Actually a good part of their customer base is.

They get about half of their revenue from "full" fares. This probably translates into those people who are "trapped" into flying the monopoly routes. (You know you're on one of those routes when the only fares offered work out to $1.00/mile or so...)

This is the "rock and a hard place" that they're stuck between vis a vis fare reform. They feel that there is a significant risk of cannibalizing the high revenue tickets without seeing a sufficient offsetting increase at the low end.

Some of us think that while those full fares are a lot of revenue they aren't a lot of tickets -- the point ought to be to give incentives for people currently buying V fares to buy a B or a Y fare. Immediate upgradability and increased flexibility are attractive to business travelers -- but when we currently weigh the costs vs benefits the costs far outweigh the benefits. So low price wins handily and the conversion of business travel to "leisure" fares continues.

OTOH if the gap weren't so wide the balance would tip the other way. The unknown is where is that tipping point? How many people will spend how much more if the gap is narrowed...

In the long run they also need to worry that the longer this gap stays in place the harder it will be to change it. They're reinforcing this behavior and institutionalizing it. Many companies now have explicit "lowest cost airfare" policies in place and procedures to enforce it quite blindly to other considerations. It's a much higher hurdle to pass than it used to be. The airlines like to blame everything on the internet making prices transparent and on the rise of video conferencing (which is bunk). I think though that one of the key technology factors that they're missing is that IT has made it much easier for the beancounters to put rigid controls on travel. That's probably been a more significant technology impact on business travel than being able to compare prices or buy a priceline ticket.