Sky-high pitch: The new ways airlines are upselling seats

You've been looking forward to this moment for months - maybe even years - but as you set off to some far-flung destination, your excitement is interrupted by a glance to your left, and a brief glimpse behind the curtain.

You know that, on the other side, is how the other half live - fancy food, flowing drinks and cushy seats that become beds.

But you're not a first-class kind of person. You're not even business class. So, you sculk to your economy seat and strap yourself in for 16 hours of limited leg-room and plenty of noise.

It's exactly this kind of customer that some airlines are hoping to be able to upsell to.

Like Air New Zealand, which has started taking bookings on its 'Skynest', which will become available to some of its passengers by the end of the year.

Skynest is what can only be described as two sets of triple bunk beds that the airline is putting in the middle of the economy section of some of its new planes, namely the Boeing 787-9 Dreamliner.

Each bed is about 2m long and 64cm at its broadest point - narrowing to just over 40cm at its foot. The bottom two beds are pretty much on the floor of the plane, while you have to climb up a few steps if you want to get to either of the top ones.

But for that bit of effort you get a privacy curtain, a spot to charge your phone, a few amenities like ear plugs and a sleep mask, and a promise of fresh sheets wrap yourself up in.

Initially, this will only be available to Air New Zealand's economy passengers on select flights between New York and Auckland, at a cost of just under NZ$500 (roughly €246).

That is, of course, on top of the cost of the actual plane ticket,which might set you back NZ$1,500-2,000, or €750-1,000.

So not cheap, but it is a hell of a lot cheaper than the €4,100-6,200 euro you might pay to be in the bed-like comfort of business class.

Class airfare

Of course the idea of charging passengers for a bit of extra space is nothing new.

It was Howard Hughes' TWA (Trans World Airlines) that was reportedly the first to create two distinct classes on a single plane in 1955. And the concept grew from there, with first class and then business class spreading rapidly across the industry.

Different airlines began to introduce different amenities for those premium passengers as part of their attempts to stand out from the crowd. That may have taken the form of better in-flight meals, or access to bars or lounges, all the way through to the lie-flat beds that Air France and British Airways debuted in the 1990s.

Even as the era of no-frills took hold - which made single class flights the norm once again, while simultaneously shrinking the amount of room that each passenger enjoyed - the space premium persisted.

If you're picking a seat on a Ryanair flight today, for example, the most expensive options are the ones in the front row and in the middle of the plane, which have the most leg room.

It's just business

The reason the space premium has survived so many changes in aviation is because it is extremely lucrative for airlines.

It's not clear exactly how much a carrier might make from business or first class. The likes of Lufthansa or IAG (owner of Aer Lingus and British Airways) do not break down their revenues by passenger type.

However. recent analysis by McKinsey gives some indication of their value.

It broke down the revenues and costs involved in a standard one way flight from London to New York and it suggested that the business class seats were bringing in almost the same revenue as the flight's economy seats.

Bear in mind, in this instance, there were around 30 business class seats, compared to just over 190 economy seats.

That's more than six times the revenue per seat.

And that makes sense when you look at what airlines charge.

In the Air New Zealand example listed above, an economy seat from Auckland to New York might cost €1,000, but a business class seat could cost €6,000.

So, even if the business class seat takes up the same amount of space as three or even four economy seats, the airline is still getting far more money per metre at the higher end.

Of course there are other costs involved in business class versus economy, but, as the budget airline model shows us, how space is used within the cabin is a huge determining factor in how much profit an airline can make in a flight.

And the likes of business class is just an extension of the same concept.

Long-haul airlines will try to squeeze as many people as they can into economy, but at the same time, if someone wants to pay five times as much for three times the space, then they'll have a suitable option available too.

But Air New Zealand's SkyNest is an example of a third option targeting the so-called 'premium economy' customer.

Flexible economy

The idea of 'premium economy' is simply an economy passenger who is able and willing to pay a bit more on top of their ticket to enjoy a bit more comfort.

So that might be more leg-room, or the use of a bed for a couple of hours during their flight.

And this class of passenger is one airlines are really focused on right now for a number of reasons.

Because even where business class or first class options are available, they're really expensive. That means they're instantly out of reach for the vast majority of travellers.

And while more-than three decades of the no-frills revolution has brought down average fares, and made flights more accessible to the masses, it's also significantly reduced what passengers get with their plane ticket, including the amount of space they have in-flight.

And between the business classes and the bargain hunters, there is a cohort of customers who have some extra cash and a desire for comfort.

This is where the premium economy offering comes into its own.

The beauty of this for the airlines is that it's generally low cost to them, too.

While a business class passenger will expect to be treated accordingly - with better food and drink and top-notch service - an economy passenger who pays an extra €20 or €30 for a bit more legroom knows that's all they are getting.

From next year United Airlines will allow passengers to book three seats for themselves, which they can then use as a lie-flat space.

Similarly Air New Zealand has a similar option called 'SkyCouch', which is a row of economy seats that can be converted into a makeshift couch or bed via an adjustable footrest.

And this suits the airline because it leaves them flexible enough to respond to what the passenger is willing to pay for.

These options might take up about as much space as a business class seat when in use, but if no-one wants to pay the extra to book them they can just be sold as three regular economy seats instead.

On the other hand, a business class seat that isn't booked is either left empty or has to be sold off at a steep discount.

That McKinsey analysis into airline revenues suggested that a premium economy passenger is bringing in twice as much revenue per seat than an economy passenger.

While that's nowhere near what a business passenger is worth, that flexibility and the low cost incurred in catering to them means they're still very profitable.

Risky business

The rise of premium economy options is also coming at a time when some airlines are counting the cost of investing heavily in business class.

Because there are a number of airlines that are flying, or about to begin flying, new planes that have really fancy business options, like pods with lots of privacy, really comfortable seats that can be adjusted a multitude of ways, and lots of multimedia and entertainment options.

Which would no doubt be very tempting for well-heeled passengers, if the tickets were available to buy.

KLM is planning to start flying its new Airbus A350s in September, but it says the business offering that's meant to be part of that won't be ready in time.

Singapore Airlines has delayed the debut if its new premium cabins until next year.

Lufthansa recently launched new Boeing 787 Dreamliners with only four of the 28 business cabins available for sale (most, but not all, have since become available to passengers.)

The reason that's happening is because those fancy business seats had not yet gotten regulatory approval.

Because of course aviation is highly regulated and there are rigorous safety standards that every piece of a plane has to meet before it can be offered as part of a commercial flight. For example, seats have to be tested to see if they can withstand up to 16Gs of force without falling apart or injuring the person sitting in them.

Regulators also want to be sure that parts of them aren't going to easily come loose and block aisles - or become projectiles that pose a risk to other passengers.

And every piece and component has to be tested in a number of ways and in a number of different scenarios. The more complex the seats are, the more pieces have to be analysed.

And it's not something regulators are willing to rush - particularly in the aftermath of the Boeing 737 MAX crashes. They were due to bigger problems than seats, but the disasters still put a spotlight on aircraft certification processes.

And complicating matters even more is the fact that different airlines will each have different cabins and seat configurations - so one getting approved doesn't necessarily help another that's still in the queue.

Given the long lead-in for regulatory approval, it might seem prudent for airlines to wait until that hurdle is cleared before they begin kitting out the planes in the first place.

But at the moment there are also huge backlogs at both Boeing and Airbus, meaning airlines are waiting years between order and delivery.

So, if they waited until certification before ordering their new planes, they'd lose even more time before being able to put their new seats into service.

To avoid that, airlines are placing the orders well in advance of certification, essentially taking a bet that the paperwork will have cleared by the time they take delivery.

And, as we see in some cases, they've gotten their timing wrong.

Nest we forget

Given all of that, you can see why airlines are increasingly opting to upsell minor modifications to economy seats.

And, if you happen to be planning a trip between New York and Auckland in the coming months and have a couple of hundred euro to spare, you might decide that a spot in a bunk bed is an add-on worth having.

Before you book, though, it's worth knowing that there is a catch.

Actually, a couple of catches.

The main one is that you can only book the Skynest for four hours - and you can only book it once per flight.

As the Auckland-New York flight is 16 hours it means that, at best, you'll still be in your economy seat for 12 hours.

Meanwhile there are lots of others rules and recommended 'nestiquette' that goes with making a booking.

It's only available to people aged 15 or over - and it's a one person per nest rule, so you can't bring your child with you. If you're travelling alone with a child, you're out of luck.

You also have to be able to get in and out of the bed independently - so older people or those with physical disabilities may struggle to use one.

You're not allowed to bring snacks in, and the only drink you're allowed is water.

And you have to take your shoes off, but you do need to wear fresh socks (a pair is provided to you in your amenity pack).

They also ask people to try to avoid disrupting people in the other pods, going so far as to ask people to go easy on the perfume and potions beforehand.