March 10, 2003

Why (and When) are There Three Classes?

Michael Jennings | Best of Transport Blog | Transport Miscellany

In the 19th century, when train travel was the "normal means of travel": used by all manner of people, railways in Britain had three classes of service: first, second and third. As cars became more widespread and trains became a minority means of travel, the third class of service was pretty much universally dropped. Most trains these days have only two classes of service. (Some railways - mostly commuter services - have only one). First normally provides a larger seat, a less crowded carriage, and in some instances at seat service and meals included in the ticket price (or access to a dining car that second class does not necessarily entitle you to). Second is what most passengers use, and provides a perfectly reasonable means of getting from A to B, but that is all. The drop from three classes to two indicates that the demographics mix of people travelling by train has shrunk.

Similarly, when the ocean liner was the normal means of travel from continent to continent, there was again usually three classes of passenger cabin. If you watch the movie Titanic, this is very obvious. The Rockerfellers are in first class, people who can afford comfortable service but are not Rockerfellers are in second, and ordinary people like Leonardo De Caprio are in third. It seems that a third class ticket conveys you perfectly satisfactory, a second class ticket conveys you in comfort, and a first class ticket is largely for the extra cachet of flying in first class.

Airline travel has now supplanted travel in ocean liners as the principal means of intercontinental travel, and the same three class structure has asserted itself. Economy travel conveys you, Business class travel provides you with much more comfort and better service than does economy travel. First class travel provides you with better service and comfort still, but the jump from Business to first in these respects is rather less than the jump from Economy to Business. First class is once again about cachet. Hollywood film stars fly first class. In the investment bank I used to work for, on long flights Managing Directors flew First, and all the rest of us had to make do with Business.

However, today there is little cachet in travelling by train, and therefore another class in which you are paying for the cachet rather than the actual better service is no longer practical.

However, there is an exception to this....

For some high speed rail services in Europe, the train has supplanted the plane as the "normal" means of travel, and essentially everybody, including at least some film stars and Managing Directors, will use the train due to the fact that it is more convenient than flying. What is interesting is that in these cases, three class train travel has returned. On the Eurostar from London to Paris, there is three class service. They do not call the classes first, second, and third, because they want to make it clear that the best class of service on the Eurostar is better than normal "First Class" train service. Therefore, the Eurostar has second class, first class, and premium first class. Premium first is, however, a separate class from ordinary first. It is in a separate carriage, the food is better, and the operating company claims that the service is better.

Eurostar is not the only fast train service in Europe to go back to three classes of service. The AVE service between Madrid and Seville has also gone to three classes (Tourist, First, and Club), and there may well be other fast train services that have done the same that I don't know about. (Shinkansen services in Japan are only two class, however. Perhaps the Japanese are more egalitarian).

The fact that it is all about exclusivity is also reflected in the ticketing system. There are lots of discounted first class tickets available for regular first class. If you are willing to lots of conditions on when you travel, and to have a non-changeable, non-refundable ticket, it is possible to travel in regular first class for as little as 110 pounds return, which is a lot less than a fully changeable and refundable second class ticket of 298 pounds return. However, if you want to travel premium first, there is only one ticket type, costing 500 pounds return. To me, this seems an utterly ludicrous sum of money to pay for a trip to Paris, but to some extent this is the point. The reason you pay that much money is to demonstrate that you can. It's not about the service or the legroom. People travelling in this premium first carriage want to know that the other people travelling this way have paid the same as them. That, too, is the point.

First class on aircraft is also like this. There are very few first class fares. If you want a place in the first class cabin, you pay the full amount. On the other hand, in business class, where you are mostly paying for superior space and service, there are a variety of discount fares. There are not as many as for economy, but it is certainly possible to pay considerably less for a discounted, inflexible business class ticket than it is for a fully flexible business ticket. This is once again about cachet. Bruce Willis wants to know that the other people in the first class compartment with him can also afford to pay for it (or at least to have their employers pay for it).

So that is it. If a particular means of travel is the "normal" means that all kinds of people use to get from A to B, we seem to end up with three classes. If the number of classes is less than that, this indicates that more limited demographics use that means of transport.

The fact that the number of classes you end up with always seems to be three is telling me something about human nature. Whether it is telling me something good about human nature, I don't know.

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Comments

I have to take exception to a few things you wrote regarding premium classes on airlines.

First, airlines are moving away from 3-class configurations, even on their international routes. While I'm most familiar with the United States (Delta, Continental, and Northwest all offer 2-class products, and American is dropping its 3 classes to most international destinations and is reconfiguring its 767 fleet accordingly), the U.S. is by no means alone. Qantas, for instance, is also dropping 3-class service on several routes. (There are exceptions to this trend. British Airways, for instance, offers FOUR classes - with the new fourth being between coach and business.)

Second, while there aren't as many discount first class fares are there are discount business class fares, they are by no means uncommon. There are usually at least two buckets of revenue first seats. With United Airlines these are "F" (full) and "A" (discount), for instance.

Third, your claim that "[i]f you want a place in the first class cabin, you pay the full amount" is simply not true regardless of fare structure. First class is often full of upgraded business class passengers, just as Business Class is often full of upgraded Coach passengers.

Fourth, if "Bruce Willis wants to know that the other people in the first class compartment with him can also afford to pay for it (or at least to have their employers pay for it)" then he had better pick and choose his airline carefully, because many First Class cabins are full of the airline's own employees. This is a result of so few full fare First Class passengers, and policies which prevent "double upgrades" moving passengers from coach to first.

Posted by Gary on March 11, 2003

Okay, fair enough. I should have been less dogmatic. My mind was thinking more about the fact that three class service has been restored on some European trains, which is an interesting trend, and trying to see how this compares with other modes of travel. It's also easier to find a complete list of all the ticket types for Eurostar trains - you just pick up a leaflet - than it is to find a list for air travel.

I think I will stand by my basic point that there are many fewer options in first, and that this is at least partly about exclusivity, although I will concede that the "If Bruce Willis wants..." comment was silly. (For one thing, Mr Willis probably flies by private jet). For another, airlines are unlikely to turn away revenue business class passengers just because the business class cabin is full if there are empty seats in first.

As for the trend away from three class travel, this is certainly happening in some places, but I think it depends very much on the route. Some routes have passengers to support it, and some don't. Qantas has for quite a few years had three cabins on most of its 747s, but only two on most of its 767s. A big part of the reason for this is that the 747s fly between Sydney or Melbourne and Asia or the US, whereas the 767s fly from Adelaide, Perth or Brisbane, and these cities do not have many potential first class passengers. Qantas may be reducing the number of routes on which it has three classes, but I doubt first will ever happen on routes such as SYD-LAX, or SYD-SIN-LHR, and a few others.

(It may also be that the state of the global economy at the moment has curtailed demand for it. It is the sort of perk you probably don't want to be seen offering to your executives at the same time you are sacking lots of people. It may be that the third class comes back on some routes when the economy improves).

I have actually seen extra classes created between coach and business appear before. In Australia a few years back Qantas and Ansett competed heavily on their premium domestic products. Each tried to demonstrate that "Our business class is as good as out competitor's first class", and both upgraded business to the extent that it was almost indistinguishable from first. This led to the abolition of first. It also led to a huge gap in service between business and economy, and to fill the gap they then introduced "premium economy" services in which full fare economy passengers got a separate cabin, free alcoholic drinks and a couple of other things. What we ended up with was a three class service rather like what we started with, but with the classes having different names and different fare structures. It may be that something similar is happening with British Airways, and I will be interested to see if they still have four classes in a couple of years. (I think Virgin Atlantic has three classes, too, except that they essentially have business, coach, and something in between?).

Posted by Michael Jennings on March 11, 2003

I think that your overall points may be sound, but my nitpicks are really about suggesting that your points not be taken too far.

While three classes of service may be common, I'm not sure that it says something about human nature as you conclude.

After all, you acknowledge that private jets are a transportation option for some -- of course this includes owned jets, leased jets, chartered jets, fractional ownership, etc. And why shouldn't this be considered a class of service, even if the provider is different from a major air carrier? (And it won't necessarily stay separate. Last year United Airlines killed its attempt at entering the Business Jet market.)

As 3-class service comes and goes -- from BA offering four classes, to QF killing 3-class service on the LAX-MEL route, and even the prevalance of one-class low cost carriers and regional carriers offering only only class -- it becomes more and more obvious that the number three is contingent rather than a function of human nature.

I think the more salient point is that transportation is not just a commodity, and that different consumer groups demand differentiated products. Different markets demand different levels of differentiation. Successful companies figure out what their customers want and provide it to them.

Posted by Gary on March 12, 2003

There's a railway precedent for this from the 19th Century when Midland abolished Second Class. See http://irwell.mimas.ac.uk/~zzaascs/mrsoc/firstclass.html

Posted by Patrick Crozier on March 13, 2003

Patrick, that's good. I do like this comment:

"Meanwhile some of the leading organs of the press, instead of estimating the enormous value of the boon about to be conferred on the public, were critical, irresolute, or adverse."

Some things clearly never change.

Posted by Michael Jennings on March 13, 2003

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