Travel Made Luxurious -- for a Price

Nov. 17, 2006 — -- As millions of Americans gird themselves for the long airport lines and packed planes forecast for Thanksgiving travel, the buzz in the airline business is about sweeping improvements for the privileged few who can afford premium fares.

At least four airlines have announced investments of hundreds of millions of dollars -- not to relieve the cramped conditions in coach and improve the sometimes surly service, but to make first and business class on international routes even more luxurious. Why? Because that's where the money is.

Over the last two years premium travel -- first and business class -- has grown by double digits each year. Most airlines now count 40 percent of their revenue from passengers in the front. And airlines are battling for their business, because fares can range from $5,000 to $12,000 for first and business class trips across the Atlantic and Pacific.

One reason people are willing to pay that much money is to be fresh, rested and ready for a business meeting in a far-off location. Another is the increasing desire for privacy.

"Nobody wants to wake up while flying across the Atlantic and find somebody drooling in their face or be working on a laptop and see somebody looking over their shoulder," says Eva Leonard, editor in chief of Business Traveler USA.

"We've seen strong, underlying demand for premium traffic and it's not just driven by business travel," says Willie Walsh, CEO of British Airways. "We've seen very strong evidence that people are prepared to pay a premium and travel in comfort."

Walsh could also say that his airline and others are creating an "extreme" first and business class in pursuit of high fare passengers. It is the fastest growing segment of the airline business.

It was British Airways that began the competition for lucrative premium customers six years ago by introducing flat-bed seats in business class. And this week the airline unveiled yet a new seat and enhanced service -- the product of a $200 million investment.