Business Beats First Class

How Business Beats Out First Class for Airlines' Bottom Lines

If you're in coach, you're just there to fill space.

By Eric Limer

With huge, luxurious seats that cost multiple thousands of dollars, first class airline tickets must really rake in the dough, right? At prices nearly ten times as much as their coach equivalents, the profit margins are literally sky high. The answer, it turns out, is both yes and no. First class is a money maker, for sure. But when all is said and done, it's nothing compared to business class.

In a terrific overview that traces the history of commercial flight, Wendover Productions follows the interesting, strange, and circuitous progression that brought us to the in-air class system we have today. At first, there were no classes at all. Then, as a more expensive business class began to emerge, its only benefits were flexibility to buy tickets last minute and change your flights—not better seats. But, as you know, that didn't last for long.

A confluence of factors gave rise to the class system as we know it today, perhaps the most crucial being the birth of the jumbo jet, which gave airlines the space to try their hands at bigger, cushier seats instead of just packing people in.

But space is still at a premium on any flight, and what airlines slowly discovered was that the real money doesn't come from offering rich customers lavish accommodations and legroom. Instead, it comes from a more specific optimization: offering semi-rich customers (or customers on the company dime) expensive seats that are just superior enough to coach to justify a sizable jump in price, but modest enough that they can really be packed in densely.

Put simply, business class.