SQ's premium Y seat put on stage, courtesy Australian Business Traveller

Singapore Airlines became the latest major airline to show off its new premium economy product yesterday, but what might it really mean for travellers and airline economics?

The airlines have yet to answer such questions. Cathay Pacific reduced the capacity of some of its Y+ seating recently to reflect sales results showing that while it was winning customers on longer haul routes the response had been less than expected on some important shorter to medium haul routes, like those between Hong Kong and Australia.

When Singapore Airlines starts offering the new class on flights to and from Australia from 9 August will it cause business class travellers to down trade to what looks like everything economy class used to be before it was ‘ruined’ by the higher density seating that overtook the jet age during the 80s and 90s?

It’s a highly attractive looking product from an airline with a very high reputation for its service in any class of travel.

The seats are wider, the legroom will easily accommodate legs, and the meals and drinks are generous in quantity and quality.  To mimic what you will read in the PR echo chambers, It’s a whole world of value between standard economy and business class!

But will it work? Will it slow the decline of main cabin air travel in general to the sort of miserable existence found in nine across Boeing 787 Dreamliners and ever worse nine across seating in Airbus A330s? Will it undermine the existing lucrative customer base for high quality business class products even faster than business travel managers can earn great big bonuses for themselves through the savings they achieve by changing corporate travel policies to restrict access to such excessive indulgences?

After years of hesitation, Singapore Airlines has now joined Qantas (in its A380s and its 744s), Virgin Australia (in its 777-300ERs), British Airways, Cathay Pacific,  Air New Zealand, and further afield, many other carriers in taking the premium economy plunge.

But it faces an additional dilemma. Singapore Airlines owns Scoot, a low cost subsidiary which increasingly competes directly with its full service offerings on Australian routes, with deeply discounted jammed-in-tight economy seats in 787s and a version of premium economy which at times not only sells for less than the parent company is likely to charge for the new Y+ but can compare favourably with its full service economy seats if you are looking for space more than frills.

This isn’t to suggest that there is anything wrong with the new Singaporean premium economy punt.  It could be argued to be a clever way of leveraging an overall improvement in yields in the full service operation, despite the risks it faces from passengers who increasingly choose to fly in a low cost cabin like those offered by Scoot, or Jetstar, or AirAsia X, and can find (confusingly) a different version of premium economy on each of those carriers.

Nor is Singapore Airlines retreating from the uber premium market. Having just upgraded its Boeing 777-300ERs, the airline this week confirmed that it will have all new business class seating on its new Airbus A350s and its next tranche of A380s, which will also get a new first suite product to take on the likes of Etihad and Emirates in their A380s.

For travellers, there will be more choice than ever. For airlines, these additional choices add to complexity, risk, and no small measure of brand and marketing contradictions.

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