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Should Airlines Make Kids Fly Coach?

Malaysia Airlines’ baby ban might spur 'adults-only' flights


When Malaysia Airlines announced plans earlier this week to ban babies from the first-class section of their new Airbus A380 superjumbo, debate over the policy went viral faster than a YouTube video of a kleptomaniac cat. It triggered such a huge social media maelstrom, the airline’s CEO was forced to vigorously defend the decision on Twitter.

Supporters hailed Malaysia Airlines’ decision as a victory for premium-class flyers who are tired of losing sleep over crying babies. Opponents argued that the big bucks parents plunk down for junior’s first-class seat are just as good as anybody else’s money. The airline views the controversy as a tempest in a teacup – particularly since it banned children under age 2 from first-class cabins on its Boeing 747s back in 2004.

But behind the collective cheers and jeers about Malaysia Airlines’ baby-free first class policy, there is a real issue: Premium-class travelers don’t want their sleep or work disturbed by fussy or rambunctious children. And that issue can impact future earnings of U.S. airlines like Delta (NYSE: DAL), United Continental (NYSE: UAL), AMR Corp.’s (NYSE: AMR) American Airlines, Southwest (NYSE: LUV) and US Airways (NYSE: LCC).

Here’s why it matters: A recent survey by the U.K.-based Business Travel & Meetings Show found the presence of children in first class was the single most annoying factor for business and luxury-class travelers. In fact, a whopping 74% of the 1,000 respondents would be most satisfied by “adults-only” flights that banned all passengers under 18.

The debate over Malaysia Airlines’ baby ban comes just days after a new study found “pervasive” passenger discontent with U.S. airlines. According to the American Consumer Satisfaction Index, travelers ranked their level of satisfaction with their airline experience at 65 out of a possible 100. Airlines’ most profitable customers – business travelers – were even less satisfied, yielding a score of only 61.

While crying babies can’t account for all that negative sentiment (after all, baggage and other fees are very unpopular, too), U.S. airlines might need to explore creative options to keep their best customers happy. And that might include rethinking their accommodations for minors. Industry experts say there are several ways to accomplish this:

  • Offer an “adults-only” cabin on high-frequency routes, while steering families to other flights.
  • Convert the upper deck of 747s (or double-decker A380s) to “adults only” on long-haul routes.
  • Create price disincentives that discourage parents from flying with babies. European low-cost carriers like Ryanair, Jet2 and Easyjet are charging flat fees for bringing infants onboard – fees that can be as much as double the cost of a discounted, adult fare.

Bottom Line: On the issue of banning babies from premium-class cabins, airlines find themselves between the proverbial rock and a hard place. On one hand, looking heartless and discriminatory when it comes to infants and children does not generate a lot of goodwill with traveling parents. On the other hand, business and premium-class passengers are almost twice as profitable as economy-class travelers are – and that’s a market all airlines need to win. Airlines that manage to walk that tightrope successfully will be well positioned to beef up their bottom lines – and boost investors’ returns.

As of this writing, Susan J. Aluise did not hold an interest in any of the stocks named here.

Article printed from InvestorPlace Media,

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