I recognize that often marketing terms mean very little, and perhaps even trying to analyze them is a waste of time. However, that won’t stop me from trying. 😉
In this post:
US airline executives are obsessed with being “premium”
If you’ve been following the airline industry in the United States with any regularity, you’ve probably heard the word “premium” thrown around a lot.
Delta executives have probably been using the term the most consistently and for the longest period of time. However, in the past couple of years, it has also become United CEO Scott Kirby’s favorite term. Kirby has also claimed that there’s only room for two premium airlines in the United States (Delta and United), and that means American is cooked.
Of course American is now also trying to become more premium (whatever that means), and you also won’t find a press release from the airline that doesn’t mention that. When American recently announced it would introduce Starlink Wi-Fi, the quote from the company’s Chief Customer Officer, Heather Garboden, started with “as a premium global airline.”
I think what’s funny about this is how expectations differ. If you ask an American, odds are that they’d say that Delta is a premium airline. Meanwhile when someone comes from Asia or the Middle East and flies a carrier in the US, they often laugh at how poor quality the experience is, and find it to be anything but premium.
What actually makes an airline premium, though?
If you’re going to look in the dictionary, “premium” is defined as “something of exceptionally high quality.” I tend to agree with that. I don’t want to suggest that US carriers are just awful across the board, but does anyone really want to argue that they are really high quality on the global stage, in comparison to All Nippon Airways, Emirates, Singapore Airlines, etc.?
I mean, pick your cabin, and I think we can all agree that US carriers lag the truly premium carriers of the globe.
On US carriers in economy, you’re not served complimentary food on a transcon flight, you have to pay extra for alcohol, etc. Compare that to a flight of a similar length on Singapore Airlines, where you’d get a full meal, free alcohol, amazing service, a pillow and blanket, etc.
In business class (or domestic first class), need I even compare the experience on American, Delta, and United, to what you’d get on some top foreign airlines? And with the exception of American (lol), US carriers don’t even have international first class, the most premium experience you’ll find in commercial aviation.
So how exactly are they premium, again? Let’s look at it another way. United’s CEO seems to suggest that a premium airline is one that has decommoditizing air travel, with brand loyal customers. In other words, he wants people to be loyal to United because it offers a differentiated experience, and not because it’s the cheapest.
Okay, that sounds fair enough, but if you ask me, that seems more like it’s about being able to get customers on the loyalty program hamster wheel, rather than actually offering an experience that’s meaningfully better than the competition.
I mean, I think Marriott is the prime example of a company that manages to get people to pay more due to its loyalty program, despite quite honestly, doing a lousy job in so many ways. I mean, just go into any of these Marriott Facebook groups, and you’ll see people who act like the only hotels that exist on planet earth are Marriotts, and they’d never consider staying elsewhere. Does that make Marriott the “premium” hotel brand as well, above ones like Oetker, Rosewood, etc.?
For that matter, United has a massive global route network, so are we to believe that United considers itself to be premium when it goes head-to-head against airlines like Japan Airlines and Singapore Airlines in some markets? I just don’t buy it…
For that matter, if premium is defined as having brand loyal customers, then wouldn’t we agree that Southwest is also a premium airline? I mean, the carrier has historically done a phenomenal job decommoditizing air travel, and getting people to proactively book the airline, even when it’s not the cheapest.
Looking outside the travel industry, businesses ranging from McDonald’s to Walmart also have very loyal customers. Does that make those premium brands as well?
Bottom line
Airline executives in the United States love to talk about how their airlines are “premium.” Delta has long positioned itself as the “premium” US airline, then United tried to group itself in with Delta, and then exclude other airlines, claiming there’s no more room for premium carriers. Now American is insisting it’s premium as well.
If you travel a fair bit globally, it’s hard to think that the passenger experience offered by US carriers is premium. My thought is that an airline is premium if it delivers a superior passenger experience. However, it seems that some airline executives like to define premium as having brand loyal customers, in which case I’m not sure Delta and United are really alone.
Southwest certainly has a loyal following, and even American has a lot of loyal customers. So is premium simply an airline that makes a lot of money on its loyalty program?
What do you think? Is there any substance to these premium claims, or is it all fluff?
AA, UA, DL, AS and JetBlue all have aspects of Premium but that is limited. Most people fly in coach. Back in the early jet days coach was premium but no more.
"Are Airline Executives Just Making Stuff Up?"
Good god man, have you been asleep the past 20 years? It's called "marketing" - what we all used to call "complete bullshit". We live in the Age of Lies, brother, in case you haven't noticed...our society is drowning in a sea of disinformation, misinformation, market-speak, spin, outright lies, and complete nonsense. It's as pervasive as the air we breathe, yet far too many willing participants either do...
"Are Airline Executives Just Making Stuff Up?"
Good god man, have you been asleep the past 20 years? It's called "marketing" - what we all used to call "complete bullshit". We live in the Age of Lies, brother, in case you haven't noticed...our society is drowning in a sea of disinformation, misinformation, market-speak, spin, outright lies, and complete nonsense. It's as pervasive as the air we breathe, yet far too many willing participants either do not or can not recognize how it is everywhere, even when they're doing it themselves (a bit ironic, for a professional blogger). Yes, everybody - including airline execs - just make stuff up and speak it as easily as taking a breath, every moment of every single day.
Lies, lies, lies, all around, constantly and everywhere. It's the norm. What could possibly go wrong in a world like that?
great discussion.
in terms of "premium" the only part that US airlines are chasing is premium revenue and profits. and as much as anyone wants to believe differently, it is Delta that has done that better than any other airline not just in the US but around the world. DL manages to get people to pay more for its product regardless of whether people think they deliver or not. AA and UA want exactly what...
great discussion.
in terms of "premium" the only part that US airlines are chasing is premium revenue and profits. and as much as anyone wants to believe differently, it is Delta that has done that better than any other airline not just in the US but around the world. DL manages to get people to pay more for its product regardless of whether people think they deliver or not. AA and UA want exactly what DL has managed to achieve.
as for your comparisons in onboard service by mileage, there are a handful of countries that have domestic flights that are 2000 miles long or more - and yet that is common in the US and forms a huge part of the US air transportation system. Comparing a 2000 mile domestic flight to a 2000 mile international flight is part of why the comparison is meaningless.
also, I don't know of an international carrier that has a domestic beverage service that is as extensive as the big 3 US airlines offer including the opportunity to buy beer, wine and spirits/cocktails even on domestic flights - and included for some passengers even in coach.
US airlines are very efficient and work well considering the volume; no other country comes close to handling similar volumes as smoothly.
Unlike in many parts of the world, most if not all US airline flights are from jet bridges. I love to see planes but get so sick of climbing up and down stairs and having a half dozens steps just to get from the gate area to my seat on a plane. E. Asian airlines get it w/ US airlines but much of the world does not.
and service culture in the US is just different. Many US airline employees are pleasant and that is all I expect as an American but the expectations for service culture - which often is perceived as servitude in many parts of the world - is just not a part of US or European culture.
"Premium" is a functionally meaningless term from a B2C perspective, much like "curated", "luxury", and "elevated"
Their reference group isn't Singapore Airlines or even Aeroméxico. They're premium compared to the US low cost airlines and they theoretically aspire to be more premium than their full service domestic competition.
The facts are quite simple: When comparing any U.S. airline by World Airline Standards, NO U.S. airline can truly call itself a “Premium” airline.
One only has to read a selection of Ben’s recent reviews for confirmation. Further confirmation can be obtained by consulting any of the World Rankings chronicles.
premium means having the highest RASM/CASM. I only book the most profitable airline I can find on any given route. no exceptions