Prior to COVID-19, the last major downturn to hit the aviation industry was the Global Financial Crisis (GFC). Following this event, fewer people were choosing to spend money on travel. Crucially, for airlines, many business travellers were also no longer buying profitable Business or First Class tickets.

There’s no doubt that the COVID-19 pandemic has been a far worse crisis for global airlines overall than the GFC, or even 9/11. Countries slammed their borders shut and demand was reduced to a sliver of usual levels. Most business travel ceased completely and much of it still hasn’t returned. But as the industry recovers, there is a silver lining for airlines.

The GFC decimated demand for Business & First Class travel

During the GFC, there was a particularly sharp drop in demand for travel in premium aircraft cabins. Businesses everywhere were cutting costs, and travel budgets were one of the first casualties. Where work travel wasn’t cancelled completely, many businesses began asking their high-flying employees to travel in Economy instead of up the front of the plane.

Meanwhile, due to the economic downturn, many leisure travellers were being more careful with their disposable income. They became less inclined to splurge on an expensive holiday.

All of a sudden, airlines everywhere were operating long-haul flights with near-empty Business and First cabins.

Some airlines responded by reconfiguring their aircraft to better match the new levels of demand, ripping out Business Class seats and in some cases even removing First Class entirely.

Of course, reconfiguring aircraft cabins takes time. So Qantas responded immediately by selling some of its long-haul Business seats as Economy Class. This was seen as the most efficient way to utilise these empty seats at that time, since Qantas was still seeing at least a reasonable demand for long-haul Economy tickets.

The pandemic rebound is the exact opposite

As the aviation industry recovers from the COVID-19 shutdown, the exact opposite is happening. On many international flights, airlines are easily filling their premium cabins with paying customers while Economy Class remains half-empty.

When I flew to Europe last month, both my flights from Australia to Singapore and Singapore to Europe were near-full in First and Business Class. But Economy Class on both sectors was mostly empty.

This wasn’t a fluke – there has been a similar, consistent pattern across many long-haul routes and airlines over recent months.

For example, today’s Qantas A380 flight from Sydney to Los Angeles is full in Business and close to full in First & Premium Economy. But Economy is only a tad over half-full.

Next Saturday, every flight from Sydney to Los Angeles on every airline is already sold out in First & Business Class! But there are still plenty of Economy seats available for sale.

That’s not to say airlines aren’t filling Economy Class on some flights. For example, both of today’s Qantas flights from Sydney & Melbourne to London will be close to full in all cabins. But in general, the premium cabins have been filling up more easily.

Even when airlines don’t sell every seat in Business Class, there are often plenty of passengers lined up to redeem their points or pay cash for an upgrade. But with fewer empty seats available, getting an upgrade or finding reward availability is becoming harder.

The COVID-19 crisis is different

This phenomena is interesting because, like in the aftermath the GFC, business travel has been very slow to rebound. Despite this, demand for premium cabin travel is now very high.

In the months since Australia’s international border reopened, the majority of people travelling overseas have been visiting friends and relatives. There have also been some brave tourists and a smaller-than-usual number of businesspeople travelling. Either way, most people are currently flying for leisure and paying for their own tickets.

Unlike during the GFC, however, many of the people travelling at the moment have money to spend that they’ve saved during the pandemic. They also don’t want to spend a long flight in a crowded Economy cabin while COVID-19 remains a risk, and they’re prepared to pay more to avoid this. Ironically, since everyone is doing this, the premium cabins are now often the most full.

This situation won’t last forever. Airlines will eventually need business travellers to return to the skies in order to recover financially. But for now, leisure travellers are making up for their absence.

You can leave a comment or discuss this topic on the Australian Frequent Flyer forum.

Matt Graham

The editor of Australian Frequent Flyer, Matt's passion for travel has taken him to over 90 countries… with the help of frequent flyer points, of course!
Matt's favourite destinations (so far) are Germany, Brazil & Kazakhstan. His interests include aviation, economics & foreign languages, and he has a soft spot for good food and red wine.

You can connect with Matt by posting on the Australian Frequent Flyer community forum and tagging @AFF Editor.