Sunday, May 04, 2014

Gulf Airlines Raise the Stakes in Luxury; Emirates Airline and Etihad Airways Prepare for Private-Suite Rollouts

The Wall Street Journal
By  Rory Jones

May 4, 2014 11:24 a.m. ET

DUBAI—At the end of a long day, one might unwind by closing the bedroom door, slumping into bed and turning on the flat-screen television to watch the soccer. Now such comfort can be enjoyed at 35,000 feet.

The in-flight bedroom is the latest brainchild of airline executives in the Middle East, where a luxury arms race has begun in earnest to lure customers to premium cabins with amenities and services akin to a hotel, yacht or private jet.

Both Emirates Airline and Etihad Airways are planning to launch fully enclosed private bedrooms on aircraft, where customers can experience the same modern technology in the sky that they are accustomed to enjoying at home.

"It's all about privacy," Emirates President Tim Clark said in an interview. "Our new bedroom concept will take it to the next level."

Emirates, the biggest operator of Airbus Group NV's A380 superjumbo and the largest customer of Boeing Co.'s new long-range 777X jet, is in the advanced stages of launching bedrooms that will likely feature on both sets of aircraft and include room service. The Dubai-based airline already has 1,562 private podlike structures it calls "suites" on its fleet of 218 aircraft.

Emirates wouldn't disclose the price it will charge for its bedrooms. But a return ticket on a New York to Dubai flight retails for around $26,000 in one of the suites, which cost around $500,000 each to produce—roughly the same as the price of a studio flat in downtown Manhattan.

Etihad, meanwhile, on Sunday unveiled a concept called "The Residence," which will feature an enclosed area with a double bed, an en-suite bathroom, a lounge area and a butler trained at the Savoy Hotel in London. "The Residence" will be available on Etihad's order of 10 A380s, the first of which will be delivered in December. It will priced at about $20,000 for a one-way trip between Abu Dhabi and London, which compares with the cost of about $100,000 for a private jet, according to Etihad Chief Executive James Hogan.

"There's a market for this type of product," Mr. Hogan told reporters at a news conference.

Middle East and Asian carriers are in a race to the top after collectively earning a reputation for offering a premium service across all cabins. Last year, Emirates won the travel industry's widely watched Skytrax award for the World's Best Airline, topping a list of 10 carriers that included four from the Middle East; no European or U.S. carriers featured.

Qatar Airways, which bills itself as the world's only five-star carrier, is among those keeping pressure on Emirates and Etihad to innovate. Qatar Airways plans on May 15 to launch a business-class-only service from its Doha hub to London Heathrow on an Airbus A319. Singapore Airlines also spent $150 million on upgrading the look and feel of its cabins last year.

When Emirates began flying the A380 in 2008, it introduced two onboard shower spas in first class. When it introduced an onboard bar on its A380s, Mr. Clark specified it should be designed so it could be removed within 96 hours and replaced with eight business-class seats just in case it wasn't popular. The bar survives.

Etihad will also now offer its own onboard lounge on the A380s. "Most of the European carriers have retreated from first class," Mr. Hogan added. "That gives us the opportunity to sell."