How Premium Economy Became the Most Profitable Part of the Plane

Korean Air’s decision to add premium economy was sluggish, but the math is irresistible. For many airlines, this mid-tier cabin is where passenger comfort meets cash flow.

For decades, the airplane was split into two tribes: those who could afford the luxury of business or first class, and everyone else. But there is another way.

Last week, Korean Air confirmed that it will be the latest big-name brand to join the premium economy club. What started in the early 1990s as a quirky differentiator at Taiwan’s EVA Air has gone hyper-mainstream.

Why? A premium economy seat can command between 1.5 and three times the yield of standard economy, but often takes up marginally more real estate and service cost. The result is a mid-tier cabin that’s quietly become a rockstar profit center at many airlines.

For its part, Korean Air will roll out the new cabin from September as part of a $215 million overhaul of its Boeing 777s. Offering an insight into its pricing strategy, the Seoul-based carrier told Skift that the uplift for its “Premium Class” fares will be around 110% of regular economy. Passengers can look forward to perks such as Armani tableware, ergonomic headrests, and fine wines.

But look beyond the fluffy comforts, and you’ll find a tangible business impact. In an earnings call last month, Andrew Nocella, United