I think this assessment of the airline industry is spot on, and we only have ourselves to blame.
As much as I’d like say this is a bad strategy, I’m not sure that’s true. I can’t off the top of my head think of a single global airline that attributes their profitability to offering a superior experience in economy. Cathay Pacific is bleeding money, and they have nine seats per row in economy. Singapore Airlines claims they haven’t made money on longhaul flights in a long time. American used to offer “More Room Throughout Coach,” but they found that people were’t willing to pay even a modest premium for more legroom across the board.
I can’t tell you how many people I hear complaining on and on about the boarding process at Southwest, or the lack of amenities on other airlines, or the bag fees, etc. while flying the very same airline because the ticket was cheaper.
As long as the general public bases their choice of airline on price, this is where airlines will compete, not on service.