By this logic, why would airlines even have economy class? Why not just fill whole plane with first clas seats?
The answer of course is that there isn’t enough demand for first class seats, so airlines just fill the remaining space with cheaper, lower margin product. Exactly the same will apply here: if they try to upgrade the whole cabin to this scheme, and try to charge premium prices, other airlines with lower prices cannibalize their customer base. Solve for equilibrium.
Have in mind that I’m not talking about first class. Most airlines nowadays have a medium class with a little bit more leg room and maybe like a complimentary alcoholic drink.
Every time I fly, that class is full.
If this layout gives you an efficient way to increase the capacity of that class without sacrificing the economy capacity that would totally make sense for the airlines, even if they don’t sell that class fully in each flight.
I don’t know if it’s technically feasible since I know airplanes have some weight limitations, but in theory this would be a way to have more seats for a class that is expensive but not prohibitive to the economy passenger.
That class is always full because they bid the price lower and lower offering upgrades to existing passengers and then, if all else fails, they will upgrade status fliers to it for free.
The answer of course is that there isn’t enough demand for first class seats, so airlines just fill the remaining space with cheaper, lower margin product. Exactly the same will apply here: if they try to upgrade the whole cabin to this scheme, and try to charge premium prices, other airlines with lower prices cannibalize their customer base. Solve for equilibrium.