And So It Begins: Emirates Unbundles Business Class

This year’s April Fools post was about Delta creating a version of “Basic Economy” in its higher cabins. At the end, I closed with “I realize this one sounds a little too real and could actually happen, but you can breathe easy for now. This isn’t real… yet.” Well, now it’s real. And I’m actually quite happy about it.

I should be clear: Delta isn’t unbundling its higher cabins… but Emirates is. Emirates has recently introduced its new “Special” fares. What’s so special about them? They are highly restricted, and they don’t come with all the usual perks.

Here’s a chart that Emirates files with Sabre that I think is correct. (Warning: It wasn’t correct originally. I had to update it to properly show upgrade ineligibility, so I’m not 100 percent confident.)

As you can see, while Emirates previously differentiated fares by awarding fewer miles and having different costs to upgrade, it didn’t actually change the product on the day of travel. That is now changing with this new “Special” fare. I’ve highlighted the lines in yellow to see the biggest changes.

  • These fares can not be upgraded to First Class using miles
  • Travelers will earn the number of miles flown with no bonus, unlike in higher classes
  • Travelers are not eligible for the car service between home/hotel and the airport
  • There is no lounge access (unless granted via elite status)
  • Seats cannot be assigned in advance, only at time of check-in

It’s not reflected here, but change fees are also higher and corporate discounts don’t apply. This truly is the first Basic Business I can remember seeing internationally.

Emirates says these fares “will be offered on certain routes based upon seasonal trends and travel demand.” The handful of markets I checked from the US don’t seem to have them filed yet. But people originating in the Middle East and flying to the US will see them. Let’s walk through an example, flying from Dubai to Seattle on October 10 and returning October 17.

Fare
Special (H class)$6,383.53
Saver (O class)$6,927.53
Flex (I class)$7,472.53
Flex Plus (C/J class)$8,561.53

From a mechanics perspective, Emirates separates these all by fare class with the new “H” bucket holding Special fares, “O” for Saver, “I” for Flex, and “C” and “J” for Flex Plus. While there was minor differentiation before, I’d imagine most people were simply buying the cheapest fare that was made available. If the Saver was there, I assume most people bought it. Maybe some needed a fully refundable fare, but that had to be a small percentage. People just paid for the cheapest thing offered since the product was nearly identical. But this new Special fare is a whole different story. There is now a significant difference between the Special fare and all the others, so Emirates has to be hoping for significant buy-up.

With benefits being cut, are fares actually going down? Yes. The lowest fare in the Dubai-Seattle market before this fare was filed on June 10 was $6,818.53. So that old Saver fare has gone up a bit, but the new Special fare is lower than the old lowest fare. I see the same trend in other markets. This makes business class more affordable (or, you know, as affordable as a $6,000+ ticket can be).

Why is Emirates doing this? I’m sure there are a few reasons, but this has to be an effort to increase revenues to help improve the airline’s financial situation. Sure, there is a cost-cutting component as well, but other than the car service, the rest of these things don’t cost much. This is about creating fences to encourage people to buy up.

Undoubtedly Emirates thinks most of its current Business passengers value the lounge, the car service, a seat assignment, and the miles so they will keep buying up. The goal must be to create a lower pricepoint that will help attract new passengers. It will also allow the airline to remain more price-competitive with other airlines that are offering cheap business class fares. I should point out that this does appear to be in Middle East to China markets as well as the US. And Chinese airlines are known to discount heavily.

Why do I like this? Because I generally don’t care about all the fluff. In fact, I wish it would go a step further and allow you to save even more money by opting out of meals — or opting into the coach meals — instead. For me, the big benefit of Business class is the seat. The rest I don’t care much about. So give me that option for less money, and I’ll be happy. The full service option will always be there for those who care.

This has worked in the coach cabin, and it’s likely to work in the premium cabin as well. Emirates took a big step, and now it’s just a matter of time until others follow.

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