The air travel business is the most competitive on earth. As Travellers' Check has explained before, the airline game has the smallest industry-wide margins of any consumer business so its marketing people will die in any ditch if it’s deemed necessary to secure customer loyalty.
But price is king, which makes the imperative to deliver the product at the lowest cost, which gave birth to the low-cost carrier, which removes or charges for what full-service carriers provide for free.
In fact, even the full-service carriers these days are looking like budget airlines with less and less that’s included in the price and more and more turned into chargeable extras.
Yet, when the lemon gets squeezed, going downmarket isn’t the only option. The airline industry has spawned commercial geniuses, who’ve been able to come up with revolutionary business models that deliver low costs and therefore low fares with frills included and without squeezing our bottoms into tiny seating spaces.
One such trail-blazer was David Neeleman, who invented America’s JetBlue in 1999, a long-distance US domestic airline based at New York’s Kennedy airport.
Not only do you get America’s most spacious economy seating of up to 86 centimentres (34 inches) per row at a low price in JetBlue’s A320s and A321s criss-crossing the American continent, you also get live in-flight TV in every seat included in the ticket price and Sirius satellite radio, an American innovation that has hundreds of channels.
"It has never been our goal to be the lowest cost airline out there,” says current chief executive Dave Barger. “Our mission has always been to provide more value for a fair price."
Yet, according to industry analysis, JetBlue’s economics are so good it’s around 10 per cent cheaper to operate per seat than mega-LCC Southwest Airlines.
As necessity is the mother of invention, airline innovations can pop up wherever they’re needed and Japan’s Skymark airlines was in just such a corner in 2012 when its home patch was invaded by low-cost airlines.
Skymark popped up in 1998 after the Japanese domestic airline industry was deregulated and set about acquiring a fleet of Boeing 767s at first and now smaller 737-800s.
But it was squeezed by the low-cost revolution as Australia’s own Jetstar invented Jetstar Japan to serve domestic routes, while other LCCs like AirAsia also briefly got into the act domestically.
While it retains the all-economy 737s to go head-to-head with the LCCs, Skymark decided to go upmarket instead of downmarket on key routes.
It has just begin introducing Airbus A330-300 widebodies with a single class – all premium economy with 97 cms (38 inches) of space per row priced below the competing Japan Airlines and All Nippon Airways business class offerings.
The 271 bums on seats per plane are enough to make money even for economy seats as other airlines, like Lufthansa, have the same aircraft configured with as few as 217 seats.
The initial reports are that Skymark’s A330 services on key routes like Tokyo-Sapporo and Tokyo-Fukuoka are struggling, with planes diverted to fly to nearby holiday destinations like Guam, but the airline is committed to the concept and plans an international expansion.
In August, Skymark will take delivery of the first of four Airbus A380 superjumbos it plans to fly to international destinations including London, Paris, Frankfurt and New York. Sadly no mention of Sydney or Melbourne.
The A380s will have 114 almost-lie-flat business class bed seats of 152 cms (60 inches) per seat row upstairs, and the entire downstairs devoted to 280 premium economy seats.
That’s a total of 394 seats per plane when most airlines have 480 to 520 seats.
Industry analysts are anything but bullish about the Skymark corporate plan, but once again the airline business is willing to try things that less innovating industries would shy away from.
If the idea clicks with high-end consumers, we may just see those all-premium jumbos down under.
Have you flown JetBlue in the US? How did it stack up against Australia’s airline offerings? Have you taken a ride on Skymark in Japan? Are there other carriers you’ve tried that you rate as exceptional? Would you like to see other airlines offer only premium economy and business on planes?