Cutting Frills

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Some first-class dropouts

When Sir Freddie Laker inaugurated his no-frills, low-fare transatlantic flights in 1977, Europe's flagship airlines viewed the enterprising Englishman with a mixture of disdain—and apprehension. Now that Laker has proved the profitability of catering to frugal flyers, some of the once haughty carriers are imitating his stripped-down style. Beginning this week, British Airways and Air France will eliminate first-class seats from all their nights within Europe. The two airlines will offer first-class service only on intercontinental trips. KLM Airlines has already eliminated the first-class section on flights between Amsterdam and London. Yet at the same tune, another carrier, Swissair, has managed to make first class pay off.

For passengers who prefer special treatment, British Airways will have a "club class" offering better meals than the standard economy food—hot steak on some flights instead of cold chicken—and free drinks. Club-class seats, though, are the same size as in the economy class. Fares will be 25% to 40% cheaper than first-class fares, but 9% to 13% costlier than economy fares. Between London and Rome, for instance, the most expensive round-trip ticket will fall from $1,180 for the old first class to $741 for club class (vs. $653 for economy). Club-class passengers will be separated from economy travelers by a portable curtain. This device enables the airline to shrink or expand the size of the club cabin according to the number of customers who wish to fly in that class.

Air France is adopting a similar plan. Roomy first-class cabins are being replaced by tighter "business-class" seating. The service will be the same as in the old first class, but the price will be 20% to 30% lower. A round-trip business-class ticket between Paris and Amsterdam will cost $263, compared with the first-class fare of $355 (economy: $232).

While Air France and British Airways are abandoning first class in Europe, Swissair has turned the plush service into a big moneymaker. Unlike most European carriers, Swissair is owned primarily by private investors rather than by the government. It is also one of the most consistently profitable international airlines (1980 earnings: $23 million). Swissair's strategy is to pamper its passengers, especially business travelers, who make up an astonishing two-thirds of its customers within Europe. First-class flyers, for example, sink into seats covered in brown leather instead of common cloth, and they can listen to music over stereo headsets rather than through plastic earplugs.

Swissair is convinced that it can continue its moneymaking ways by going after the carriage trade of air travel. Says Executive Vice President Hellmuth Scherrer: "Slashing fares, which is a precondition for attracting mass traffic, would be absolutely fatal for us. The key to our survival is cultivating customers that have the highest quality expectations." Scherrer believes that there will be enough of those flyers to keep his first-class sections full. ∎