The Evolution of Premium Economy (and What the Heck Is It Anyway?)

The term “premium economy” is a fairly nebulous one. It can mean anything from just a little extra legroom to an entirely different class of service. It can be confusing to a lot of people, so let’s talk about it. How did we even end up with a premium economy anyway? And why isn’t there a uniform definition?

In the modern era, I believe Virgin Atlantic was the first to use the “premium economy” term when it renamed its “Mid” class of service twenty years ago. (EVA in Taiwan may have been slightly before that.) But other than those isolated uses, premium economy was very slow to catch on. And when it did, it caught on differently in different places.

In the US, it was sort of an accident. Back in 1993, TWA decided to replace coach with Comfort Class, something that added legroom throughout the cabin for all coach passengers. This awesome flashback shows the ads TWA ran at the time. (I haven’t heard that jingle in years.)

While this was a “premium” economy compared to what other airlines offered, on TWA this was just plain old coach. This was the same thing that American did in 2000 when it launched More Room Throughout Coach by giving everyone more legroom. Neither of these were good ideas because they made a very poor assumption — that people in coach would choose American and TWA because of their onboard product. That wasn’t right. Some people will always just search for the cheapest fare and neither TWA nor American had a lower-cost product to sell to those people.

American’s introduction of More Room Throughout Coach, however, was actually a poor response to a better idea. United announced in August 1999 that it would create Economy Plus, a section at the front of the coach cabin with more legroom than the rest of coach. Looking back, that seems like a brilliant idea, but it wasn’t done very well.

United did have the product, but it lacked the right vehicle to make money. Elite travelers and full fare coach passengers got access to Economy Plus, but that was the only way in. Without a real revenue generation component through paid upgrades, it would have been hard to justify for anyone else to do the same thing. But eventually, United figured it out. In a world where unbundling became more and more acceptable, offering a paid upgrade to sit in these seats seemed natural. Sure enough, it worked. People have called this premium economy, but it’s really just coach with a little extra legroom.

Delta followed eventually with Economy Comfort and American, long after ditching More Room Throughout Coach, added Main Cabin Extra. This became the de facto premium economy section even though, other than at KLM, the rest of the carriers in the world had turned to something else.

Most carriers outside the US followed the EVA and Virgin Atlantic model of having a separate cabin. This would allow people to buy tickets directly in that class (instead of paying to upgrade) and it came with a lot of different perks including a better seat, better meals, and more. Effectively, it became sort of what Business Class was before it went WAY upmarket.

I wrote about the creation of premium economy as a way to solve a pricing problem on the blog for my wife’s company, Integrated Insight, this week. What is that pricing problem? If you look back at what Business Class was when it was introduced, it really wasn’t much more than coach. But while Business Class went upmarket, coach went the other way. The pricing gap became so great that airlines looked for a middle class that would allow coach travelers to buy up without breaking the bank. That’s how a separate Premium Economy cabin was born.

Lufthansa Premium Economy

Even previously conservative airlines in this regard have started to make the move. Lufthansa, an airline which only recently went to fully flat beds in Business, is the latest to have launched premium economy, seeing the need competitively (pic above via Lufthansa).

That explains how we got where we are, but it doesn’t explain why. Why is it that US airlines have evolved differently from the rest? I think there are two main reasons. First, US airlines have much larger domestic/shorter haul networks than other airlines, and a more spartan extra legroom product makes more sense there because First Class domestically hasn’t created that same kind of gap as it has internationally. Couldn’t they have gone with one product on the domestic fleet and another internationally? Sure. But that’s not cheap and it brings me to reason #2. It takes a lot of money to develop a new seat and new service standards. Then you have to implement it. US airlines haven’t had the money to invest in that kind of thing… until now.

With US-based airlines starting to make more normal profits, maybe we’ll see them start to consider a true premium economy cabin. On the other hand, there is some strategy here. When British Airways, Iberia, and American formed their joint venture, they liked being able to offer both products to let people choose. Today, that means that someone who is tall but cost-conscious can pay for coach and then spend another $100 to fly in the extra legroom seats on American. But someone who has a little more to spend (but not Business Class money) might opt for the improved experience in premium economy on BA. Personally, I prefer product consistency instead. Maybe we’ll see that happen eventually.

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29 Comments on "The Evolution of Premium Economy (and What the Heck Is It Anyway?)"

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nicholas.irving
Member

Delta has started offering a few extras in their premium economy section – free drinks, nicer snacks, etc.

southbay flyer
Guest

Delta also has a greater recline in Economy Comfort.

stan
Guest

which, ironically, is what i hate most about it. i can simultaneously have more room and less room at the same time

roryjmaxwell
Member

What is often missed in discussions about how premium economy is developing and might evolve is that, for flights touching the EU, seats with 38 inches, or less, of legroom are taxed at the economy rate, while anything more spacious attracts the, far higher, premium taxation rates. For that reason alone, I can’t see PE every moving much further, in terms of hard product, that that currently on offer by BA, VS, LH etc., all of which are at the limit of the economy taxation specification.

MathFox
Guest

I know that the UK has class dependent departure taxes, AFAIK these are not implemented on “the continent”. (Or not class dependent.)

Jon
Member

In my personal opinion, 38 inches of legroom is quite fine. In fact, that’s more than First class on many (most?) domestics. But I would give anything to see US carriers implement a true PE on long haul flights with better service – wider seats (ie 2-3-2 on a 77W instead of 3-3-3 in AA’s MCE), better food, and a footrest.

southbay flyer
Guest
I flew Premium Economy from SFO to AKL on Air New Zealand and it was really nice. The seats were more comfortable and the food was business class food (best airline food I’ve ever had). It was nice to be able to stretch and lay at a slightly more prone angle for a 13 hour flight. It’s not as comfortable as a lie flat J seat, but it’s pretty good and much more affordable. I would never go coach on an international long haul trip and that includes more legroom product offered by US airlines. I would fly in another… Read more »
biscuitfarmer
Guest

“What the heck is premium economy?” Airline double-speak!

David SF eastbay
Member

It should be a separate cabin and just call it “get away from the peons behind you” class or the “can’t afford business so sit here and pretend you’re better then the rift raft in cattle” class. :-)

Nun
Guest

It used to be that first class had flat beds and business was just a little nicer than economy.

Now first class has been or is being removed from many aircraft. Business has a bed, and “premium” is a little nicer than economy.

In other words airlines have just renamed everything. We’re practically back where we started.

David SF eastbay
Member

Yeah Nun you are right. What was First/Business/Coach is not becoming Business/PremiumEconomy/Coach as airlines figure out not that many people pay for First and most businesses will at least permit certain level travelers to have Business.

Frank of America
Guest

For business travelers its a way of satisfying a coach policy and still getting a bit extra comfort although having flown LAX-SIN 3x last year and LAX-LHR 1x already this year (2-3 more times to come) on UA’s Economy Plus its still no picnic. My backside is still sore and the food is still pretty awful. UA is the corporate preferred. I understand we may be looking at DL though. We shall see.

ptahcha
Guest

The closest thing comparable to international premium economy on an US airline is VX’s Main Cabin Select. Extra legroom and all the amenities of first class.

DL is starting to catch up. Free alcoholic beverages in economy comfort for international and transcon flights, and I think they now offer a free wrap on transcon flights as well.

CS
Guest

I wonder if having a large gap in service level is actually more of a money maker than offering more products. A lot of businesses that fly employees have a set hour threshold before upgrading them to J. If you make a middle of the road product, some business might change the policy to have that as the threshold for a plus type product, with a new greater threshold for J. Just typing out loud.

EthaninSF
Guest

I know plenty of coworkers who simply pay the upcharge themselves for the economy ticket purchased by the business. $100 premium for 5 hours of extra legroom is worth it for some. So it’s win-win for the airline.

drybean
Member

Thanks for the video…Could the Rockettes do their leg kicks in today’s seats on any airline?

Gary
Guest
thanks for the trip down memory lane with TWA’s Comfort Class. We were just coming out of our first (of 3!?!) bankruptcy and had to do something to generate buzz, business and a new look. We had tried a precursor of premium economy in the late 70’s (some, but not all coach with more legroom) but it was hard to manage/police (also, in those days we had smoking/non-smoking seats…try making that work on a narrowbody). Pulling seats to add more legroom throughout coach seemed very logical and was an instant “differentiator.” Comfort Class was a PR hit but unfortunately, we… Read more »
jaybru
Member
I ask, when did basic, decent economy go off the rails? A single inch in seat pitch is a big deal to me. I know, People Express, but the legacies? And, why can’t there be more consistently in seat pitch over the entire airline, regardless of the aircraft type? I’m willing to pay for what I get, but how in the world can I be assured I’m getting anything of value, one flight to the next? Do people really think they are getting the same quality of seat between mainline craft and regionals? OK, Southwest. If I can believe SeatGuru,… Read more »
Nick Barnard
Member

Well, you missed a point that in most cases UA doesn’t have the regional aircraft up against mainline aircraft on the same route. Plus they already have people paying for comfort coach.

But Geez, that 777 is cozy.. Didn’t 34″ of pitch used to be on the low side of things?

CP
Guest
I have flown Qantas Premium Economy several times. It is a very solid product–seat is equivalent to a domestic first class seat in the U.S. (with addition of footrest and leg support). Food is very good; similar to food in U.S. first class (when done well). Small cabin on the 747 feels more intimate. Definitely worth the extra cost, in my view, and a nice alternative for those of us unable to spend (or convince the company to spend) $7000-$10000 for the business class ticket. Not a bed, by any stretch of the imagination, but way more comfortable than standard… Read more »
oglala
Member
I fly only across the Pacific. I agree with the general opinion that New Zealand’s Economy Plus is awesome. Last week I flew [Is it too late to use the English language correctly and say “I was flown”] Cathay again Economy Plus. The benefit starts at boarding time when Economy Plus gets its own line separate from the lowing Tourist herd at the gate. The separate cabin area is a real plus somehow. I consider the Economy Plus concept [which I’ve happily experienced also with pioneer EVA] real value for money with 14 hours in a metal tube when one… Read more »
Mark
Guest
When you look back at the original “Business Class” in the late 1970s and early 1980s, it was just the first few rows of coach with better meal service, and it was provided to those who paid for a full-fare economy ticket.. Eventually it evolved to slightly larger seats, and eventually evolved to the International First Class it is today–And first class has evolved to something even more. I think what happened is there is a need for a class on international flights between steerage an lie-flat. What that means is a wider seat than economy (eight abreast in 747s… Read more »
Joe
Guest
If airlines don’t want to make premium coach a separate class, then the coach w/ extra legroom version is a good alternate. From my experience, extra legroom seats usually offer a decent legroom and recline advantage depending on the airline, Delta’s Economy Comfort seats for example offer 34-36″ of seat pitch on domestic planes while the EC seats on their BusinessElite equipped planes have 35-36″ of seat pitch and a 50% larger seat recline. Airlines can even add their own extras as well, such as: more seat width, a footrest, an adjustable headrest, better IFE and refreshment choices, more free… Read more »
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Matt
Guest

This is just small/medium/large going onto regular/large/jumbo all over again. Don’t let Starbucks rename your cabins!!

Nick Barnard
Member
This has been happening for a long long time in many industries. A long time ago in a galaxy where the airport with commercial service immediately to the north was previously a Piedmont hub, and the airport with commercial service immediately to the south was at the time a Delta hub, I worked at a McDonald’s. While I worked there we reworked our menu sizes. For drinks we had: 8 oz: kids 16 oz: small 21 oz: large 32 oz: supersize For Fries we had: 3 oz: small / kids 5 oz: large 6 oz: supersize Then we went to:… Read more »
Bob Barnard
Guest

I leave it to son to remind me of my earlier years. I will have to wait to see what else occurred when I was his age now.????

billyshearer
Member

Of course, not all Premium Economys are equal.

Virgin Atlantic’s is head and shoulders ahead of British Airways’ offering, while Air New Zealand leaves them both in its wake. Of course, you don’t want to make it so good that it stops people from trading up.

Bob S.
Member
I just flew Qantas – a “One World” airline – from DFW to SYD. Since my flight started in Memphis on American, I opted to accrue FF miles with American. I was then absolutely shocked to learn that American only gave me 25 percent of the actual flight miles since I flew “economy” as opposed to “premium economy”!!! That was a HUGE difference since my wife and I expected to have a nice second holiday by using those miles for a flight within the USA. This included their own flight segments since the AA flights were booked through Qantas. The… Read more »
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