Luxury business class makes business sense

A cozy bathroom, the latest Hollywood movies or a Starbucks latte - these are just some of the amenities high-end Chinese travelers are demanding while in the air.

As the purchasing power of China's middle-class grows, keen international airlines are sparing no effort to fend off competition for affluent travelers in China.

A substantial amount of profit for airlines is coming from first- and business-class passengers, says Wang Jiangmin, an aviation analyst.

Industry insiders estimate that first- and business-class passengers account for about 9 percent of the total number of passengers for airlines but contribute more than 40 percent in revenues.

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Globally, first- and business-class passenger traffic grew by 10.9 percent in the first 10 months of 2010, according to the International Air Transport Association (IATA), compared with a 7.6 percent increase in economy-class passengers. IATA is the airline industry's largest association, representing more than 230 airlines worldwide.

In December, Cathay Pacific Airways, Hong Kong's biggest carrier, announced it would spend more than HK$1 billion (98 million euros) introducing new business-class seats to attract high-spending travelers. Air France, British Airways and Deutsche Lufthansa unveiled new first-class cabins this year.

Statistics from the Commercial Aircraft Corporation of China show that by 2029, China will need 4,912 passenger jets, 3,447 more than it has today. China's share of the global passenger jet fleet will rise from 8 percent to 14 percent by 2029 as China attracts international carriers.

Marwan Koleilat, senior vice-president and chief representative in China of Qatar Airways, says: "There is huge growth to come in China's aviation industry and Qatar Airways wants to be a part of it."

"We have a mixture of passengers including laborers, students, tourists, businessmen and so on, but business traffic contributes the most," Koleilat says.

He adds that Qatar Airways' broad network and services ensure its market position in China.

"We currently fly to 95 destinations worldwide, operating a fleet of 95 aircraft," says Koleilat. The company recently purchased 80 Airbus A350 aircraft along with three A380 super jumbos.

It might be a truism that the essence of the airline business is to give the customers what they want - Koleilat says Qatar Airways is paying close attention to detail.

Qatar Airways introduced fully flat beds in business-class cabins in 2008 and now all new Boeing aircraft in the Qatar Airways fleet have them.

Business-class passengers served a broad array of foods, such as foie gras, caviar, smoked salmon as well as Chinese cuisine in addition to select vintage wines exclusive to Qatar Airways.

As a sign of the company's "luxury" strategy, Qatar Airways invested more than $1 billion (761 million euros) in improving the infrastructure of Doha International Airport, including the construction of a high-end terminal especially designed for first- and business-class passengers.

Covering an area of 10,000 square meters, the terminal has the feel of a five-star hotel with free international buffets, a 500-sq-m duty-free shopping mall, a spa and massage center, children's playground and conference center.

Koleilat says because of the strong connection between China and Qatar in trade and tourism, more Chinese people will visit the terminal and their experiences will drive Qatar Airways' business in China.

Having planted its flag in Shanghai, Beijing, Guangzhou and Hong Kong, the company is also considering expanding its network into second-tier cities in the country.

The airline industry worldwide is expected to reap $15.1 billion in profits, a record amount, helped by $7.7 billion in profits from the Asia-Pacific region, driven by China's economic growth, according to IATA.

Long-haul airlines, such as Qatar Airways, Emirates and Etihad Airways, are adding new aircraft three times faster than their rivals in Europe, and especially in Asia.