Airlines up the ante on the ground, in premium lounges

AMID crowded skies, the battle for premium passengers seems to be starting on the ground - with airport lounges. To secure customer loyalty, a number of airlines have made, or plan to make, sizeable investments in their on-the-ground products, not just at their home base but also at selected key hubs in their network. And what's now de rigueur at some of the lounges offered by airlines today are less stale sandwiches and more made-to-order meals, with a chilled glass of bubbly on the side, of course.

In July, Singapore's flag carrier announced that it would be ploughing S$50 million into overhauling its SilverKris and KrisFlyer Gold Lounges at Changi Airport Terminal 3, to be carried out in phases and completed by mid-2021.

With a 30 per cent bump in customer capacity, the new lounges will be able to handle over 1,000 passengers at a time.

A spokesperson for Singapore Airlines (SIA) says: "On-the-ground and onboard experiences are both important in our efforts to retain customer loyalty."

Other perks offered to passengers include SIA's boarding pass privileges, a free Singapore tour and Changi transit privileges, while First Class passengers have a dedicated check-in area.

Enhanced experience

"We drew on extensive research and feedback from customers to relook and re-envision our customer journey to develop the new design concept for our lounges at Terminal 3," the spokesperson adds. "By keeping the needs and wants of our customers in mind, we aim to deliver an experience that exemplifies the luxury and warm hospitality that SIA is known for."

To some market-watchers - and not a few passengers for that matter - SIA's move to finally refresh its lounges is certainly welcome news.

Brendan Sobie, analyst at Centre for Aviation (CAPA), says: "The lounges at a major airline's hub are generally considered a flagship product and can be an important differentiator between airlines. While SIA is known to have one of the best on-board Business Class and First Class services, its lounges are not often considered top of class. The upgrades in Singapore should hopefully narrow this gap."

With the overhaul, Suites and First Class passengers can expect a brand-new "The Private Room" and First Class Lounge, with more private seating and resting spaces for both work and rest as well as enhanced food and beverage offerings. (A lounge within a lounge, the exclusive Private Room is only open to SIA's Suites and First Class passengers.)

SIA's Business Class Lounge will be expanded and feature four distinct zones, including a café setting and a dining hall with live food stations. The airline will also role out a full service bar, "productivity pods" for passengers to catch up on work, as well as a rest area with chaise lounges.

Meanwhile, the KrisFlyer Gold Lounge will double in capacity and incorporate working spaces, larger seating and dining areas, and shower facilities.

Outside Singapore, the airline has already upgraded seven of its 13 overseas lounges with its "home away from home" concept at popular destinations such as Hong Kong, London and Bangkok.

Meanwhile, Qantas is due to open a new First Class Lounge at Changi Airport's Terminal 1 in November this year, following the recent expansion of its often-crowded Business Class lounge in Singapore. This is the first phase of its multi-million dollar lounge investment at Changi Airport, allowing Qantas' Business Class lounge to now fit over 570 passengers in a 24,100 square foot space.

Once the First Class Lounge is up and running, Qantas will be able to comfortably entertain over 800 passengers - or 60 per cent more - across its premium lounges in Singapore.

Other Qantas ports outside of Australia with a dedicated First Class lounge include Sydney, Melbourne and Los Angeles.

Since March last year, Qantas has been once again re-routing its daily Sydney-London services via Singapore - it swopped over to Dubai in 2012 as part of an alliance with Emirates - and passenger flows through Singapore have increased for the "Flying Kangaroo". Singapore is now Qantas' largest hub outside Australia.

At Qantas' expanded Business Class lounge, peckish travellers have the option of both a buffet and cooked-to-order dishes such as chicken laksa and roast pork belly. There are also cocktails, a barista service and plenty of showers to choose from (20 to be exact) for the road-weary or those who fancy a tipple.

Mr Sobie reckons that investments in new lounges and lounge upgrades by airlines are not only justified, but essential. He says: "Lounges are an important part of the product for many business passengers and frequent customers. Airlines that don't continue to make investments in lounges risk losing out to competitors."

This is especially critical for carriers operating in crowded markets such as South-east Asia, where the competition is keen.

Mr Sobie adds: "Some business passengers will take into account lounges in selecting airlines. More importantly, passengers may take into account lounge products when deciding to maintain loyalty to a particular airline or switch loyalty, given that the higher loyalty tiers usually comes with lounge access, regardless of class of service travelled."

Mark Chua, founder of luxury travel website The Shutterwhale, says: "It has become increasingly important for airlines to differentiate themselves and to offer value to premium passengers on the ground as well. To increase the value proposition without undertaking major reductions in price, upgrading - and expanding - an existing airline lounge can help augment the perception of the brand."

Sanghamitra Bose, general manager (Singapore and Thailand) for American Express Global Business Travel, agrees. "Lounges offering variety, choices and practical workplace support are a good way for airlines to differentiate their offer, and promote loyalty with their customers."

A survey by American Express Global Business Travel last year revealed that 85 per cent of business travellers in Singapore believe that earning personal loyalty points or rewards is a good reason to book outside of company policy.

Ms Bose adds: "We have seen a real growth in loyalty programmes by most premium airlines around the world. Loyalty programmes have proven a very effective way to encourage passengers to remain loyal to a particular airline when making bookings."

And as companies tighten their policies (and belts) around corporate travel, road warriors flying economy now place even higher value on having lounge access to freshen up either before a flight or while in transit. High on the list of needs are a shower, a hot meal and Internet access, Ms Bose notes. Generally, corporate travellers want a comfortable, quiet environment to work or relax, and some lounges offer quiet nooks for quick naps and even spa treatments.

Other airlines have opted for the bells and whistles, with Turkish Airlines' mammoth lounge in Istanbul housing a golf simulator and billiards table, while Cathay Pacific's Business Class lounge at Hong Kong International Airport features a dedicated noodle bar and a tea house.

Of champagne bars and sommeliers

Unsurprisingly, the top Gulf carriers, which already enjoy class-leading status in First and Business Class cabins, have splashed out on their premium lounges.

For hub carrier Qatar Airways, the airport lounge experience is a key touch point for its passengers as the airline drives traffic through its home base, Doha.

Marwan Koleilat, senior vice-president (APAC) at Qatar Airways, says: "For the Business and First Class segments, the on-ground experience does play a part in booking decisions and passenger loyalty since these tickets include complimentary use of airport lounges. However, the onboard experience is equally paramount."

Qatar Airways operates its own premium airport lounges in London, Paris, Beirut and Bangkok. In other airports, its passengers are offered access to premium lounges run by lounge operators.

Airport lounges by third party operators are now freely available to travellers willing to pay a fee for amenities such as Wi-Fi and charging ports, forcing airlines to up their game. In Singapore, certain credit cards also throw in complimentary lounge access via programmes such as Priority Pass or Plaza Premium Lounge.

"The increasing prevalence of pay-per-use lounges means travellers can now choose a club experience without having to commit to a particular airline. This competition between airlines and independent lounge networks has seen both sides striving to provide superior experiences to secure customer loyalty," adds Mr Koleilat. "Through our dedicated staff's hospitality coupled with on-ground service to meet every passenger's needs, we continue to surpass expectations, retain loyalty and gain new (passengers)."

At Hamad International Airport (HAI) in Doha, Qatar Airways' Al Mourjan Business Lounge is complimentary for all First and Business Class passengers under the oneworld network. The 10,000 square metre (sqm) lounge has a "resort-like ambience", the airline says. Food aside, it features private bedrooms for a quick snooze, a business centre and private workstations, as well as a garden area, children's nursery and a game room featuring a Formula One simulator.

Meanwhile, the Al Safwa Lounge for Qatar Airways' First Class passengers ups the ante with a 250-seat restaurant, a grand water fountain, Islamic art installation and artefacts on loan from the Museum of Islamic Art. Other perks include a cinema room, a family area and a luxury spa which throws in complimentary treatments and a Jacuzzi. Business Class passengers have the option of upgrading to the Al Safwa lounge for 650 Qatari riyals (S$247).

Dubai's Emirates has 42 lounges worldwide - including the recently refurbished Emirates First and Business Class Lounge at Changi Airport's Terminal 1 - and seven lounges at its hub in Dubai International Airport. Collectively, the Gulf carrier has invested some US$360 million in its global network of lounges. Some of its bigger lounges in Dubai include a 9,050 sqm First Class lounge at Concourse A with a Cigar Bar and sommeliers on-hand, while the 9,209 sqm Business Class Lounge at Concourse B features a Moët and Chandon champagne lounge and a selection of canapés crafted by Michelin-starred chefs. (The more health-conscious can grab a smoothie from a nook dubbed "the Health Hub").

"For Emirates, we have made and continue to make significant investments to develop our network of lounges because we see it as an integral part of the total value proposition for our premium customers," says Mohammed H Mattar, divisional senior vice-president for Emirates Airport Services. "Our expanding lounge network is addressing a clear need and expectation from customers. We pay as much attention to the on-ground experience, as we do to the onboard product and service."

Before boarding the plane, premium customers enjoy a chauffeur-driven service - available in over 75 cities. First Class passengers travelling to and from Dubai International Airport have the option of the Mercedes-Benz S450 sedan, and Business Class passengers can avail of Emirates' fleet of BMW 5 Series Touring cars.

Mr Mattar adds: "As part of our ongoing efforts to offer travellers the highest standards of quality and the best possible passenger journey, we'll continue to open new lounges, and refresh others."

Setting the tone for the travel experience

Typically, premium passengers are looking for an inviting, comfortable and quiet place to rest and have a bite before a flight, The Shutterwhale's Mr Chua notes. But airlines also need to look at what their passengers - and the passengers of their codeshare and airline partners - need when designing a lounge. For instance, if there are a fair amount of passengers with a layover, a shower at the lounge will be much appreciated, and preferably with a short wait time.

Mr Chua counts SIA's The Private Room at Changi Airport among his favourite lounges for the cuisine and champagne, while singling out Cathay Pacific's lounge at Haneda Airport for the design and space. Meanwhile, Air New Zealand's lounge at Auckland Airport offers the best cuppa joe, he shares.

Ultimately, Mr Chua believes that most rational travellers would hone in on the in-flight product when making travel decisions, especially when it comes to premium travel.

Still, airport lounges shape and set the tone of the rest of the travel experience, he adds, and having a positive experience on the ground can lift an airline from "good" to "great".