Passengers deplane through the business class seating area on an American Airlines flight, London Heathrow Airport, Aug. 14, 2018.
Jeff Greenberg | Universal Images Group | Getty Images
Cheap seats aren’t enough for airline passengers anymore.
Since the pandemic, travelers have shown airlines that they’re willing to pay up to sit at the relatively spacious front of the cabin. That means that many of the seats are already full, so it’s harder for frequent flyers to score free upgrades to the front of the airplane.
And the ranks of frequent flyers with elite status are swelling all the way from the airport lounge to the packed first boarding group, meaning more competition for those seats. Expect even more crowds during the year-end holiday period, which airlines predict will set another record.
Even in the off-season in early 2025, executives have been forecasting strong demand. U.S. airlines’ capacity in the first quarter will be up about 1% from a year earlier, according to aviation data firm Cirium.
“We’re seeing probably our best unit revenues on the transatlantic [routes], for example, in the dead of winter,” said Delta Air Lines President Glen Hauenstein at an investor day in November.
The price difference between first class and coach varies, of course, based on distance, demand, time of year and even time of day. For example, a round-trip ticket on United Airlines from its hub in Newark, New Jersey, to Los Angeles International Airport during the first week of February was $347 in standard economy and $1,791 in the carrier’s Polaris cabin, which features lie-flat seats, but not access to the international business-class lounge.
American Airlines‘ nonstop flight from New York to Paris during Easter week 2025 was $1,104 in coach and $3,038 in the airline’s Flagship Business class.
A view from the Delta Sky Club at Los Angeles International Airport, Sept. 2, 2022.
AaronP | Bauer-Griffin | GC Images | Getty Images
Billions of dollars in revenue that keeps airlines afloat hangs in the balance. Airlines’ loyalty programs are a cash cow, and getting the balance right between perks such as free upgrades and bringing in cash is key.
In recent years, airlines have changed the requirements to earn status, rewarding spending and not just the distance flown. They’ve also raised the amount flyers need to spend to be anointed with elite status. Next year, customers will have to spend more on United to earn status. On Thursday, however, American said it would keep its requirements the same for the next earning year, which begins in March.
From giveaways to paying up
About 15 years ago, travelers were paying for seats in just 12% of Delta’s domestic first class. Now, that is closer to 75% and climbing, Hauenstein told investors last month.
“We gave them away based on a frequent flyer system,” Hauenstein said about first-class seats in 2010 and earlier. “The incentive was to spend as least as possible, fly as long as possible and get upgraded as often as possible. That led to a position where our most valued products were the biggest loss leaders.”
That’s now reversed for Delta, he said, as more money is going to the front of the cabin. The carrier generates 43% of its revenue from main cabin economy tickets, down from a 60% share in 2010.
The trend is cutting across the industry, from Delta, the most profitable carrier, to discounters such as Frontier Airlines, which is adding roomier first-class seats to the front of its Airbus fleet in 2025. On Wednesday, JetBlue Airways said it would introduce two or three rows of domestic business class on planes that don’t have its highest tier Mint business class with lie-flat seats, dubbing it “junior Mint.”
A day earlier Alaska Airlines announced it would retrofit some of its planes with premium seats as it readies new international flights after acquiring Hawaiian Airlines earlier this year, with revenue from higher price seats outpacing standard economy
“You see the Airbus 330s and the Boeing 787s are under-indexed in business class and lack an international premium economy cabin,” Andrew Harrison, Alaska’s commercial chief, said at an investor day in New York on Tuesday. “So we expect that beyond 2027, you will see our premium mix continue to grow.”
A Delta Sky Club passenger lounge inside the Hartsfield-Jackson Atlanta International Airport, Sept. 5, 2019.
Jeff Greenberg | Universal Images Group | Getty Images
Bigger business
Airlines are now racing to add first-class sections or bigger international business classes featuring bigger screens and closing doors to the flatbed seats.
“We’ve seen more paid demand for premium cabin than we ever did pre-pandemic,” said Scott Chandler, vice president of revenue management at American Airlines. “More people want the experience of the premium cabin.”
Chandler said American has worked over the past few years to make it easier for customers to buy up to pricier cabins, with post-purchase options to upgrade to first class or other cabins such as premium economy.
Read more CNBC airline news
American is retrofitting some of its longer range aircraft to include more premium seating, like other carriers, ditch first class entirely on some to add larger international business class cabins that will have new seats with sliding doors. Delta and United have also increased their premium offerings to keep up with customers who want to pay for the pricier seats.
“They are doing everything they possibly can to entice you to pay for their premium products. That’s absolutely what they should do,” said Henry Harteveldt, founder of travel consulting firm Atmosphere Research Group. Customers don’t buy a store-brand item at a department store and then expect “the sales person [to] ring up that product and hand you a designer bag for free.”
Southwest Airlines has taken its own approach. In 2026, it plans fly with several rows of extra-legroom seats, retrofitting its standard coach-only cabins that it has flown for more than half a century and doing away with open seating.
CEO Bob Jordan said it’s partly a “generational shift.”
“What we’re seeing is our younger customers seeking a little more premium,” he said in an interview this week. “A lot of this a mentality shift, the willingness to spend more on travel and less on other things.
But the airline decided to keep the number of seats on its aircraft largely similar and isn’t adding a first class like other carriers, after surveying customers and weighing the cost of losing space for more seats on board.
For first class, Jordan said, “You’re talking ovens, you’re talking meals, you’re talking provisioning. It’s a huge capital investment and a big leap.”
“But never say never,” he said.
