I think that you are right. BA have become more expensive in Europe in both cabins.

There are still some good deals to be had, especially out of LGW, but overall I am sure that BA are now more expensive than they were when I was flying around Europe (in CE, but I looked at ET fares) 3-4 years ago.

It is quite a sensible strategy if you think about it. There is no point really trying to compete with FR and U2 on price because you will never win. And most of the LCCs' volume comes from induced demand due to low fares rather than cannibalisation of market segments who prefer to fly BA.

I believe that BA and other European carriers made a big mistake trying to combat the LCCs on price. It led to plummeting yields on traffic that BA would have carried anyway, reducing revenue and leading to cost cuts introduced to keep the service economic at the new yields. They would have been better off keeping key segments at high yields rather than attempting to capture huge numbers of low yield passengers.

Of course that does not mean that low fares should not have been introduced. After all that is what yield management is for. But they should not have been sold in the quantity they were sold at.

If the market size expands from 2,000 to 10,000 is it better to accept a 41% fall in market share to 9% share at $500 rather than retain 50% share at $75.