More Australian corporates are paying to move their people out of economy, with FCM Travel and Corporate Traveller reporting premium economy and business class demand surging as the biggest driver of recent growth.
Premium economy leads the surge, with bookings up nine per cent between September 2024 and August 2025 compared to the previous year, FCTG’s corporate brands reported. Business class bookings also climbed, rising nearly five per cent. Economy remained flat, while first class slipped.
Where the money is going
Melissa Elf, Global COO of FCM Travel and Corporate Traveller, said the figures show how companies are changing their approach.
“We’re seeing an uptick in the premium economy and business class cabins in particular, both domestically and internationally,” she said.
“Rising popularity at the front end of the plane reflects growth and stability across Australian businesses, and it echoes our recent findings that FCM Travel and Corporate Traveller customers are looking to spend more on travel in the year ahead.”
However, Elf noted that first class is more niche.
“I think we’re seeing a slowdown in first class bookings due to the vast improvements that are on offer in the business cabin that rival first class, and the really incredible experience that carriers are providing for travellers of the business cabin.”
Elf described it as a product reserved for ultra‑high‑net‑worth travellers, senior executives and board members.
“First class will offer that next level of exclusivity and privacy, but it’s a big jump in price from business class, and tends to mainly attract the ultra‑high‑net‑worths and our extra VIP business owners, board members and high‑level executives. While there will always be some appetite for first class, it’s not seeing bookings growth by any means,” she said.
Corporate budgets rise despite cost pressures
FCTG’s State of the Market survey, conducted in June and July 2025, found that 45 per cent of corporate customers globally plan to increase travel spend this financial year. In Australia, the number is higher at 47 per cent. Another 37 per cent intend to hold steady, with only seven per cent looking to cut back.
Elf said travel remains one of the few spend categories businesses cannot scale back without losing growth.
“Companies are aware that the cost of doing business is getting more expensive, so those focused on growth are committing budget to activity that deliver returns, and travel is one of those non‑discretionary areas of spend that drives revenue,” she said.
“Businesses are willing to pay for the more expensive cabin classes to get the greatest level of productivity and loyalty out of their travelling staff,” she added.
Despite inflation and cost‑of‑living pressures, premium demand is rising. Elf said the numbers prove travel remains essential for growth.
“This growth in the business and premium economy cabins comes in a period of economic uncertainty, and it goes to show that despite many businesses feeling the pinch of the cost of doing business, travel continues to be a necessity for corporate success and survival,” she said.
Airlines respond with cabin reconfigurations
Carriers are reshaping fleets to meet the new demand. Elf said more premium seats are being added, with airlines balancing innovation in their top cabins to stand out in a crowded market.
“Airlines are certainly prioritising the premium traveller,” she said.
“Recently, we have seen carriers reconfigure aircraft layouts to not only expand the volume of premium economy and business class seating but also innovate the top cabin offering and set a point of difference as the aviation sector gets increasingly more competitive.”
What does this mean for leisure travellers?
More premium seats for corporates means a different landscape for leisure travellers. With aircraft layouts shifting, economy fare buckets may tighten, upgrade inventory could change, and reward seat access might be affected. For travel agents, this makes monitoring airline schedules and seat maps more important than ever when advising clients on pricing and upgrade options.
KARRYON UNPACKS: Premium cabins are moving from perk to priority. For agents, this is a chance to upsell with confidence, frame comfort as productivity, and capture new value as airlines reshape their cabins.
