The airline companies just can't seem to get it straight. If one figures out a way to increase its market share, the others either quickly copy it or change their operations to close the window of opportunity the first airline discovered. If they get into a boom cycle they tend to increase wages, upgrade their fleet and add whistles and bells to their services. Soon they're losing money and entering a bust cycle.
Presently, discount airlines offering low fares, minimal services, second-class facilities and flights to outlying regional airports have been the only airlines making money. The full service airlines are all losing money.
The discount airlines are taking away those customers the major carriers used to fill the otherwise empty seats on their flights with. The remaining passengers on the major airline will either have to pay more or the airline will have to fly at a loss. This is what is happening in a nutshell. Something needs to be done!
The road to the simple solution is for all the airlines to recognize there are two classes of passengers, those looking for the best price and those willing to pay more for service and convenience. I think the low price passengers already recognize this and accept that cheap seats means accepting less service. Those willing to pay more are stuck with airlines that haven't accepted the new order and are afraid to increase fares least they lose more passengers to low cost airlines.
They've already lost most of these passengers and might as well accept the fact that they're going to have to restructure their business model to provide a higher-class service to a smaller number of passengers willing to pay for it. Their biggest problem, besides high labor and operating costs, is that they're stuck with a lot of big, expensive planes. Bankruptcy might give them a way out of these problems.
Consumers have to realize that airplanes are nothing more than big buses that go fast. Those flying on low cost tickets, whether on a low cost airline or on a 14-day advance purchase on a major airline, are simply on a fast bus and sitting three abreast. (Strange but these people wouldn't accept riding a bus with seats three abreast).
Those flying first or business class on a major airline, while paying more than the 14-day advance purchasers, are still flying for much less than a private or charter plane would cost. And they're saving money because the airline has stuffed the back of the plane with low paying passengers. That's all changing.
The discount airlines will be the high-speed buses for those for whom low cost is the prime criterion. The major airlines will have to find a way to serve the bulk of the higher paying passengers at some in-between cost, more than discount but less than first class. This will mean using smaller aircraft with some seats removed to provide a deluxe but not luxury service. It will mean less non-stop, cross-country flights. (Delta may be the first to try to adjust by spinning off a low cost subsidiary.)
The flying experience has already changed for low price travelers and will eventually change for the higher priced traveler. Airplanes are mass transit that most people don't use every day or even every week. Most people will accept some comfort, convenience, and cost changes for what is an infrequent experience.
Airline management (decision makers) is handicapped in that their experience has been distorted by only flying first class and scheming on how to steal market share from airlines offering similar services on similar types of planes. The old saying, "If you keep doing what you've been doing, you'll keep getting what you've got" should be noted by these managers.