There’s a scene I recall from The Aviator, the depiction of Howard Hughes – the aviation and film magnate and legendary leader of now defunct Trans World Airlines (TWA). In the scene, Hughes and his President, Jack Frye, are having dinner at a swanky club when their arch rival, Juan Trippe, the founder and leader of Pan American World Airways (also now defunct), walks up and joins them at the table. The conversation becomes competitive, and Trippe reminds Hughes that TWA recruited a top interior designer away from Pan Am. Trippe, fishing for some inside information, asks Hughes what his interior colors are. Hughes defers and retorts, “Do you have buttons or zippers [on the sleeping berth curtains]?”. Trippe stumbles and isn’t sure himself about his airline’s own product.
Buttons and zippers are probably not hot topics among product development teams at airlines today, but the interiors sector remains a battleground for differentiation. Lie-flat seats, in-flight entertainment, Wi-fi, other amenities, and overall configuration of the cabin are key points of differentiation and have become pillars of recent marketing efforts. After all, the aircraft model that passengers fly on is rarely what they care about; rather, the interior is what they see, experience, and remember. It’s the front line for winning over customers.
The seat is the most significant aspect of the interior, and not surprisingly receives most of the attention and investment. On long-haul fleets, the forward-facing reclining seats are a thing of the past as most carriers have embraced lie-flat seating in their premium cabins. However, lie-flat technology is not the only point of differentiation – real estate in aircraft cabins is very expensive, so space most be allocated the most cost effective way possible. In fact, there are about nineteen different seat configurations to consider when designing a cabin layout, as documented by Runway Girl Network. In the economy cabin, airlines are incorporating thinner slimline seats to save space while claiming to maintain legroom. More seats across the cabin are also an option, but typically at the expense of seat width and passenger comfort.
Airline product teams must consider the impact of each of the potential layouts on customer satisfaction, total cost per available seat-mile, overlap with competitor products, and more. Being long-term investments, getting the configuration right is absolutely critical since it defines the operating economics of the aircraft for years at a time. Some of the questions teams might ask themselves include: lie-flat or angled business class seats? Should there be a first class, in addition to business class? What about direct-aisle access or having to climb over neighbors? Do passengers prefer facing the window or aisle? Which provides more privacy? What’s the revenue potential of each configuration? What is the cost penalty for each configuration? See this video from American Airlines to get an inside look at the level of detail considered.
For example, Air Canada has arguably the most efficient three-class layout for the 777-300ER (counting premium economy as a different class). By re-arranging business class from a herringbone layout to a staggered arrangement, the airline decreased the number of business seats from 42 to 36, but increased overall capacity by 30% by reducing the size of the business cabin, adding economy seats in the saved space, and densifying the economy cabin from nine-across to ten-across. That means that the aircraft has 458 total seats, up from 349. That also means that the carrier’s 777-300ER is comparable to the larger Boeing 747-8 in terms of capacity, which has a typical 3-class layout of 467 seats. With this refurbishment, the impact on the bottom line is significant: a 21% savings in cost per available seat-mile.
Aside from seats, cabin amenities have become increasingly popular. Among North American carriers, Wi-Fi access is almost standard. Even on over-water international flights, airlines are outfitting their aircraft with satellite-based wi-fi. For larger network carriers, in-seat personal entertainment systems are more commonplace, although carriers are evaluating replacing those heavy systems with streaming solutions for passengers to use with their own devices. But again, simply providing these products does not check the box. Some airlines have segmented their customers into who receives free content versus who must pay (e.g. business and economy plus passengers receive free entertainment, while “basic” economy passengers pay for all content). On the other hand, Delta, is asserting that, “customers flying on Delta receive more free entertainment than any other carrier.”
Key to all of these interior investments is predictability and time required to refurbish aircraft. If an airline makes assertions in its marketing campaigns about interior investments, customers predict that those amenities will be available on those flights. For example, when carriers advertise lie-flat business class service on transcontinental flights, but must make a substitution under exceptional circumstances with an aircraft that does not have those amenities, airlines risk alienating high-value and loyal customers.
Furthermore, the start-up period for a new interior can be challenging, as airlines must incorporate new amenities as fast as possible. Some airlines wait until scheduled maintenance checks to completely refurbish interiors, although the turnaround times for those checks can last up to six weeks, which can make a consistent product take a long time to develop. However, some amenities can be installed overnight while an aircraft is sitting at an airport, as I learned about Delta’s ground-based wi-fi system during a tour at their Detroit line maintenance hangar. With each day that a widebody jet is out of service, a typical airline will miss out on about $200,000 in revenue opportunity, thus turnaround time is paramount.
As long as airline profitability continues and discretionary spend is available, I would expect more investments in interiors and amenities in the years to come. Interior products are already surpassing quality of offerings from just ten years ago, and with fewer competitors as a result of consolidation, airlines will also be able to tailor their offerings to stand out more easily.