Slate Money: Travel – "The Death of First Class"

Date: March 26, 2019
Host: Felix Salmon
Guest: Charles Reed (The Economist)

Episode Overview

This episode explores the vanishing world of first-class air travel and the shifting landscape of airline cabin classes. Felix Salmon and guest Charles Reed (The Economist) break down how first-class cabins—once the pinnacle of luxury—are being phased out by most major airlines, even as economic inequality rises. The discussion delves into the historical origins of first class, the competitive arms race with business class, and the growing appeal of private jet travel among the ultra-wealthy. The episode also examines the carbon costs of premium flying, tax incentives for private jets, and the resurgence of train travel as an eco-friendly alternative.

Key Discussion Points and Insights

The Disappearance of First Class (00:09 – 01:24)

• Historical Context: First class was originally the only way to fly; over time, additional classes were created:
  • Economy: Introduced in the 1950s.
  • Business: Appeared in the 1970s.
  • Premium Economy: Surfaced in the 1990s.
• Current Reality: Most airlines now eliminate first class on international long-haul flights.
  • In the US, only about 20 planes with first class remain; major carriers plan to phase it out completely.

Quote:

"First class used to be the only class there was in the sky...everyone flew first class back in the 1930s and 1940s."
— Charles Reed (01:43)

Evolution of Cabin Classes (01:43 – 05:21)

• First vs. Economy: Economy created to democratize air travel—more passengers, lower fares.
• Business Class Emergence: Responded to a growing gap between luxury (first) and standard (economy), offering an intermediate experience.
• Changing Perceptions: The comfort of “first class” in the 1950s is likened to today’s premium economy.
• Focus on Service: Originally, distinctions hinged more on food and service than seat quality.

Quote:

"First class in the past used to look very much like what now looks like premium economy...similar seats to what Norwegian Airlines puts in their premium economy cabin."
— Charles Reed (03:55)

• Rise of “Swanky” Seats:
  • British Airways introduced the first lie-flat beds in first class (1995), then in business (2000).
  • This arms race led to features like in-flight suites and apartments.

The Arms Race and Decline (05:21 – 08:02)

• Business Class Upgrades: As business class gets swankier, first class becomes harder to differentiate and justify.
• Customer Decision:
  • The main appeal became lie-flat beds and privacy—features business now offers.
  • Many travelers opt for business over first due to minimal added value for substantial additional cost.

Quote:

"Business class getting swankier actually disrupted first class...people going, 'Should I really pay 2, 3, 4 times as much for a little more room and a little better champagne?' And lots of people decided no."
— Charles Reed (07:29)

The Shift to Private Jets (08:02 – 10:59)

• Ultimate Flexibility:
  • Some travelers now seek complete schedule control, prompting a move to private aviation.
  • Private jets offer total flexibility in departure times; first class can’t compete here.
• Cost Dynamics:
  • Fractional ownership models (NetJets, etc.) make private travel more attainable for the wealthy.
  • Empty leg deals offer discounts but less flexibility.

Quote:

"The proposition that flying in a private jet offers, that first class can only compete with in limited ways."
— Charles Reed (09:20)

Contrast: US vs. International (10:59 – 13:11)

• Domestic Realities:
  • In the US, distances are often too short to justify lie-flat seats or luxury cabins.
  • Most passengers are content with modest upgrades over standard economy.
  • International/overnight flights drive the demand for premium seating.
• Similar Trends in Europe:
  • Business/first class features are less significant on short-haul, intra-Europe flights as well.

Quote:

"The real benefit of paying thousands of dollars...is to save an overnight stay in a hotel or be able to get back to your family and turn overnight time into flight time."
— Charles Reed (12:24)

Expansion of Private Aviation & Incentives (13:11 – 14:43)

• Growth Factors:
  • Increased use and shared ownership lower per-flight private jet costs.
  • US tax laws allow major write-offs for private jet purchases (notably post-Trump tax cuts), incentivizing ownership.
• Environmental and Policy Impacts:
  • Aviation fuel for international private flights is excluded from carbon regulations (Paris accord, Corsair).
  • Emissions from private jets could rise from 0.9% to 4% of the world total by 2050 if trends continue.

Quote:

"In America...there are now massive tax breaks...which is encouraging more people to buy and use private jets."
— Charles Reed (14:12)

Carbon Emissions & Environmental Concerns (14:43 – 18:11)

• Premium Travel’s Carbon Cost:
  • The World Bank: Premium cabins (business/first) = 3–6x the carbon per passenger versus economy.
  • Half-full private jets = 10x emissions per passenger compared to economy.
• Moral Considerations:
  • Reed argues emissions should be taxed, not subsidized.
  • Questions why broader populations should subsidize travel for the wealthiest.

Quote:

"There’s a question of why should [the top few thousand people] produce so much of the world’s carbon emissions and why should taxpayers be subsidizing doing it?"
— Charles Reed (15:28)

• Host’s Rule of Thumb:
  • If economy ticket = X, business = 3-6X, private jet = 10X emissions.

The Case for Trains (18:11 – 18:39)

• Sustainable Alternatives:
  • Electric trains (with renewable energy) offer a “free carbon lunch.”
  • Train travel is seeing a renaissance in parts of America (e.g., Brightline/Virgin Trains).

Quote:

"Arguably, there is a free carbon lunch...an electric train where electricity has been produced by renewable energy."
— Charles Reed (18:11)

Notable Quotes & Memorable Moments

• "First class used to be the only class there was in the sky." — Charles Reed (01:43)
• "First class in the past used to look very much like what now looks like premium economy." — Charles Reed (03:55)
• "Business class getting swankier actually disrupted first class...lots of people decided, no, it’s not worth it." — Charles Reed (07:29)
• "If you have a nicer flight, you should definitely consider that to be a significant carbon expenditure." — Felix Salmon (18:03)
• "There’s a question of why should they produce so much of the world’s carbon emissions and why should taxpayers be subsidizing doing it?" — Charles Reed (15:28)
• "Arguably, there is a free carbon lunch…you take an electric train where the electricity has been produced by renewable electricity." — Charles Reed (18:11)

Timestamps for Key Segments

• 00:09 — Introduction and the central question: What happened to first class?
• 01:43 — Evolution of cabin classes; historical perspective.
• 03:55 — What old first class looked like versus today’s classes.
• 05:21 — Service vs. seat-based differentiation.
• 07:29 — How business class “disrupted” first class.
• 08:42 — Rise of private jets and reasons for the shift.
• 10:59 — Why US domestic first class isn’t as luxurious.
• 13:32 — Growth in private aviation and regulatory incentives.
• 14:43 — Carbon emissions, tax policy, and environmental impacts.
• 17:05 — Multiplying your carbon footprint for premium travel.
• 18:11 — Brightline and rail’s environmental case.

Closing

Felix Salmon wraps the episode by vowing to stick to economy—and trains—whenever possible, and thanks Charles Reed for illuminating the economics and ethics behind the death of first class.

Closing Quote:

"As a good environmentalist, I will try and take the train as much as I can—and if I do wind up in economy as I usually do, I will at least be able to feel smugly superior to the carbon hogs up front." — Felix Salmon (18:39)