How Airlines Are Trying to Win Over Private-Jet Passengers
Air France-KLM doubles down on luxury travel amid industry uncertainty
As travel outlooks dim for many airlines, with the Dow Jones U.S. Airlines Index losing nearly one-quarter of its value this year, some carriers are trying to double down on passengers willing to pay more.
In the video above, we took a look at how airlines are prioritizing first class at a time of increasing uncertainty for the industry.
WSJ senior video journalist Michael Tabb spoke with Air France-KLM AF 0.27%increase; green up pointing triangle Chief Executive Benjamin Smith about the airline’s efforts to appeal to high-end travelers, and specifically target customers who previously flew private jets.
Here is a partial transcript of the interview, lightly edited for clarity and length.
Tabb: Who is your first-class “La Première” product for, and how much demand is there for a seat that costs at least $11,000 for a round-trip flight from New York to Paris? Particularly after you’ve invested so much in upgrading business class.
Smith: What’s increased a lot are the number of leisure customers that are looking for a luxurious experience when they fly. We’ve always had a portion of the customers that fly La Première who are not flying for business purposes that have the means and they want that kind of experience. Now we see an explosion in that. So this is replacing, also, some of the people who have actually moved down to business class because they can’t justify the cost [of first-class].
We have people that are flying because they don’t like the optics of a private jet. And then we have some people now that like the product so much that they actually buy four seats just for one person because they want to have that full privacy and they find it better than actually taking a private jet. So this is all kind of new.
Tabb: Are you actively tracking the private-jet market?
Smith: These are all new customers for us, so it’s not something we do today.
But we are getting, every week, customers that we didn’t have in the past and they’re telling us we love this product. It’s complete privacy at the airport. There’s no friction—get onboard and we have fantastic service. The seat’s great.
And it’s still much cheaper. Like, if you’re going from Los Angeles to Paris and buying four seats in La Première, it’s still significantly cheaper than taking a private plane. Now we don’t have people doing that every single day, but there are some people that actually do that. But two people wanting to come to Paris for a luxury trip, for many they actually find very good value for money.
Tabb: Do you think this boom in luxury travel spending will last? Are you concerned that, after all this investment, this could be derailed by a stuttering global economy?
Smith: I’ve been in the business 34, 35 years through many different crises and travel is one of the first things to be affected when prices go up or there’s uncertainty or there’s instability in parts of the world. What we’re seeing, though, is that luxury travel seems to be very resilient. Now, this is not huge amounts of capacity for us, but it’s a big, big investment and a big impact on our brand. So if it got to the point of not being profitable, it’s not that difficult for us to say, OK, we’re going on some airplanes to remove La Première and increase the business-class cabin size or remove business-class seats and increase the number of economy-class passengers.
But this product and investment, I think it fits our brand. I think the Paris market is extremely big. It does fit into many of the other hospitality industries that are here that have positioned themselves in that same area.
There’s a lot of people who want to travel, they’ve reprioritized it and they want to do it in comfort. So we believe it’s there to stay.