But today's New York Times also reports that some airlines are upgrading seating, particularly in premium sections, as they try to hang on to some of the most-valuable passengers they've got.
The Times says "even struggling airlines like American say the first-class cabin is an important tool for keeping its highest-spending customers loyal." It quoted Richard Hedges, a London-based spokesman for American, who said: "We use our premium cabin as an incentive for frequent fliers and corporate accounts."
Airline ticket prices, of course, are a great example of what economists call price discrimination: Someone who pays $2,110 for a first-class seat gets from New York to London just as fast as someone paying $812 for an economy ticket. The only difference is the first-class passenger is paying more than double the economy price. To justify that kind of price premium, airlines have to create a premium experience.