As airlines fight for a shrinking number of first-class passengers, they’re prepared to lay out even more money to win their loyalty…which seems a risky business move to us.
This week, Lufthansa unveiled a 12,000-square-meter first-class lounge at Frankfurt Airport, featuring a full-service spa, spacious bathrooms with whirlpool tubs, and a bar offering 84 different single-malt whiskeys. As part of the package, fliers get zipped to and from planes in Mercedes limousines or Porsche Cayenne sport-utility vehicles. The airline opened a three-level lounge at New York’s John F. Kennedy International Airport in January and plans for similar spaces at Paris and Mumbai airports soon.
As airlines slash route and ground planes during the downturn, some, such as American, Qantas, and British Airways, are sinking money into exclusive lounges for their highest paying customer. Of course, if you pay $10,000 or more for a roundtrip flight, maybe you deserve a limo. We’re not sure. We’re certainly not at that level. While airlines are improving the amenities onboard, there is only so far you can go in the space you have. After Lufthansa opened the world’s first dedicated first-class terminal at its Frankfurt hub in 2004, traffic by its highest-paying customers jumped as much as 25%. But that was 2004.
Business or first-class is a problem in this economy. Do you, as a manager tell your remaining employees you are about to spend a few thousand on an airline ticket after laying off a few dozen of their colleagues? Many managers are afraid to leave their place of business to find they have no job when they’ve returned. We’re not economists, but we hope these airlines are right about this. We can’t afford the further erosion of basic quality. The impression by many economy passengers of their lack of importance compared to business and first-class passengers will only grow, and with it resentment.
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