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 The Brancatelli File

joe ALL BUSINESS CLASS ALL THE TIME

BY JOE BRANCATELLI

October 26, 2006 -- It is the peculiar nature of commercial air travel that the truly inventive new service concepts are tested on the world's busiest routes--and on the least-trafficked ones.

Which pretty much explains why the most appealing new idea up there--all business-class flights that jettison leisure travelers and cater only to our peculiarities--is showing up on a bellwether route like New York-London and making its bones on a niche run like Chicago-Düsseldorf. Life on the road may be more of the same-old same-old in the middle of the pack, but business travelers are suddenly living large on the busiest transatlantic routes and some of the most peculiar ones.

Attention must be paid to the concept of all-business-class flights just now because two all-business airlines--Eos and Maxjet--are celebrating their first anniversaries in the skies. It's also a good time to take stock because a third is nearing its six-month mark and at least two other all-business start-ups are waiting in the wings. Besides, the concept of outfitting flights with only business-class service has also taken hold at several traditional carriers.

As you can see by the chart below, at least a dozen international routes with a business-only approach are being flown by airlines new and old. That doesn't even include Midwest Airlines, which still offers its virtual business-class concept, now called Signature Service, on many of its domestic routes. The pricing and seating offerings vary dramatically, but the core concept is the same: Sell business-class-only flights to business travelers who demand or need a different way to travel.

NEW AIRLINES, NEW IDEAS IN 'C'

Carrier

Nonstop Route(s)

Aircraft and Service

Roundtrip Pricing*

Eos Airlines

New York/JFK - London/STN

B757s with 48 seats converting
to 78-inch lie-flat beds

$3,000 - $6,850

Eurofly

New York/JFK- Milan/MXP

A319s with 48 seats
(58-inch pitch/21-inch wide)

$2,498 - $3,998

Maxjet Airways

New York/JFK - London/STN
Washington/Dulles - STN
Las Vegas - STN (eff. 11/2)

B767s with 102 seats
(60-inch pitch/20-inch wide)

$1,566 - $3,440 (JFK) $999 - $3,640 (IAD) $999 - $4,434 (LAS)

FAMILIAR AIRLINES, NEW IDEAS IN 'C'

KLM

Houston/IAH - Amsterdam

B737s with 44 seat/beds

Traditional C Class

Lufthansa

Newark - Düsseldorf
Newark - Munich
Chicago/ORD - Düsseldorf

Düsseldorf: A319s with 48 seats (58-inch pitch/21-inch wide);
Munich: B737s with 44 seats converting to 73-inch beds

Traditional C Class

Singapore Airlines

Newark - Singapore
Los Angeles - Singapore

A340-500s with 181 seats;
64 in standard business class;
117 in Executive Economy
(37-inch pitch/20-inch wide)

15 percent above the business or coach fare on connecting flights

Swiss International

Newark - Zurich

B737s with 56 seat/beds

Traditional C Class

EXPECTING TO FLY

Elysair

Newark - Paris/Orly

B757s with 90-100 seats, beginning spring 2007

Unknown

Silverjet

Newark - London/Luton

B767s with 100 seat/beds,
beginning January 25, 2007

Not yet approved in US;
£799 from London

*Before taxes and fees, except for Maxjet, which lists all-inclusive prices.


"Everybody is trying to reinvent the wheel" to appeal to high-profit business-class flyers, says Rosario Mariani, general sales agent for Eurofly's all-business-class flights between New York's Kennedy Airport and Milan's Malpensa Airport.

Much like the all-business-class flights being offered on niche routes by traditional carriers, the Italian carrier Eurofly has reconfigured an Airbus A319 with just 48 seats. The flights offer faster boarding and shorter check-in times--you can usually arrive less than an hour before departure--partially because the aircraft carries so few passengers and partially because Eurofly is using specially chosen airport facilities. It operates from Terminal 4, the newest and best at Kennedy, and Malpensa's Terminal 2, which is much calmer than frenzied Terminal 1.

But unlike the traditional carriers with all-business service, who charge traditionally high business-class fares, Eurofly's pricing is more in line with the rates charged by its start-up brethren, Maxjet and Eos. When it launched on May 29, Eurofly's introductory roundtrip rate was $1,999. Current prices range from $2,498 roundtrip with a 30-day advance purchase to $3,998 roundtrip on a walk-up basis. That's about half the walk-up business-class price charged by Continental, Delta and Alitalia on their two-class flights between New York and Milan.

Eos Airlines, which offers the equivalent of first-class service between JFK and London's Stansted Airport on Boeing 757s configured with just 48 lie-flat seats, not only undercuts traditional first-class fares, but normal business-class prices, too. Launched a year and a week ago, Eos offers promotional fares as low as $3,000 roundtrip. Its walk-up fare is now $6,850 roundtrip. Although promotions and sales are common in business class on the so-called NyLon route, traditional airlines post roundtrip walk-up prices north of $9,000 for business class and $13,000 in first.

But Eos doesn't like to sell on price and the airline's founder, David Spurlock, is much more comfortable touting the end-to-end service that the airline provides. Eos offers a 45-minute check-in time and will have an employee meet you curbside and shepherd you through check-in and security if you're running late.

The Eos concept proved itself in August when the London terrorist plot forced overnight changes in carry-on rules and caused monumental delays and cancellations on flights to or from London. Spurlock says Eos' delays averaged just 14 minutes. It also operated all of its flights during the period.

In September, Eos added a second daily flight and Spurlock says load factors were 66 percent in the first month of two-a-days. This week it announced a wonderfully whimsical promotion called Best Seller Tuesdays. Every Tuesday through the end of the year, Eos passengers will receive a best-selling book from the Penguin Group. Passengers also get all of the perks that premium-class customers have come to expect on the New York-London route: free airport limo service; lavish airport lounges; shower suites on arrival; and bountiful in-flight meals and entertainment options.

"You have to pick your markets and aircraft carefully to offer a service like this," says Spurlock. "Only a few markets reward airlines offering a premium service. To me, that means overnight and overseas to primary business destinations."

By contrast, Lufthansa has pioneered the idea of using smaller jets, specially configured for all-business-class service, on special routes. The idea is that some markets have substantial, and profitable, business-travel demand, but won't support Lufthansa's traditional three-class operation on widebody jets.

Lufthansa first launched the approach in June, 2002, between Newark and Düsseldorf, a nonstop route that had plenty of business-class appeal for the pharmaceutical and high-tech industries but little or no interest for leisure travelers. It hired a Swiss private-jet operator, PrivatAir, and specially configured a Boeing 737 with just 48 business-class seats. It has subsequently launched two other all-business routes--Chicago/O'Hare-Düsseldorf and Newark-Munich--and added Airbus A319s configured with 48 seats. The A319s now operate on the Düsseldorf routes and Newark-Munich uses a Boeing 737 configured with just 44 seats.

Priced identically to Lufthansa's business-class service on traditional three-class flights, the all-business-class routes offer free limo transfers to the airport and the traditionally superb Lufthansa in-flight business-class service. The 737 is slightly more lavishly appointed (seats recline 170 degrees and offer 73 inches of seat pitch), but the A319 flights offer chairs with 58 inches of legroom and 160-degree reclines.

Lufthansa's niche approach has attracted imitators. In January, 2005, Swiss International dropped its three-class Airbus A330 flights between Newark and Zurich. In its place came a PrivatAir 737 equipped with just 56 business-class seats. KLM followed late last year when it hired PrivatAir to operate a 44-seat Boeing 737 on the Houston/Intercontinental-Amsterdam route.

The all-business-class concept is morphing in other directions, too.

Maxjet launched a few weeks after Eos last year and now flies to London/Stansted from both JFK and Washington/Dulles. A third route from Las Vegas starts next week. Maxjet is flying larger Boeing 767s and has configured the aircraft with 102 business-class seats offering 60 inches of legroom. The Maxjet concept is much less exclusive than Eos' or the all-business-class offerings of the traditional carriers, of course, but so is its pricing.

Maxjet has generated immense amounts of attention by offering sale-priced tickets for as little as $999 roundtrip including all fees and taxes. (That price is currently available from Dulles and Las Vegas for travel through March 15 if you purchase tickets by November 6.) Its walk-up prices are equally amazing: Just $3,400 roundtrip from Kennedy, for example. But as late as 2 p.m. this afternoon, I found seats available at just $1,400 one-way on tonight's 8:15 p.m. JFK departure.

And Singapore Airlines has broken new ground on its two ultra-long-haul nonstops from Newark and Los Angeles. It jettisoned both the first and coach classes on the 18-hour flights to Singapore and equipped the Airbus A340-500s with just 181 seats. Sixty-four of the chairs are in Singapore's familiar business-class configuration. The other 117 are in an entirely new cabin called Executive Economy. They are 20 inches wide--that's as wide as many international business-class seats--and have 37 inches of legroom. Configured 2x3x2, they are extraordinarily comfortable and outfitted with audio/video systems offering about 500 movies, television programs and CDs. It's not exactly a ride in business class, but Executive Economy isn't like any coach cabin you've ever experienced, either.

Of course, the concept of all-premium-class commercial flying isn't new. Regent Air and MGM Grand offered first-class-only flying on transcontinental routes in the 1980s and early 1990s. Several all-business domestic carriers--Air One, McClain, Midway MetroLink--came and went in the 1980s, too. United Airlines briefly ran a one-class, better-than-coach operation on some key business-travel routes in the early 1960s.

Those earlier failures raise a troubling issue for the current crop of all-business services: Any carrier that has substantially fiddled with the accepted density of a commercial aircraft has eventually tanked, usually sooner rather than later. That's because the aircraft of the jet era have all been built to accommodate a basic service model: a smallish, expensive premium-class service up front and a pack-'em-in coach cabin down the back. Any deviation from the formula has failed.

Spurlock of Eos, at least, is convinced that he can beat the odds. Why? He insists that Boeing 757s are perfect for medium-haul, international premium-class operations.

"The 757 is the smallest and most efficient plane for 4,000-to-4,500-mile routes, which happens to be the sweet spot for premium transatlantic traffic," he claims. "A widebody aircraft is too big, too costly too operate, burns too much fuel and has too much range. But if you match up the right plane and the right markets, you can make a premium-class service work."

Copyright © 1993-2006 by Joe Brancatelli. All rights reserved.