Business class is fast becoming a battleground for airlines

Business travel

November 18, 1991|By Tom Belden | Tom Belden,Knight-Ridder

On Virgin Atlantic Airways, it's an in-flight "beauty therapist" who will massage your neck and give you a manicure at 30,000 feet. At British Airways, it's sprawling new airport lounges and wine tastings on the first Friday of every month before you board your Philadelphia-to-London flight. In United's new Connoisseur Class, it's caviar canapes before dinner and Godiva chocolates after.

All of these earthly delights are among the things international airlines are doing these days, not just for first-class passengers, but for those in business class as well.

Especially as competition has heated up this year across the North Atlantic, with American, Delta and United now competing with major European airlines more fiercely than ever, international business-class service has become a battle ground.

Some airline executives scoff at the idea that creature comforts are what really drive international business travelers to take one carrier instead of another. Besides convenient schedules and frequent service to the cities or regions where they need to be, thousands of passengers in business class every day are flying a particular airline for the most basic of reasons: price, the skeptics say.

Although international air fares in theory are strictly regulated and discounting is prohibited, in practice large corporations that buy hundreds or thousands of tickets a year routinely get price breaks on business-class fares with particular airlines.

The discounts usually come to the companies through their travel agencies, which can negotiate commissions on every business-class ticket sold, ranging from 20 percent to as much as 40 percent. The commissions are then shared by the agencies with their clients. An important caveat to getting the discounts is a promise by the corporation and the agencies to an airline to book a certain amount of business with the carrier.

"I don't think anyone is too concerned about the masseuse and the wine tastings," said an official of a major U.S. carrier. "That's not what's going to drive business to a carrier. Business travelers are going to go with whomever they're told to go with. Every major international airline has tried to cut a deal with big corporations."

But that isn't the conventional wisdom among many airline marketing executives.

British Airways, which is facing vigorous new competition this year from American and United at its hub at London's Heathrow Airport, is a perfect example. British Air has the largest share of transatlantic passengers of any airline, about 39 percent of the -- total.

To try to hang on to that share, the airline just spent $12 million to upgrade facilities and service for its Club Europe business-class passengers in London and is putting out an additional $17.5 million to provide special services for North American business travelers. The latter expenditure is part of $130 million the airline is spending over three years to improve all of its on-board services.

Among the results of the effort are the sprawling new Club Europe lounge in Heathrow's Terminal 1, which looks more like a modern, private, downtown business club in a U.S. city than it does an airport lounge. Besides the expected -- 250 comfortable lounge chairs, a special-services desk for making travel arrangements, an abundance of free beverages, snacks and newspapers and dozens of telephones -- there are free showers, amenity usually reserved for first-class passengers.

"We're in a real battle for the business traveler," said John Lampl, British Airways' public affairs manager for North America. "We're doing what we call a premium push."

Most business travelers are looking for convenient airline schedules first, followed by attention to price and the comfort and frills of in-flight and pre-flight service, Lampl said. Then, if a corporate travel department gives an employee a choice of more than one airline, wine tastings and the quality of in-flight services may well determine whether a traveler is converted into a loyal customer, he said.

Other major U.S. carriers, including United, American and Northwest, are responding to the competition, in some cases with enhanced international service in business class that is comparable to what, for many years, was available only in first class.

Typical is what United put in place Nov. 1.

Besides giving its international business class a new name and an elegant and costly meal service, it reconfigured the seats in the Connoisseur Class cabin. On its international Boeing 747s, for example, the seats are now arranged in rows of seven across, instead of eight across as they were before. Each seat is wider and has more legroom than before and has a footrest. Cabins have larger overhead storage bins and more restrooms than before.

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