkies, a boutique airline that British Airways launches on June 19. L’Avion flies between Newark, New Jersey, and Paris’ Orly Airport. OpenSkies will operate from New York’s John F. Kennedy International Airport to Orly, and it has hedged its premium-class bets. OpenSkies’ Boeing 757s have 82 seats in three cabins: business class with lie-flat beds; a traditional economy class; and a hybrid middle class with reclining chairs. Even B.A.’s denser configuration poses “real estate” risks, however. OpenSkies’ in-flight layout will accommodate nearly twice as many passengers as Eos, but that will still be less than half the number of seats you could pile into a Boeing 757.

The other surviving all-business ventures have network pedigrees too. Powerful Singapore Airlines flies Asia’s only all-business-class routes. (It recently converted its Newark and Los Angeles nonstops from 181-seat two-class operations.) Lufthansa and its Swiss International subsidiary fly the all-business-class routes to Germany and Switzerland.

Lufthansa, which revived the all-premium concept in 2002 after a decade of dormancy, is especially artful in its deployment. Last year, for example, Lufthansa used it on three routes: Newark-Düsseldorf, Germany; Newark-Munich; and Chicago-Düsseldorf. All were upgraded to larger three-class jets this year, which gives Lufthansa even more business-class seats to sell, as well as first-class and coach cabins too. The all-business planes have moved to existing U.S. routes where Lufthansa needs additional premium-class capacity and to a new service from Frankfurt to Pune, India.

“We do our homework,” Lufthansa executive Don Bunkenburg told me last week. “All-business-class flights are a great way to test service into growth cities. But we also have the network to support the experiments.”

The Fine Print…
A charter carrier called Primaris wants to operate scheduled, all-business service on domestic routes. It once expected to begin “professional class” service in 2004, but it’s now aiming for a 2010 launch.

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