Continental Broading BusinessFirst Class Seats

Continental Airlines next month will begin revamping its BusinessFirst premium product in an effort to secure business traffic on transoceanic routes, a strategy not yet employed by any other major carrier since Sept. 11. Though some travel managers said price is the key factor in making decisions in today's environment, Continental president Larry Kellner said the improved product stacks up favorably against any competing business class currently in the skies once a traveler opts for premium over coach.

The BusinessFirst evolution, highlighted by wider seats with an array of enhancements on the long-haul Boeing 777 fleet, exemplifies Continental's philosophy on delivering a quality product and appealing to business travelers. "Business travelers have been key to Continental for a long time," Kellner said. "They generate five to seven times more yield."

In fact, the $15 million project received final board approval during a meeting on Sept. 11 as Continental's top brass pondered how to move forward. "After 9/11, other airlines were cutting costs and amenities," Kellner said. "But we had decided that we'd be smaller but still be the same airline that provides value-adds for the customer."

Northwest Airlines said that it is in the planning stages of a similar business class seat product that "will be competitive or exceed that of other airlines," said Northwest spokesperson Kurt Ebenhoch. "We're in the process of considering the different business logistics involved in deployment."

The new Continental seats, 22 inches in width, will be an inch wider than current BusinessFirst seats and the widest business class seat in the world, according to Continental. The recline will be 170 degrees, providing passengers with more than six feet of sleeping space.

Critical to Continental's design was fitting the new seats in the same space as the old seats, meaning no rows had to be removed in either the BusinessFirst nor the economy cabin.

"We looked at a lot of our competitors that were putting 60 inches between the seats and realized that on our current seat, it doesn't really do you any good. Just moving the seats further apart isn't going to make this the best product," Kellner explained. "We concluded that width is more important than length. Recline is very important, but so is sleeping on your side."

The electronically controlled seats, featuring three separate one-touch pre-set positions, are just one element of the BusinessFirst product, which also includes new privacy hoods, dual reading lights, power ports, personal entertainment systems, satellite phones, gourmet dining menus, concierge services and airport club access.

Still, product differentiation may not be the absolute answer in an economic downturn underscored by reduced corporate T&E budgets that have, in many cases, prompted further restrictions on premium class travel. One West Coast-based Continental client said product enhancement could help carriers attract high-yield customers, but added, "Price really is the biggest driver."

Even so, marketing efforts aimed at business travelers won't go away.

"Competition for the premium passenger is so important because of the high yields that small changes in the marketplace can be extremely important," said Mark Walton, principal at Consulting Strategies in Rolling Meadow, Ill. "Plenty of companies still are paying for business class. If the airlines want to increase the percentage discount to make business class more attractive on shorter routes, they can do that and the corporations will feel they got a fantastic deal."

Walton added that customer loyalty and brand recognition are key for carriers, noting that Singapore Airlines' premium class "put it on the map and kept it there."

Improvements to BusinessFirst—which was first introduced in 1993—have been on the drawing board for two years, following Continental's review of competitive first class/business class hybrids, such as Delta's BusinessElite (BTN, Feb. 22, 1999). The carrier used "focus groups of key business customers" to identify seat width and sleep comfort as the top requests from passengers.

New seat installations will begin next month and are set to be completed on the entire fleet of 18 B777s by the fourth quarter. Continental said the seats were designed to fit into B767s and B757s, though no decisions have yet been made on upgrading those airplanes.

Continental uses B777s to serve Frankfurt, Hong Kong, London Gatwick, Manchester, Paris, Tel Aviv and Tokyo Narita from its hubs in Houston and Newark. The New York area, in particular, is home to the largest concentration of Continental's corporate accounts and the largest deployment of 777s.

The carrier said BusinessFirst load factors, overall, are approaching pre-Sept. 11 levels and actually have exceeded those levels in certain markets.