Malaysia Airlines Drops First Class In Favor Of “Business Suites”

This sure is a strange move. Malaysia Airlines presently has first class on 12 aircraft, including six Airbus A350s and six Airbus A380s.

Their A380s each have eight first class seats, spread across two rows in a 1-2-1 configuration.

Meanwhile their A350s each have four first class seats, spread across a single row in a 1-2-1 configuration.

Well, Malaysia Airlines has revealed that they’re dropping first class throughout their fleet… sort of… but not really.

Malaysia Airlines rebrands “first class” as “business suites”

As of December 12, 2018, Malaysia Airlines is rebranding their first class as business suites. This applies to both their A350s and A380s.

So, what’s changing when it comes to the passenger experience? Absolutely nothing. Malaysia Airlines says they’ll maintain exactly the same service, food, drinks, lounge access, and everything else as they currently have. Literally nothing is changing… other than the name.

Why is Malaysia Airlines eliminating first class (in name)?

Malaysia Airlines’ logic here is truly bizarre. Malaysia Airlines’ head of customer experience tells AusBT the following:

“We realise that with the recent economic situation a lot pf people have moved away from first class, and a lot of corporate passengers now have the limitation of not flying first class (due to) corporate policy, so we want to cater to that market and open it up.”

So essentially it sounds like they’re trying to do this to allow travelers to trick their corporate travel policies. But here’s the thing — Malaysia Airlines will continue to use first class fare codes for business suites, which includes F, A, and P.

Apparently Malaysia Airlines plans to lower the price of first class with this rebranding as well. The price for the new business suites will allegedly be about halfway between their current first class fares and current business class fares.

What does make sense…

The truth is that there’s not really sufficient demand for Malaysia Airlines to have first class. Business class on Malaysia’s longhaul flights is often sold out, and that’s largely because they have very attractive fares. However, first class is pretty consistently empty, in my experience.

There’s no denying that the airline should get more creative with trying to upsell to first class for a reasonable premium. However, I’m not sure why that needed to come in the form of rebranding the cabin as business suites.

Bigger picture, Malaysia’s markets just don’t seem to have a need for first class, given that it’s not selling. Yet they still took delivery of A350s with first class. My guess is that this may have been more due to government demands than anything else, though.

Bottom line

Malaysia Airlines’ logic for rebranding first class as business suites is bizarre. Are they really encouraging corporate travelers who aren’t allowed to book first class to try and deceive their company with this, even though the product will continue to book into the “F” fare class?

This also creates a lot of confusion when it comes to branding. Will the Malaysia Airlines first class lounge in Kuala Lumpur be renamed the Malaysia Airlines business suites lounge?

This solution is certainly attempting to address an issue the airline has, which is that they’re not selling first class well. However, I don’t feel like this will make it better.

What do you make of Malaysia rebranding first class as business suites?

Comments

  1. Lucky, I think you underestimate the change in name to business class. The same move was done by all Mainland Chinese Airlines to adapt to stricter compliance regulation from the state owned companies, because many executives were forbidden to fly first class.

  2. I don’t think this bizarre. It has to do with corporate policy, as others (including yourself) have pointed out. It’s the same reason why premium economy has became so popular in recent years: many corporations no longer allowed people to travel in business class, but any class with “economy” in the name is ok.

  3. Bet it has to do with government’s directive. No first class flights allowed hence rename to not first class while maintaining the perks. Hoping that I’m wrong

  4. This makes perfect sense to me! Aside from corporate policies – there is one key change and that is price! So essentially, they are lowering the price to make it more attractive, but also, I imagine, make the fares more searchable! Unless you’re connecting between A350s and A380s, you can’t get a through fare in First class anyway. This may make the mixing better and more visibility on search engines! What would be interesting to know is if Business Plus will be available for redemption and how that will work!

  5. To some degree, I actually think this move will work. Even if Malaysia Airlines continues to use the First Class codes, I think at least some business travelers would be able to “get away with” booking these seats as acceptable business class seats. It all likely depends on how their respective company reconciles the expense. The company I work for (for example) doesn’t look at the fare code, they only look at the class of service listed on the confirmation/ticket. My work travels will likely never be in a city where I could actually fly with Malaysia Airlines (unless I went way out of the way) so I likely won’t ever see this particular service.

    From the Malaysia Airlines business perspective, I think it’s worth a shot. If their business class cabin is full with mostly business travelers, but they’re flying empty up front, they should do something different to change it. They could cut first class fares, but that, in and of itself likely has little impact. Most companies aren’t paying for international first class travel, and most travelers (with the exception of miles/points folks and the uber wealthy) aren’t looking to book that class of service either. I wouldn’t consider the move bizarre per se, I think it’s a calculated business decision. I’m really curious if the move is successful.

    It’s a really interesting move to me because it’s opposite from what other airlines typically do. Take Delta for example, they like to package what other airlines already offer and pretend it’s something new and better than their competitors. They branded what every other airline calls Premium Economy, and called it Premium Select. Same service, a little fancier name. I don’t blame them for it, from a pure business perspective, he they make boat loads of money these days, which is why I’m really curious if this alternate strategy with MH will work.

  6. I have 3 award seats booked in MH first through Cathay‘s Asia miles for January. Wonder if I get some miles refunded once we fly downgraded to business suites…

  7. The reasons are the same as the up-fares introduced in US long time ago. You book a coach ticket and get instantly upgraded to F.
    Now the tendency is to eliminate F altogether but make J better than old F. Then an airline introduces PE. If they improve PE seat and service, will be getting
    J= upgraded old F
    PE = downgraded old J
    and a downgraded Y.
    Same three classes. Nothing new, folks.

  8. Government employees are not allowed to fly First class but, above a certain rank, can fly business class. I’ll bet this is being done to tap that market without having to reduce prices.

  9. I think this makes a lot of sense. Again the people that create corporate policy dont understand the airline industry. If Etihad renamed their Residence Business Residence, I could book that and wouldn’t even need a receipt!

  10. Agree with the other commentators that this is more logical than lucky suggests. I think the issue is that lucky has not really worked in a traditional corporate environment so can’t understand how a bureaucracy like that works. An employee doesn’t have to “deceive” or “defraud” their employer. At many places the rules is no first class unless business is unavailable — because they don’t want the perception that employees are wasting clients’ or customers’ money on luxury but are merely making prudent purchases that facilitate business like “business class” seats. It’s all about perception. So if it’s marketed as business, at a lot of places that would be OK, even if the employer was told there are two kinds of business class on that flight and this is the higher one.

    At many places however it would *NOT* be OK because employees would be expected to book the least expensive business class nonstop option (or they could buy a more expensive if it was only a few hundred more). Presumably this will still be a big premium over regular business so many companies wouldn’t allow it on that basis.

    I don’t see lucky’s point the fare codes. Sure by convention F, A are generally used for the highest cabin in a plane but every airline does it differently. I doubt any corporate travel policy will be based on the fare code. They’ll look at how the flights are marketed.

  11. At the end of the day I’m not going to complain if they sell F, P and A inventory at a cheaper price. It still means significantly more TPs at a lower $/TP rate.

  12. This makes sense to me. And they’re smart to not change any of the actual planes. If they decide they want to have First Class again all they have to do is change the name and offer extra “perks”.

  13. How do you think premium economy was born?
    Tricking corporate travel policy is a bit of a strong use of terminology. I often pay the difference to either upgrade my ticket or travel experience. No tricking there. Some of us have to fly for work to some pretty dull destinations or spend 24 hours in destination, and the luxury of swanning around playboy resorts ‘tricking’ credit card or airline redemption opportunities for hedonism is not really an option when you have a family of four and can’t have access to a US credit card.
    I applaud MH and hope other second tier airlines follow.

  14. I think it is only a matter of time before these 2 classes merge across the board especially with the revised ‘sophistication’ of premium economy being another option. With some carriers, first & business are now almost identical except for the soft product. I travel j/c a lot & have noticed many times (more so recently) that p/c cabins are almost empty (with commercial pax anyway) so it makes sense to create a product half way in between. And with a revised price structure, I’m sure the airlines will profit handsomely by the change…

  15. Just an update to this: I’m the author of the original article at Australian Business Traveller [https://www.ausbt.com.au/malaysia-airlines-drops-first-class-rebrands-it-as-business-suites] and MH has corrected its info on lounge access – the exec I interviewed for the article has emailed me overnight to say that she was mistaken about partner lounge access. Business Suites passengers will *not* have access to Oneworld partner first class lounges (eg QF F SYD), only to the MH First Class lounges (which are losing the First Class brand and being renamed as Platinum lounges).

  16. This is a smart move. I would have no problem to have this booked by my company.
    Companies do not look at fare codes but at the class description.

  17. Lucky, corporates tend to look at what the travel agents invoice shows.

    Our travel agents’ (a global player) invoices – oddly – tend to go with with fare class codes – which has some strage effects: For instance LOT (LO) uses F for their cheapest Business fares – with to consequence we have to book some more expensive fares, because the travel agents’ invoice for LO F Business Class will show First Class, which is not permitted in any case. The opposite occurs with TK – the invoice for K class shows Economy, although it is a Business fare … with the consequence that some staff in other divisions started booking it even on trips they are not entitled to Business Class … and my staff moans that their boss being too knowledgable …

    Therefore I suspect that MH will not be able to attract too many more customers for Business Suites, as long as they carry F fare codes … Cerainly my staff (including myself!) will not be able to book Business Suites.

  18. The MH A380 have mostly been pulled of regular, scheduled service, leaving 6 A350 with a grand total of 24 First class seats.
    It makes no sense to incur the cost of maintaining separate First branding for that little volume.
    And the people most benefiting from this will be government employees who can now enjoy them – makes sense for a government controlled airline…
    Most people who fly First for business/leisure in the region fly SQ anyway….

  19. Fewer and fewer airlines are offering first class. It is dying. We are moving to two broad service categories – economy/coach and business.

    But, economy now supports a range of value propositions from basic economy right up to premium economy which offers more personal space. It would be naive not to expect business class to likewise evolve and, as the analogue to premium economy at the top end, I think Malaysian are prescient in recognising business suites. They can clearly be marketed as offering more privacy on board for executives working with sensitive materials. I don’t think that is deceiving employers. I can see a genuine business need/advantage for greater privacy – as a business you don’t want your executive’s seat mate to read the urgent email s/he receives about a pending acquisition for example. Wi-Fi on planes, and the implications that sensitive emails might arrive at any time, is a driver for change.

  20. Sensible and innovative. Perhaps an idea other airlines might follow to offer greater customer choice at a more value driven price and crucially increase passenger numbers. Bit like what premium economy has done!

Leave a Reply

Your email address will not be published. Required fields are marked *