Originally Posted by IAN-UK

In LH eyes the Y-class product is completely commoditised. Why offer miles and comfort when bulk traffic is driven by price? A passenger queueing thirty minutes for the lavatory might well be put off flying Lufthansa again, but who cares? There's an infinite horde of potential flyers waiting to grab cheap tickets. It's a lighter version the original Ryanair philosophy.

Premium economy will be the neat(ish) solution for those who would otherwise face the criminally expensive booking classes at the top end of Y. Of course, the downside will be diversion to premium economy of cheapskate bums from C-class seats. Indeed, as you say, the big gamble is maintaining demand for the business-class seats at current fare levels in the face of a weakening product.