CEO Viewpoint: Why Premium Economy is becoming the growth engine of long-haul

Immenstaad, January 13, 2025 – Premium Economy generates the highest revenue per square meter of cabin and is thereby becoming the growth engine of long-haul. Raffael Rogg, Group CEO of ZIM Aircraft Seating Group, on this segment and on what airlines regularly underestimate in retrofit programs.

The highest revenue per square meter of cabin

Anyone looking at the economics of a long-haul cabin cannot avoid one metric: revenue per square meter. Business Class achieves the highest price per ticket but also needs the most space. Economy uses space most efficiently but achieves the lowest yield. Premium Economy sits right at the optimum and generates the highest revenue per square meter of cabin. That is why, for airlines, it is not an in-between class but a strategic decision.

Demand is growing faster than supply

What we have been observing for years: demand for Premium Economy is growing faster than the available seat supply. Travellers who used to book Economy are willing to pay for more space and more privacy. Travellers who used to book Business accept a product one step down for certain trip purposes. Both movements converge in the same cabin class, and airlines are retrofitting.

What is underestimated in retrofits

In our experience with retrofit programs, two factors are regularly underestimated: certification lead time and cabin integration. A seat is not available when it has been designed, but when it has been certified and integrated for the specific aircraft configuration. Anyone planning a retrofit program has to schedule this time backwards from the target date – not as a buffer, but as the critical path.

That is also why, three weeks ago, we announced the expansion of our Markdorf production site. In this market, capacity is not the answer to today's demand but to the programs airlines are planning for 2028 and 2029.

Conclusion

Premium Economy is the segment in which passenger comfort and economics meet most directly. For us as a seat manufacturer, that means: build lighter, use space more efficiently and certify faster. That is what we are working on at both of the group's sites.

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