Abu Dhabi-based Etihad Airways has a small fleet of Airbus A380s, which have The Residence, arguably the most exclusive product in commercial aviation. This is a three-room suite with a living room, bedroom, and private bathroom with shower, and it’s an experience I recently reviewed.
Ever since these planes were reactivated in 2023, after initially being grounded during the pandemic, monetization has worked differently than before. Well, in recent weeks it looks like Etihad has hugely increased the cost to upgrade to The Residence across the board, with upgrades costing up to twice as much as before.
Etihad massively increases cost of The Residence upgrades
Back in the day, Etihad sold The Residence as a completely separate class of service, with no ability to upgrade. Tickets typically cost $25K+ one-way, and included butler service, and a completely differentiated soft product.
Nowadays monetization works differently. If you are booked in first class (marketed as First Class Apartments on the A380), you can pay a fee to upgrade to The Residence. It doesn’t matter if you paid cash or redeemed miles, as long as the ticket is issued by Etihad, rather than through a partner airline.
Upgrades can be purchased either at the time of booking, or any time leading up to departure, pending availability. The cost to upgrade is also the same, regardless of whether you’re one or two travelers.
Anyway, in recent weeks, Etihad seems to have significantly increased the cost to upgrade to The Residence. Just to compare some of the before and after pricing:
- Between Abu Dhabi and Paris, an upgrade from first class to The Residence now costs AED 11,720 ($3,191 USD), compared to the previous cost of AED 5,840 ($1,590 USD), a 100% increase
- Between Abu Dhabi and London, an upgrade from first class to The Residence now costs AED 13,190 ($3,591), compared to the previous cost of AED 8,780 ($2,391), a 50% increase
- Between Abu Dhabi and Toronto, an upgrade from first class to The Residence now costs AED 20,170 ($5,491 USD), compared to the previous cost of AED 11,720 ($3,191 USD), a 72% increase
The one thing I find kind of illogical about the pricing for The Residence is that the upgrade cost is the same for one or two passengers. You’d think that there would be a discount if you’re upgrading two passengers rather than one, since you’re opening up an additional first class seat that can be resold. It’s not like there are many incremental costs to that second passenger.
If you’re traveling as a pair and want to upgrade, it almost seems like you’d be better off just upgrading one person, so that you have an extra first class suite as well. Logically, you’d think the airline would almost let two paid first class passengers simply assign The Residence, since it seems like a win-win.
At these prices, it’s harder to justify the upgrade
It goes without saying that nobody “needs” to fly The Residence. Even if you’re very wealthy or a senior executive at a company, Etihad’s A380 first class is already excellent, and gives you a large suite with a sliding door.
As I see it, you fly The Residence for one of two reasons:
- For the novelty, given that this really is a very exclusive and unique product
- Because money is no object, and you just want the best, regardless of the cost
I suppose for the latter category, nothing has changed, and perhaps the lack of price sensitivity among those customers is why Etihad has decided to increase prices by so much.
However, for the person who flew The Residence for the novelty, I think the pricing has gone from being a “splurge” that can sort of be justified, to something that’s legitimately very expensive. Etihad completely differentiates The Residence ground experience, and there are some minor differences to the onboard soft product. But ultimately what you’re paying for is the added space.
Either way, I suppose all of this is still way cheaper than The Residence was back in the day, when it was a separate cabin, and cost exponentially more than the standard first class. Either way, I’m happy I had the chance to fly The Residence last year at the old prices, because I don’t think I’d spend the money with the new pricing.
It’ll be interesting to see if Etihad maintains this pricing, or if it sees a big drop in demand. I wouldn’t be surprised to see prices decrease once again.
Bottom line
Etihad Airways operates a small fleet of Airbus A380s, which have The Residence, a private three-room suite with a living room, bedroom, and bathroom. For the past few years, the way to book this has been to ticket a first class reservation directly through Etihad, and then you could upgrade for a fixed cost.
While that continues to be the case, the cost to upgrade has increased by 50-100%. An upgrade from Abu Dhabi to Paris used to cost $1,590, while now it costs $3,191. Meanwhile an upgrade from Abu Dhabi to Toronto used to cost $3,191, and now costs $5,491. I think it’s much harder to make the math on this splurge work at the new pricing…
What do you make of Etihad increase the cost of upgrades to The Residence?
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