Premium economy attracts corporate flyers, Sabre study reveals

Cathay Pacific is one of the Asian airlines that offers a premium economy product (photo by Sorbis)
Cathay Pacific is one of the Asian airlines that offers a premium economy product (photo by Sorbis)

Corporate travellers in the Asia Pacific region are being drawn to airlines that offer a premium economy class, a new report has revealed.

In its ‘Corporate Travel Practices Survey 2015’, Sabre found that despite a “relatively limited provision” of premium economy seats in the region, bookings for these products have jumped more than 10% among one-fifth of the corporate travel agents surveyed, and look set to climb further and faster in the future.

The report stated that tightening travel budgets are driving demand for premium economy. Many travellers are now only permitted to travel economy class, but corporate travel policies often include premium economy within this bracket. As a result, many business travellers are now requesting a switch to airlines that offer premium economy.

Almost a quarter (24%) of respondents reported this type of request, as part of the “tendency to demand more than what is permitted by policy”.

A similar number (23%) of respondents said they have been asked to change clients’ regular economy bookings to premium economy seats. Agents based in Hong Kong and New Zealand reported this trend the most, followed by those in Taiwan and the Philippines.

Lufthansa's premium economy cabin
Lufthansa’s premium economy cabin

Singapore, according to the report, is catching up now that its national carrier has introduced a premium economy service.

Premium economy is also attracting movement from other classes, according to the report. While half (51%) of respondents said they had observed or managed downgrades from business class to economy to reduce cost, 41% had also seen moves half-way down the plane, taking premium economy seats instead. Australia and New Zealand were the highest reporters of this trend.

The report went on to detail several other key trends emerging within the Asia Pacific region’s corporate travel management sector. These include tighter control of ancillary expenses, improved pre-trip planning to reduce the risk of ‘off-policy’ booking, the “mainstream” use of mobile itinerary management apps, the rise of data analytics to develop more personalised services, a greater reliance on agents, and greater technological integration.

“The evidence is that Asia Pacific agents are managing more travel for this region’s demanding corporate clients, while achieving tighter cost control and with technology playing the enabling role,” said Roshan Mendis, senior vice president of Sabre Travel Network Asia Pacific. “It seems to be happening without compromising the comfort of travellers. In fact this year they are having more of their personal preferences met.”

Sabre’s Corporate Travel Practices Survey 2015 was conducted from April to May 2015, and gathered responses from corporate travel managers based in Australia, Bangladesh, China, Hong Kong, India, Indonesia, Korea, Malaysia, Nepal, New Zealand, Pakistan, Philippines, Singapore, Taiwan and Thailand.

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