Which Seats in an Airline Makes the Most Revenue?

We all know the common seats in an aircraft: first class, business class, and economy. Right now, there’s a new trend called premium economy. Nowadays, you see airlines ditch or reduce their first class but increase premium economy. It might seem that airlines are getting stingy, but that’s not true; it always depends on the market. So why is this happening? Which seats in an airline make the most revenue?

Before we delve into that, we first have to take note that there are two types of airlines: full-service airlines and low-cost airlines. A full-service carrier, like Philippine Airlines, Emirates, Singapore Airlines, and Cathay Pacific, offers all the comfort, amenities, and entertainment on board, of course, at a higher price. On the other hand, there are low-cost airlines that usually have only one type of seat class: economy class seats all the way. These are airlines like Cebu Pacific, Ryanair, Southwest, AirAsia, and the like. There are also hybrids that offer business class but not as elaborate as those on full-service airlines. An example is AirAsia X.

So for this discussion, we will just focus on full-service carriers with economy class, premium economy, business class, and first class.

Economy Class

Economy class seats occupy the majority of space on most aircraft. These seats are relatively compact, typically occupying about 5.5 square feet per seat. The average price for an economy class ticket on long-distance flights is approximately $1,000 to $1,500. Despite the lower ticket price, the high volume of economy seats makes this class a substantial revenue generator.

Economy class passengers also incur the lowest costs for airlines. The average expense per economy passenger is around $30. This includes basic amenities and services. The profitability per square foot for economy class is about $270. While not the highest, the volume of passengers ensures steady revenue for airlines.

Premium Economy

Premium economy has emerged as a highly profitable segment for airlines. These seats offer more comfort than economy class, with better food, amenities, and slightly more space. Premium economy seats occupy more space than economy seats but significantly less than business or first class.

The average price for a premium economy ticket is higher than that of economy, but the operational costs remain relatively low. The profitability per square foot for premium economy is $322, the highest among all classes. Airlines are increasingly adding premium economy sections to their fleets to capitalize on this profitability.

Business Class

Business class seats offer significant comfort and services, including larger seats, gourmet meals, and additional amenities. These seats occupy about 20 square feet each, and the average ticket price is around $5,000 for long-distance flights. Business class generates substantial revenue due to the high ticket prices.

However, the costs associated with business class are also high. These include better food, amenity kits, and more attentive service. Despite the higher costs, business class remains highly profitable, generating about $280 per square foot. This profitability is a major reason why airlines are focusing on expanding their business class offerings.

First Class

First class offers the ultimate in airline luxury, with extensive space, premium services, and exclusive amenities. First class seats occupy more than 30 square feet each, and the average ticket price exceeds $9,000. The revenue per square foot for first class is around $302.

However, first class also incurs the highest costs for airlines. These include premium food, extensive amenity kits, and a higher ratio of flight attendants per passenger. The operational expense for first class is about $1,000 per passenger. Despite the high revenue, the profitability of first class is slightly lower than economy class, leading many airlines to reduce or eliminate first class in favor of more profitable business and premium economy seats.

Trends in Airline Seating

The trends in airline seating reflect a strategic shift towards maximizing profitability. Airlines are increasingly eliminating or reducing first class sections to expand business and premium economy classes. These changes are driven by the need to balance revenue and operational costs effectively.

PAL for example, has removed first class from some of its aircraft, focusing instead on business and premium economy. Singapore Airlines has also reduced the number of first class seats, favoring more profitable seating arrangements.

Now, it is defined that in a full-service carrier, premium economy and business class usually generate the most revenue. This is why airlines continue to enhance their business class and premium economy offerings to entice more passengers to book tickets for those seats.