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Friday, 22 July 2016

Different wage earners targeted by airlines of the US, Europe and Middle East

Class wars in the air: The airlines industry appears to be dividing along the lines of two competing philosophies for growth in different parts of the world. While the European and American carriers are betting on austerity-minded, post-global financial crisis passengers, their Middle-East-based competitors are throwing their weight behind the elite. In the US the trend has been marked by the emergence of the “basic economy” class, first introduced by Delta back in 2014, and now joined by United and American airlines. Basic economy is just as what it sounds. A new steerage section, with amenities less than regular economy (few as they were). The trend toward low-priced tickets stems from competitive pressure, specifically from budget carriers like Spirit Air, Frontier and Ryanair in Europe, according to The Economist. And the proof is in the single-serving pudding, with Spirit and Ryanair being two of the most profitable airlines in the world.

On the flipside, Emirates, Etihad, and Qatar Airways have been competing for premium passengers with increasingly decadent seats, reports Bloomberg’s Eric Rosen. Leading the way was Etihad, which launched the three-room “Residence” and enormous first-class suites and “Apartments” on its double-decker Airbus A380s in the same year Delta’s basic economy class launched. With an exceedingly large mileage requirement and point-system which could run you around USD 32,000 for the airfare, this hotel in the sky is marketed to the jet-setting businessman with prices that are “astronomical but doable”. These widely different strategies possibly reflect the different attitudes to air travel in both markets, where one regards it more as a luxury than the other.

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