Have you ever day-dreamed about flying first class and getting those precious extra inches of space? Well, how about 125 square feet of space?
Abu Dhabi-based Etihad Airways is offering what it calls the first-ever apartment cabin on an airplane, called “The Residence.” It has three rooms—a living room, bedroom and bathroom—and comes with a butler and personalized cuisine provided by an on-board chef.
Among the other amenities are a two-seat reclining leather sofa, a chilled mini-bar, two LCD TVs and a shower in the bathroom. The bedroom boasts a double bed with Egyptian cotton sheets.
The service is aimed at the ultra rich of the Persian Gulf. The airline says the experience is comparable to staying at a fine hotel, traveling by yacht, or having a private jet.
It also costs $20,000 for a one-way ticket.
“These are societies where there are some of the highest proportion of millionaires and billionaires per capita anywhere in the world,” says David Andrew Weinberg, a senior fellow at the Foundation for the Defense of Democracies, who specializes in the Persian Gulf region.
The three big airlines in the region all have ties to the area’s monarchies, says Weinberg.
“All of these are prestige projects for principalities in the Gulf,” he says. “It’s an outbidding contest of who can build the most luxurious new feature.”
But the airlines are also an important part of the region’s future economic plans. Those billionaires and millionaires were created through oil wealth. The oil will run out eventually, and Weinberg says the area’s governments are trying to build up industries, including airlines, that can take over.
The 10-year-old Etihad Airways became profitable only a couple of years ago. In 2008, it spent $43 billion to purchase new airplanes. It has 220 aircrafts on order, including 10 Airbus A380s and 71 Boeing 787 Dreamliners.
It is building one residence apartment in each of the new Airbus A380s that come into service, the first of which will be active in December. The apartment is first being offered on a London/Abu Dhabi route, but the airline plans to expand the service to New York, Paris, and other cities.
“International airlines are leading the way in super-premium services,” says Andrew Schmahl, an airline industry consultant with the firm Strategy&.
Etihad Airways is competing with a host of international carriers, which are all trying to out-luxury each other. Etihad’s competitor Emirates Airlines announced it also plans to offer apartments on some of its planes.
The first-class amenities on international airlines are starting to trickle down to U.S. carriers, as well. Amenities such as lie-flat beds, higher end cuisine that can be custom ordered, and even luxury cars that ferry first-class passengers between connecting flights.
Schmahl says airlines are willing to offer high-end luxury service to their first-class passengers, because while competitive pressures keep prices down for the vast majority of travelers, first-class passengers are willing to pay more for better service—and that means higher profit margins for airlines.
We’re here to help you navigate this changed world and economy.
Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.
In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.
Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.