Asiana: ‘Business Suites’ – we used to call it First?

This seems to be a trend. Renaming First Class – often with suites – as ‘Business Suites’ like Malaysian Airlines did it in December 2018. Alternately, airlines are eliminating first class entirely like Korean Air will do from mid this year.

Although not the first, the latest to adopt this trend is Korean based Asiana Airlines. In a notice to customers titled ‘Business Suite Reorganization Guide (First Class service discontinued)’ they advise that they are discontinuing First Class on routes between Incheon and Los Angeles, New York and Frankfurt starting on September 1st. I had to Google Translate this page – so here is a screen grab so nothing gets lost in translation.

Deck chairs are being re-arranged

Asiana – Korea’s 2nd largest airline – has not been doing well, and the Korean Herald is reporting that this move is in preparation for the airlines’ sale.

Asiana has been losing money for a while now, so they are tidying things up by eliminating their (presumably loss-making) First Class and closing a bunch of unprofitable routes to destinations in Russia and India.

The route overhaul and the removal of first-class cabins come as the airline has been put up for sale due to a heap of debts.

Asiana owes financial institutions 3.2 trillion won ($2.7 billion) in short-term obligations, with some 1.2 trillion won of loans maturing this year.Korea Herald

They are keeping the first class cabin but altering the service provided. This is obviously a cheap fix. No need to spend money on changing seats – just reduce service, and sell them at a premium to ordinary Business, but a discount to the former First class fares.

Asiana only has First Class on its small fleet of A380’s – it eliminated first class on its other aircraft some time ago.

The demise of First Class

Korean Airlines – Asiana’s competitor has eliminated First Class. Malaysian Airlines rebranded its First Class as ‘Business Suites’ in December 2018.

Business class, on the other hand, is booming, with constant improvements to the hard product, including suite like enclosures. With QSuites – Qatar Airways new business class – the hard product is so close to what we would expect from First Class including lie-flat couples’ bed, privacy panels and slider doors that allow passengers to create a private ‘room’ – its hard to argue for an even more sumptuous First Class cabin.

What about Qantas?

Qantas only has first class on its A380’s. It is not installing First class on their newer planes – that includes new 787’s, although it has promised to refresh First Class on its A380’s. We have yet to h.

Project Sunrise – the aircraft that will be able to fly non-stop from Australia’s east-coast to either London or New York (probably an A350ULR or B777X) – will have the ‘best ever’ first and business class according to Alan Joyce, Qantas CEO as quoted in Australian Business Traveller.

So what’s driving this?

Well – besides Asiana’s immediate financial woes – I think it is companies and governments. Plenty of businesses and government departments will allow their workers to travel in Premium Economy or Business on routes over a certain distance or flight times. But they will have an absolute prohibition on First Class. Some even enforce this on personal upgrades.

So to avoid this – if you call it ‘Business Suites’, or ‘Business +’ or something else that doesn’t have ‘First’ in the title, then executive ‘X’ can travel in it, and still obey a company prohibition against flying in ‘First’ class.

That need – combined with the improvements in Business Class on a range of Airlines begins to question the need – or desirability of what in most cases is a loss-leading First Class cabin.

Take Out

First Class is here to stay for at least a while, judiciously chosen for specific aircraft on specific routes. There is enough demand to preserve it, and it will get more sumptuous in both hard product and service.

It will disappear from airlines in trouble (Malaysian and Asiana as an example). It’s too complicated when an airline is in distress, and when they have larger fish to fry in the economics of running an airline.