Airlines are expanding their premium services as rising fuel costs put pressure on profits, betting that passengers will spend more on comfortable seats, better food and exclusive airport experiences. From economy-class rows that convert into beds to luxury first-class suites with double beds, carriers are investing in new ways to generate more revenue from passengers willing to pay extra for comfort.
The strategy is changing how airlines approach cabin design, with some considering fewer standard economy seats in favour of premium economy, business class and additional paid services. Rather than relying mainly on traditional business and first-class tickets, airlines are increasingly offering smaller upgrades that allow economy passengers to pay for selected comforts.
The pressure to find new sources of revenue has increased as the war in Iran pushes up jet fuel costs. However, airlines see premium travel as a longer-term opportunity to improve profitability, particularly because higher-priced seats can generate considerably more revenue from limited cabin space.
Volodymyr Bilotka, a professor at Purdue University who specialises in aviation economics, told AFP that a business-class seat can occupy the same floor space as approximately four standard economy seats while selling for five or six times the price. He said airlines have traditionally invested heavily in premium services because the profit margins are significantly higher.
American Airlines has already reported strong results from this strategy. In its most recent quarter, the carrier recorded an 18.5% year-on-year increase in premium revenue, outperforming the main cabin by four percentage points. The airline described premium travel as a bright spot in a market facing higher fuel costs and other pressures.
According to American Airlines, premium products currently generate approximately half of its ticket revenue despite accounting for around 30% of its seats. The figures demonstrate why airlines are increasingly focusing on passengers who are prepared to spend more on their journeys.
The additional spending is not limited to business and first class. Passengers can pay up to $200 (approximately EUR 179) for options such as extra legroom, preferred seating near the front of the aircraft and priority disembarkation. These smaller upgrades allow airlines to generate additional income without requiring customers to purchase an entirely different ticket class.
The growth in premium seating has been particularly noticeable in the United States. According to travel news publication Skift, the number of premium seats on US flights has increased by 33% since 2020, more than twice the growth recorded for standard mainline seating.
United Airlines has also expanded its premium capacity significantly. The carrier told AFP that it more than doubled its premium-seat capacity between 2015 and 2026 and intends to introduce further options.
One of its upcoming products is Relax Row, scheduled to launch in 2027. The concept will allow passengers travelling in economy class on selected wide-body Boeing aircraft to convert a row of three seats into a larger space for resting or sleeping after take-off. The arrangement is designed to give economy passengers some of the comfort associated with more expensive cabins without requiring them to book business class.
United is also preparing another option called Economy Plus, which will allow passengers to avoid having another traveller occupying the middle seat. The airline plans to introduce the service on selected flights towards the end of 2026.
JetBlue is pursuing a similar strategy with the introduction of BlueFirst, a new first-class service for domestic routes. Chief executive Joanna Geraghty said customers are increasingly looking for more premium experiences, reflecting the airline’s decision to expand its higher-end offering.
Delta Air Lines has also invested in its Delta One service, which includes upgraded food, premium wines and larger entertainment screens. Its menu development involves Simon Hulstone, chef of the Michelin-starred restaurant The Elephant in Torquay, England, and award-winning sommelier Andrea Robinson.
The airline plans to introduce the service on its new Airbus A350-1000 aircraft, which are expected to feature approximately 150 premium seats alongside 161 economy seats. Ekrem Dimbiloglu, Delta’s managing director for onboard strategy and experience, said the balance between economy and premium seating has changed considerably over the past two decades. He noted that while around 90% of seats were previously in the main cabin, premium seating could account for as much as 70% on some future Delta flights.
The shift is also taking place among international carriers. British Airways announced in October that the upper deck of its two-level Airbus A380 would be dedicated entirely to premium seating. Singapore Airlines, meanwhile, recently announced a EUR 1.4 billion investment in upgrading its luxury long-haul cabins. The planned improvements include what the airline describes as the largest double bed in commercial aviation for its first-class passengers.
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Some airlines have taken the premium approach further by operating aircraft without economy seating altogether. BeOnd and La Compagnie already focus exclusively on business-class travel. UK holiday airline Jet2 has also announced a new charter service using a specially configured Boeing 737-800NG with 76 business-class seats.
The expansion is not limited to aircraft cabins. Airlines are investing in airport lounges, improved dining options, advance meal selection and complimentary Wi-Fi as they look to make the entire journey more attractive to passengers willing to pay for additional services.
Consultancy Cirium estimates that premium seats across 42 airlines belonging to the three major global airline alliances, SkyTeam, Oneworld and Star Alliance, as well as Middle Eastern carriers, now account for 19% of total seating capacity. That compares with 17.1% in 2019.
Even airlines traditionally associated with lower fares are investing in better airport facilities. Southwest Airlines, for example, has announced improvements to its lounge offering, reflecting a wider shift in the industry towards attracting customers who are prepared to spend more.
The growing focus on premium passengers could create opportunities for discount airlines to compete by maintaining lower fares while offering selected upgrades. However, rising fuel prices remain a challenge across the industry, making it difficult for carriers to rely on any single strategy to protect their margins.
For passengers, the changes could mean more choices when booking flights, including additional comfort options within economy class. However, if airlines continue allocating more cabin space to higher-priced products, travellers looking for the lowest possible fares could find fewer standard economy seats available on some routes.
