London Daily

Focus on the big picture.
Friday, Jun 20, 2025

Do Airlines Make Money From First Class?

Around the world, airlines are shrinking or phasing out first-class cabins entirely. Instead, they are investing heavily in pleasing a larger group of well-heeled travelers than the rare few who would shell out more than $25,000 for over-the-top luxury.

Airlines, including Delta and United, are rolling out business-class cabins with pods and suites reminiscent of the top-tier of commercial air travel, all in denser cabins, aimed at those flying for work. Rival Qatar Airways this year unveiled a business-class cabin that features side-by-seats that can be converted into a double bed.

Unlike the rare few who shell out for the five-figure fare for a seat in an international first class, a business traveler is a repeat customer. Airlines are betting that these travelers (or more likely, their employers) are willing to splurge on a seat that provides ample workspace and a lie-flat bed for a good night’s sleep, and that it will boost their bottom lines. Elsewhere, these carriers are grappling with flyers constantly on the lookout for the latest rock-bottom fare.

Airlines are finding that they don’t need first class and want to fill their planes with as many paying passengers as possible. Emirates, which offers a first-class product with a shower, said it will fly planes between Dubai and London this December with business class and economy only, on some flights, due to high demand.

Utility not luxury


“The majority of the high-value passengers prefer to be left alone than lavished upon,” said Bruce Spear, a partner and a travel and transportation analyst at consulting firm Oliver Wyman. “It’s utility that carries the day, not luxury.”

Only 5.3 percent of travelers in the first seven months of 2017 flew in a premium-class cabin, which includes business class, but their contribution of airline revenue was 26 percent in that period, according to the International Air Transport Association, a trade group representing the world’s biggest airlines.

But some airlines are clinging to first-class cabins, and making them more opulent than ever.

Singapore Airlines, whose luxurious first-class service has long been part of its marketing, this week unveiled its new flagship product: large suites that look more like flying hotel rooms than airplane seats. But these suites, which feature fold-out beds and swivel seats, are fewer now —the revamped cabin reduced the number of suites on board the A380, the world’s largest airplane from 12 to six.

It pits the carrier against Persian Gulf airlines, like Etihad, which offers a three-room suite it calls “The Residence.”

Such a first-class product “creates a brand halo” for the airline.

But as lie-flat beds and pods in business class become the norm, carriers are looking at other ways to stand out in the premium cabin world, adding fancy bedding, food and amenities kits that include pajamas.

First-class freebies are fading


Airlines also want passengers to pay for these seats, and have scaled back on free upgrades and instead sell the bump to the better cabin, or sell the tickets outright.

When asked about why it is so difficult to get upgraded, United CEO Oscar Munoz told CNBC last month that passengers are paying for seats and “that’s a good thing for our business.”

A decade ago Delta would sell only about 15 percent of its first-class cabins and now between 50 and 60 percent is sold, Delta’s CEO, Ed Bastian, told reporters last month. He recently said it was too early to determine the percentage of business-class seats that are sold, because its revamped Delta One cabins are brand new.

“Everybody loves a free something,” Bastian said at a conference a month earlier. “Any business where you give the majority of your best product away, it doesn’t work.”

Delta Air Lines, United Airlines and American Airlines make a lot of their money at the front of the plane. A strong economy and industry consolidation has allowed the airlines, in recent years, to invest in more fuel efficient planes with better cabins focusing on premium classes.

One focus has been rethinking business class. First class internationally and on some key domestic routes has become a hybrid of first and business class.

As of November 2019, if you wanted to book a first class round trip flight on Emirates from JFK to Dubai at the last minute it could cost you over $23,000.

Flying from New York to Mumbai? Etihad Airways offers a three-room luxury suite called The Residence which features a private bathroom, a private living room and a personal butler. Flying round trip on Etihad for that flight could be over $36,000.

And, for about $3,000, American Airlines Flagship First fliers can go from New York to Los Angeles with access to an exclusive check-in area and premium wines in the flagship lounge.

While the airlines make a significant amount of money packing people into coach like cattle, premium cabins like business and first class are still a major source of income for U.S carriers.

Newsletter

Related Articles

0:00
0:00
Close
16 Billion Login Credentials Leaked in Unprecedented Cybersecurity Breach
Senate hearing on who was 'really running' Biden White House kicks off
Iranian Military Officers Reportedly Seek Contact with Reza Pahlavi, Signal Intent to Defect
FBI and Senate Investigate Allegations of Chinese Plot to Influence the 2020 Election in Biden’s Favor Using Fake U.S. Driver’s Licenses
Vietnam Emerges as Luxury Yacht Destination for Ultra‑Rich
Plans to Sell Dutch Embassy in Bangkok Face Local Opposition
China's Iranian Oil Imports Face Disruption Amid Escalating Middle East Tensions
Trump's $5 Million 'Trump Card' Visa Program Draws Nearly 70,000 Applicants
DGCA Finds No Major Safety Concerns in Air India's Boeing 787 Fleet
Airlines Reroute Flights Amid Expanding Middle East Conflict Zones
Elon Musk's xAI Seeks $9.3 Billion in Funding Amid AI Expansion
Trump Demands Iran's Unconditional Surrender Amid Escalating Conflict
Israeli Airstrike Targets Iranian State TV in Central Tehran
President Trump is leaving the G7 summit early and has ordered the National Security Council to the Situation Room
Taiwan Imposes Export Ban on Chips to Huawei and SMIC
Israel has just announced plans to strike Tehran again, and in response, Trump has urged people to evacuate
Netanyahu Signals Potential Regime Change in Iran
Juncker Criticizes EU Inaction on Trump Tariffs
EU Proposes Ban on New Russian Gas Contracts
Analysts Warn Iran May Resort to Unconventional Warfare
Iranian Regime Faces Existential Threat Amid Conflict
Energy Infrastructure Becomes War Zone in Middle East
UK Home Secretary Apologizes Over Child Grooming Failures
Trump Organization Launches 5G Mobile Network and Golden Handset
Towcester Hosts 2025 English Greyhound Derby Amid Industry Scrutiny
Gary Oldman and David Beckham Knighted in King's Birthday Honours
Over 30,000 Lightning Strikes Recorded Across UK During Overnight Storms
Princess of Wales Returns to Public Duties at Trooping the Colour
Red Arrows Use Sustainable Fuel in Historic Trooping the Colour Flypast
Former Welsh First Minister Addresses Unionist Concerns Over Irish Language
Iran Signals Openness to Nuclear Negotiations Amid Ongoing Regional Tensions
France Bars Israeli Arms Companies from Paris Defense Expo
King Charles Leads Tribute to Air India Crash Victims at Trooping the Colour
Jack Pitchford Embarks on 200-Mile Walk to Support Stem Cell Charity
Surrey Hikers Take on Challenge of Climbing 11 Peaks in a Single Day
UK Deploys RAF Jets to Middle East Amid Israel-Iran Tensions
Two Skydivers Die in 'Tragic Accident' at Devon Airfield
Sainsbury's and Morrisons Accused of Displaying Prohibited Tobacco Ads
UK Launches National Inquiry into Grooming Gangs
Families Seek Closure After Air India Crash
Gold Emerges as Global Safe Haven Amid Uncertainty
Trump Reports $57 Million Earnings from Crypto Venture
Trump's Military Parade Sparks Concerns Over Authoritarianism
Nationwide 'No Kings' Protests Challenge Trump's Leadership
UK Deploys Jets to Middle East Amid Rising Tensions
Trump's Anti-War Stance Tested Amid Israel-Iran Conflict
Germany Holds First Veterans Celebration Since WWII
U.S. Health Secretary Dismisses CDC Vaccine Advisory Committee
Minnesota Lawmaker Melissa Hortman and Husband Killed in Targeted Attack; Senator John Hoffman and Wife Injured
Exiled Iranian Prince Reza Pahlavi Urges Overthrow of Khamenei Regime
×