Singapore Airlines (SIA) is facing a tough time selling its premium economy seats to travellers. Speaking to the media, executive vice president of commercial Mak Swee Wah said that the airline does not face an issue when it comes to selling its business class tickets on its non-stop flights to the US. However, premium economy seats face a different story.This comes as the airline recently ordered seven airbus flights with 67 business class and 94 premium economy seats to cater to its long hour and non-stop flights to the US.
According to an article on CNA, Mak said that this could be because some markets are not “entirely familiar” with the premium economy’s amenities such as more leg room and more. This has led to the airline pricing the segment rather “attractively”, the article added.
In a conversation with Marketing, Luke Lim, group CEO of A S Louken said that attractive should not mean cheaper as “cheaper is not a way to go” as this will devalue its positioning. SIA has a brand advantage over its quality and service experience records, and its key to resolve the lack in selling is in the differences in its pricing model.
Is premium looking like a downgrade?
Graham Hitchmough, regional chief operations officer of Bonsey Design said that due to the already high business demand on these [long and non-stop] routes, premium economy seats have become a “downgrade” option rather than a trade-up. He added that on a 19-hour flight, the value of business class flat-beds is “only further enhanced”.
According to Hitchmough, the challenge for SIA is that with the premium economy is currently “ill-defined and not broadly understood” in all markets, and the brand cannot afford to “muddy the waters” further with variable pricing.
“What is needed is a clear, customer-centric repackaging of the premium economy proposition overall, in order to reinforce it as a positive and distinct choice for travel rather than an incremental option. The benefit in terms of space and legroom is relatively straightforward, but the added value related to services and amenities such boarding, food service and entertainment are far less clear-cut,” he explained.
Hitchmough said that more effort should be made to demonstrate the value to passengers, the airline has to go beyond price. It can work with continued innovation around the service proposition throughout the customer journey, in a bid to better create obvious daylight between premium economy and other travel classes. He said:
Even the name itself could be reconsidered .
“This can help to reposition away from being simply economy with a few added bells and whistles,he explained. Although not easy in the current marketplace, SIA must focus on building product integrity and experience that is rooted in customer needs, he added.
Meanwhile, managing director of Fitch, Simon Bell echoed that the premium economy product is not understood as consumers are clear on the cost and service differences between business and economy, leaving premium economy a “bit blurry”.
According to Bell, the name “premium economy” is an issue as it feels “neither here or there”.
“By contrast, when SIA re-named their first class offer to ‘suites’, it resonated. Re-naming, then defining the clear difference (i.e. space) might be a forthright move for premium economy, and communicate the experience of other value-add service, to justify the price” he explained. Adding that the premium economy, while is a smart offer, “its narrative is poorly told”. He said that if the experience is explained and provided with back-up information, there’s no reason this product shouldn’t perform.