First class travellers must be feeling pretty nervous: the world’s leading airlines are increasingly cutting back on first class space in favour of more business class and premium economy seats.

The old norm in long-haul travel – that aircraft were configured with first, business and economy – is morphing into a choice between business class, premium economy and economy on numerous routes. In many ways, premium economy has become the ‘new’ business class and business class the ‘new’ first.

But is this such bad news for passengers at the pointy end? I don’t think so.

The quality of business class products has increased dramatically in recent years, blurring the lines between business and first. Meanwhile, prices for business class fares are falling in many markets (though not so much in Australia, yet). And while first class capacity is going down, that which remains is getting better. Consumers are also benefitting from airlines finally investing more in premium economy.

Overall, the future of premium travel looks pretty bright. Here’s what I think is in store.

To begin, it’s clear that demand for first class is in decline. A procession of airlines has announced cutbacks recently, the latest being the German flag-carrier, Lufthansa, which said last week that its new Boeing 777-9 fleet will top out at business class. This puts the future of its highly-regarded first class product in serious doubt.

Lufthansa B747 first class – why choose between a seat and a bed when you can have both

In January, Singapore Airlines confirmed it will reduce the number of first class suites on its next batch of A380s. Singapore Airlines has been one of the most innovative airlines when it comes to first class, but times are tough. First class has been ditched from some new aircraft while the airline is investing in new and improved business and premium economy seats.

Singapore Airlines’ dwindling A380 first class suites

Here in Australia, Qantas announced in late-2016 that its much-hyped new Dreamliners will be geared towards premium travellers, but with no first class on offer – despite flying on lucrative long-haul routes such as London and Los Angeles. Instead, the aircraft will feature a large number of business and premium economy seats, including the next generation of Qantas’ excellent Business Suite. A new premium economy seat is set to be announced in the next few months.

The Business Suite – coming soon to the Qantas Dreamliner fleet

Many other airlines in the region are making similar changes, including Cathay Pacific, Qatar Airways, Japan Airlines, Asiana and many more. The trend is clear.

So what’s driving this?

The rising quality of business class products is a huge factor. It’s becoming the norm for airlines to offer spacious seats, great on-board services and other comforts in business class that used to be more commonly seen in first class.

Qatar Airways’ award-winning A350 business class

Middle Eastern carriers deserve a lot of credit for driving big improvements in business class. Other airlines have been forced to compete – even US carriers, which have been notorious for their mediocre premium products.

Delta’s new business suite

The improvements in business class have been rapid and are set to continue, while prices on many routes have fallen, so it’s no surprise travellers are making the switch. The extra cost of flying in first class just doesn’t stack up for many.

For airlines, flying empty first class seats makes no commercial sense nor does saving them for passengers upgrading from business class. Airlines have to maximise the yield from every square inch on board, especially as the focus shifts towards operating smaller aircraft on long-haul routes.

Further down the plane, premium economy has come into its own over the last few years. Despite being around for over two decades, many airlines only recently committed properly to premium economy. Singapore Airlines, for example, only started offering premium economy in 2015.

Singapore Airlines A350 premium economy

Premium economy taps into the market for an affordable, low-frills service that’s still a clear step-up from economy. This suits both travellers switching from business class due to reduced travel budgets and those moving up from economy because a better in-flight experience is now in reach.

Cathay Pacific premium economy

It seems clear premium economy and business class will continue to boom. But what does the future hold for first class?

I think premium airlines will continue to offer first class on select routes, such as those connecting the world’s major capitals. Demand hasn’t completely dried up for the luxury and privacy only first class can provide.

While capacity is going down, the quality of what’s left is going up. Etihad has set a new standard in first class with its opulent ‘Residence’, which offers three ‘rooms’ and a butler service. Etihad’s ‘regular’ first class suites are also wonderful.

Etihad does first class luxury like no one else

Other airlines are responding. Singapore Airlines recently announced it will install larger first class suites, while Emirates’ CEO has said the airline will soon begin offering “fully enclosed rooms with all the touches and amenities that you’d expect in hotel or a private bedroom on a luxury yacht”.

For travellers who use points to fly first class, the key takeaway is this: the reduced capacity will almost certainly make it harder to secure award seats in the coming years. If you’ve never experienced first class and that’s your goal, I suggest you don’t delay.

For regular first class travellers, the quality of business class today means most of the comforts you’re used to will be available if you have to switch – and you’ll probably save money.

For everybody else, I think we’re in a golden age of premium travel – and the future looks bright.

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Just yesterday I published my review of business class in a Qantas A380, noting that I enjoyed the experience but there were some major issues with the seat. I finished by saying that “hopefully the Qantas A380 fleet will soon be refurbished”.

Well, wouldn’t you know it, AusBT is reporting today that Qantas may soon do just that. According to today’s article (which is probably well-sourced) Qantas is planning an extensive A380 refurbishment program beginning as early as 2018 to sharpen its competitive edge.

Several problems I pointed out in my post yesterday look like they’re being targeted, including the lack of personal storage space, mediocre entertainment screen and outdated 2-2-2 cabin layout.

Current Qantas A380 business class seats

It seems likely that the latest generation of Qantas’ highly-regarded ‘Business Suites’ will be fitted onto the superjumbos. I recently reviewed the business suite and concluded it was a great product – spacious and comfortable, with a 1-2-1 layout, lots of personal storage space and an excellent 16-inch entertainment screen.

The Qantas Business Suite, currently only on the A330s

The Qantas Business Suite – coming soon to A380s?

Qantas is currently making minor tweaks to the business suite before it’s installed on the airline’s forthcoming B787 Dreamliners. It makes sense to also refit the A380s with this high quality product.

The upgrade – if it happens – will be great news for loyal Qantas customers and those with no other options on some routes, like Dallas. It will also help Qantas compete with superior business class products currently offered by Emirates, Singapore Airlines, Cathay Pacific, Virgin Australia and others.

It seems likely that Qantas will also upgrade first class and premium economy seats on the A380s. Hopefully we’ll get official confirmation and more details in the next few months!

From 20 February 2017, Qantas will be charging customers a lot more to upgrade their flights using Qantas Points. The increase was announced late last year but Qantas gave passengers a few months’ reprieve before the changes took effect.

The cost is going up for both international and domestic upgrades across most routes and cabins. This affects ‘Classic Upgrade Rewards’ – i.e. using points to upgrade a paid fare to a higher class of service.

The cost is rising by as much as 25%. I won’t list all the changes but you can see a good summary of them in this article at AusBT.

I do want to point out that some passengers can lock in the current, lower price. Basically, you can lock in the current price if Qantas confirms your upgrade before 20 February.

Unfortunately, that will exclude most international flights after 20 February, as upgrade requests for international flights are usually processed very close to the flight date. If you’re flying overseas after 20 February, you’ll probably have to pay the higher rate.

However, for domestic flights, you can confirm an upgrade from economy to business class right now if there is an award seat available on your flight. It’s simple to check if there’s one available – just do a new fare search on the day and route you’re flying and if it shows that a “Business Classic Reward” is available on your flight, you can upgrade immediately (just go to “Manage Booking”).

If there are no award seats available, then you can still request an upgrade, but it’ll probably be confirmed after 20 February and be subject to the new prices.

It’s a shame Qantas is increasing prices across so many routes, but perhaps it’s not surprising given the rise in demand for award seats and upgrades. There’s been a huge increase in the number of people earning points, not to mention all the new ways to earn points – from banking to shopping to insurance.

I still think upgrades represent good value in many cases. For example, I love to upgrade from economy to business class on A330 flights from the east coast to Perth. These planes feature the awesome ‘business suites’, which I’ve reviewed here. The cost of this upgrade is rising from 20,000 points to 25,000 points but I think it’s still worth it for a great experience on a 4+ hour flight.