In May 2022 the respected airline Emirates launched its new cabin class, the new Premium Economy. It is nothing new in the business as other airlines, including direct competitors to Emirates like Singapore Airlines, have had a class with the same name for quite some time. It can be argued that this is actually becoming somewhat of an industry standard for mostly higher positioned airlines. It seems logical that the introduction of such a class is an attempt by airlines to achieve the following goals:
- Target travelers who are not rich enough to afford full First Class experience but can splurge a bit more money on a better experience than Economy.
- Create an aspiration for people to move upwards in classes by giving them a “sniff” of what First Class must be like.
- Position clearly Economy as the cheapest way to fly for cost-conscious travelers.
Creating more options for customers is always an admirable thing and should work well for the company if it does not lead to cannibalization of profits and, most importantly, is not confusing to the customers and therefore does not lead to a damage of the brand identity. And here details in name selection and the way it is communicated matter indeed. Look at the advertising I was served by Facebook for the new Emirates Premium Economy class.
One can argue that adding the adjective Premium to Economy is (kind of) fine as it implies a step above Economy by adding premium features. Advertising it, however, as Luxe Premium Economy is, mildly speaking, confusing to customers. If I can fly deluxe in Economy, why should I pay for First Class? The combination of the words Luxe and Economy is a curious example of a Marketing cognitive dissonance. It also smells of indecisiveness on the part of the company – “we are not brave enough to name things the way they are” – and of an attempt to present things for what they are not. Of course, it also depends on what the real advantages of Premium Economy compared to “true” Economy class are and how are they executed in reality. The advantages to pure Economy, according to this Emirates promotional video, are:
- More hand luggage
- Possibility to choose seats for free
- Welcome drinks
- More luxurious – soft leather seats, more space and comfort
- Complimentary drinks with some special wines you do not get in Economy class
- Better meals served on linen with additional snacks
It looks nice, doesn’t it? I am also quite sure that Emirates have executed all these things quite well (I still have not had the opportunity of trying the said class). The question is, of course, can this product offering be separated sufficiently from First Class? They are offering it on long-haul flights only. Arguably on these flights such features would have more value to travelers and will be more appreciated by them.
Ultimately, I think that the introduction of the Premium Economy class will bring some additional turnover and profit for Emirates. The most interesting questions for me are how distinctive it will be in the mind of consumers and, ultimately, would it not be better to introduce a separate name, disassociated from Economy, for this class in the product paradigm following the “good – better- best” structure? This could be a much better opportunity to brand and market this class to a distinctive group of flyers. Of course, such decisions are based on deep qualitative and quantitative market research which, I am quite sure, Emirates had already performed. It will be also interesting, however, to see the impact on overall brand equity in a future study. Product name choices are never easy but they can be absolutely crucial for the success or failure of a product and in fact a whole company.