How and why has premium economy become such an airline success story?

Although a concept that many people still regard as relatively 'new' in terms of passenger air travel, the phenomenon of premium economy has actually been with us for more than thirty years. In this article, we examine the origins of premium economy cabins, how the concept came about, who the early adopters were, how offering premium economy works for airlines and how it has flourished into the enormous success story it is today.

During the 1970s, airlines typically offered either just a single class of travel or in some cases (particularly US domestic and long-haul travel), a two-class cabin featuring a first-class section and an economy (or 'coach') cabin for those who were traveling on a tighter budget. There was almost no adoption of any intermediate classes of service onboard passenger aircraft, with most carriers making do with this two-class arrangement. This status started to change in the late 1970s. Australian carrier Qantas, which was transitioning to become an all-Boeing 747 operator at the time, identified the scope for a third intermediate class of service. The enhanced offering was aimed at those long-haul flyers who desired more comfort onboard but whose budgets would not stretch to the full first-class airfare.

The new cabin concept was termed 'business class' and other airlines soon followed the lead set by Qantas. British Airways, TWA and Pan Am emulated the idea on their own fleets soon afterward. It was not long before almost all major long-haul airlines featured a business class cabin, recognising the need to keep up with the market while fearing lost revenue to their competitors should they fail to do so.

The introduction of premium economy came around in a comparable way to that of business class. Identifying a market whereby a certain number of economy passengers were willing to pay a little extra for additional comfort on long-haul flights but were either unwilling or unable to pay for a full business class airfare, airlines began revisiting the classes of service they offered onboard their flights in the early 1990s. In 1991, the Taiwanese carrier EVA Air introduced a revolutionary new class of travel onboard its Boeing 747-400 fleet. The new service was initially branded as 'Evergreen Class, before later adopting a more descriptive name, premium economy.