Gulf airlines invest in high-end cabins as demand for premium travel soars

Region tops global markets with growth in premium travellers hitting almost 15 per cent in 2024

Etihad Airways said its new Airbus A321LR is 'redefining' luxury travel, with first-class cabins in a narrow-body plane. Photo: Etihad Airways

Gulf airlines are investing billions of dollars in luxury cabins as the demand for premium travel soars above the other global markets.

The Middle East had the highest share of premium travellers globally, with 14.7 per cent of the total opting to fly in business or first-class cabins in 2024, a recent report by International Air Transport Association (Iata) found.

The region posted an 11 per cent year-on-year increase in international premium travel last year, Iata said in its 2024 World Air Transport Statistics report.

The growth is being driven by long-haul airlines including Emirates, Etihad Airways and Qatar Airways that are funnelling intercontinental passenger traffic through their hubs and redefining luxury in the skies, analysts say.

While western airlines are avoiding flying through Russian airspace due to sanctions caused by the war in Ukraine, several Middle East carriers have continued flying over the zone.

"For some airlines, the Russian overflight issue has resulted in them dropping services, and that has provided an additional source of ... premium traffic for other airlines, as passengers route through the Middle East between Europe and Asia and vice versa," said John Grant, senior analyst at travel data company OAG.

Increased disposable income in some markets, appetite for a "less congested" travel experience and an increase in leisure travellers in the front of the cabin are also driving premium travel, he added.

Etihad Airways introduced first and business-class cabins on its Airbus A321LR single-aisle planes. Photo: Etihad

Many airlines have overhauled their aircraft interiors and premium seats, then advanced to upgrading some of the subtler features of their front-cabin services, such as luxury amenity kits and fine-dining meals.

Emirates, for example, offers its first and business-class passengers a keepsake gold-lacquered Bulgari mirror and a bottle of eau de perfume from the Italian brand, while Qatar Airways last year began serving caviar to business-class passengers on 13 international routes from Doha.

'Extraordinary' scale of investment

Gulf airlines are investing heavily in premium products. Etihad has introduced first and business-class on its Airbus A321LR, a narrow-body plane, a departure from industry norms, where such premium cabins are typically found on long-haul flights aboard wide-body aircraft.

Emirates is carrying out a $5 billion programme to retrofit its Boeing 777 and Airbus A380s to keep older planes flying for longer, after a series delays in deliveries of new models on order from the manufacturers.

Riyadh Air in April unveiled its first cabin interior designs before starting commercial flights later this year, promising glamorous offerings on its planes that will be the "Audrey Hepburn of the sky", its chief executive Tony Douglas told The National at the time.

Qatar Airways' new business-class seat, named the "Qsuite Next Gen", will be introduced on its Boeing 777-9 wide-bodies.

"The scale of investment in Gulf aviation is extraordinary, signalling not only confidence in the market, but an understanding of how deeply travellers now value the journey itself," Anita Mendiratta, adviser to the UN World Tourism Organisation, told The National.

The market is valuable and the return on investment is "very high," especially in the premium economy class, so it is "natural to see the current levels of investment", Mr Grant said.

"It’s also much easier to introduce such new products and services when new aircraft are being delivered, and that is a key driver for the locally based airlines."

The Middle East's growth in premium travel is expected to continue, despite challenges from economic uncertainties and geopolitical tensions, as their global networks are diversified.

"We are talking major global hubs capable of developing traffic from multiple markets so its pretty solid growth," Mr Grant said.

The region’s role as a connector between Europe, Asia, Africa, and the Americas has made premium travel "not simply a luxury, but a necessity for those whose lives, work, and ambitions transcend borders. And this growth is set to accelerate," Ms Mendiratta said.

"New routes and carriers are expanding the GCC’s reach," she said, citing examples such as Riyadh Air’s debut in late 2025 with an aim to serve 100 international destinations by 2030.

Etihad Airways brings first-class luxury to small planes

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Global premium travel trends

International premium class travel grew 11.8 per cent globally, outpacing growth in the world's economy-class travel of 11.5 per cent, according to Iata.

The total number of international premium-class travellers in 2024 reached 116.9 million, comprising 6 per cent of total international passengers, it said.

Asia-Pacific led the growth with a 22.8 per cent increase in premium air travel to stand at 21 million premium passengers.

However, this was dwarfed by the 28.6 per cent increase in economy class travel to 500.8 million passengers.

Growth in premium travel exceeded economy class travel in Europe, Latin America, Middle East and North America.

Europe remained the largest market for international premium travel, with 39.3 million premium passengers.