Surprising: Icelandair Is Eliminating Economy Comfort

Icelandair just made an announcement that certainly bucks the industry trend. Generally we’re seeing more and more airlines introduce premium economy. This is only natural as the size of economy seats continues to shrink, while the size of business class seats continues to increase. There’s a market for people who are willing to pay a bit extra, but don’t quite want to pay for business class.

Up until now, Icelandair has been offering three classes of service — Economy, Economy Comfort (premium economy), and Saga Class (business class). Icelandair has just announced that they’ll be eliminating their Economy Comfort cabin. The great news is that those who paid for Economy Comfort for travel after it’s eliminated will be upgraded to Saga Class, which is awesome. Wandering Aramean notes that the airline sent the following note to travel agents:

In order to remain innovative and competitive, Icelandair is excited to announce changes to our Booking Class Structure, effective 07APR18.

We will be discontinuing our Economy Comfort product in order to offer our customers more fare options for a travel experience that best suits their needs.

What do I make of this?

Iceland is a unique aviation market

The aviation market in Iceland has changed significantly over the past few years. For a long time Icelandair basically ran the show and didn’t have much competition. They could offer a unique product that no other airline could, that took advantage of their geography. Not only could they offer cheap fares via Iceland, but they could offer a free stopover to visit a country that many people are intrigued by.

That was great, but then a few years back WOW Air started doing exactly the same, and they’ve both expanded like crazy ever since. While Icelandair has always been a low cost carrier with relatively limited service, WOW Air is a true ultra low cost carrier, so they’re able to undercut Icelandair on price. This has caused an identity crisis at Icelandair, as they’re not sure whether they should try to compete as an ultra low cost carrier, keep doing what they’re doing now, or what.

Icelandair’s planes have unusual configurations

While there’s generally a market for premium economy, Icelandair has rather unusual configurations on their planes.

Their Saga Class (business class) is more like premium economy on other airlines, as seats are similar to what you’d find to domestic first class within the US.

As a result, their Economy Comfort (premium economy) is more like intra-Europe business class. You get an economy seat with a blocked middle, an extra inch of legroom, business class check-in, lounge access, free food, and more.

Given that Saga Class is generally fairly reasonably priced to begin with, one has to wonder how much of a market there was between their business class (which is more like premium economy) and economy. There’s certainly a market for premium economy, though I imagine many people found themselves disappointed when they thought they were getting a real premium economy, but instead just had a blocked middle seat. That’s especially true when you consider that most of Icelandair’s flights are fairly short, meaning there’s less value in premium economy.

What’s also strange is that their Economy Comfort cabin was a fixed size, so they didn’t have the flexibility to adjust the size of the cabin from flight to flight. As a result, they frequently had to upgrade people to Economy Comfort due to lack of demand.

What’s next for Icelandair?

Icelandair isn’t just eliminating Economy Comfort, but they also say that they plan to offer their customers “more fare options for a travel experience that best suits their needs.” This suggests that this is part of a larger overhaul of their product. My guess is that we’ll see them largely match WOW Air in offering more bare bones fares.

Last October Icelandair announced that they’d introduce Economy Light fares, which don’t come with a checked bag. However, that’s still not nearly as “ultra low cost” as WOW Air, which doesn’t even allow a full size carry-on.

What do you make of this move on Icelandair’s part, and how do you think they’ll transform?

Comments

  1. Is it too much to ask for an airline to offer a premium product with flatbeds for a redeye from North America — particularly the West Coast? I can imagine a Delta SEA-KEF route with flatbeds being an attractive option for a lot of people who want to visit Iceland, but don’t want to rough it on the way over.

  2. I tried to get my Dad to do the 100k Sapphire Reserve and he said he couldn’t spend 4k in 3 months lol. Then he got the Southwest for only 50k points for 2k spend. He wouldn’t listen to me on how easy it is to spend $4k even without MS, just prepay some bills, but anyway I understand the advanced game is not for everyone!

  3. As a Saga Gold member based in Iceland, I am dreading what this might mean for the Saga Club program. Right now, FI Gold elites get complimentary upgrades as a benefit, upgrades are available 90%+ of the time, and more times than not being upgraded to Eco Comfort means that you get to enjoy a Saga Class seat since they’re moving the Economy Comfort cabin forward very often since Saga Class is rarely close to full, especially to Europe, and especially between October and April.

    These complimentary upgrades from Eco to Eco Comfort are an important reason why a lot of us frequent fliers in Iceland stick with the airline. (The other of course being that WOW Air sucks, and that most other airlines only operate seasonally.) And while the vast majority of Icelandair’s customers are international and just connecting at KEF, I feel that the share of us locals at this point is higher in the premium cabins, at least in part due to the Gold upgrades from Eco to Eco Comfort, and from Eco Comfort to Saga Class.

    Also, I must disagree with Saga Class being just like Premium Economy on e.g. Lufthansa – while this is painfully true for the hard product, the soft product with nice pillows and duvets, noise-cancelling headphones, amenity kit with Blue Lagoon products, free WiFi, a somewhat decent wine list, and also the food, is easily more comparable to long-haul business on your average transatlantic flight.

  4. No, “more fare options for a travel experience that best suits their needs”, doesn’t mean anything. It’s just like “we’re eliminating food and drink in order to give customers more choices”.

  5. Do you have more details on this? Since the seats are different between Economy Comfort and Saga, do they need to reconfigure aircraft to implement this change, and how long will it take?

    We’re booked in Economy Comfort HEL-KEF-IAD in July, both legs on 757s. Does that mean they’ll move us up to Saga Class instead? Our preschool-aged daughters will certainly like that! Quite a spacious seat for a 3 year old who is less than 3 feet tall and weighs 35 pounds!

  6. It makes way more sense to me that IcelandAir should sell Saga class as Premium Economy. I tried Norwegian instead of IcelandAir SEA-LGW-OSL and it was ok. The experience on IcelandAir in Saga class is really nice though and I believe a reasonable value vs. World Traveller+ on BA or Norwegian’s premium class. Even better as the connections in Keflavik are quick.

  7. I wish there is a reverse herringbone seats option from West coast to Iceland. Instead, I have to haul ass to Europe and then fly back…. sigh.

  8. Considering that it is an ‘extra’ long haul for an overseas flight, due to the fact that there is a mandatory stopover in Reykjavik, premium economy class is imperative for some travelers (i.e. elderly, handicap, etc.) I have used it a number of times myself and been very pleased with Icelandair’s premium economy class.
    With the upcoming change I will no longer be able to afford a full upgrade and for some unknown reason, there are no special or sale fares offered to Canadians as compared to US flyers. Sorry to say I will be searching for another airline with premium economy class.

  9. Very disappointing. We really liked the Economy Comfort class with the blocked middle seats and the lounge access, and even had gotten an IcelandAir credit card to save up miles for another trip. We won’t be able to afford the much higher price of Saga class. We had thought IcelandAir would be our airline. Now we will have to re-think this.

  10. We are 4 people traveling in July YYZ- KEF-ARN-KEF-YYZ 2 Saga and 2 Economy Comfort. My question is will 2 of our company have to pay for the upgrade, if not what compensation will be offered for to the Saga couple. An explanation would be appreciated. James.

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