Precisely. I suspect CX knows the demand is there, and it's a question of either a.) charging AA more for those cheap AAdvantage long-haul F awards as Gongzuokang alludes to above, or b.) doing something like this, basically cutting back on partner availability.

I don't know enough about the economics to understand if it's acceptable / possible / etc. for CX to increase its cut from AA awards. But, I suspect there is some type of standardized OW agreement that prevents this and that's why CX is choosing the route they have. Personally, even as a DM, I have been unable to obtain F upgrade awards on a number of occasions in the last year, primarily on to/from North America flights. I'm not a fan of Instant Upgrades at the airport - particularly since the waitlist is RESET (grr..) on the day of the flight, and a new waitlist is created at the airport based on an elite-ranked, first-come, first-served basis. This annoys me a lot - I often show up to flights at the last minute, and despite maybe being atop the MPC upgrade award waitlist, Instant Upgrade awards favor people who have hours to burn and arrive early at the airport - but that rant isn't for here.

Here's an example from a few months ago: I waitlisted for an F upgrade award to SFO in the weeks before the flight, didn't clear. I am not a fan of Instant Upgrades due to the dynamic I describe above. Yet when I got to the airport near departure time, I discovered I was op-upped that flight to F, the very flight I had unsuccessfully tried to burn miles to upgrade on weeks ago. And upon boarding, I met a friendly gentleman and his wife who had burned AA miles for the flight for a vacation. This craziness is squarely on CX! I didn't mind in that situation, but I wish I had more predictability in knowing. By a.) releasing significant #s of partner awards very early, and then b.) having the Instant Upgrade waitlist reset, in essence they lost revenues from me trying to burn AM.

My strong suspicion - given the vastly inferior earn/burn ratio on MPC vs AAdvantage - is the $ revenue to CX from me burning Asia Miles is a lot higher than an AA award. So I wonder if CX is just doing the calculation that (x) amount of seats get used up by awards travel, both partner and Asia Miles, and a way for them to increase revenue is to see if there is greater demand among the MPCs to burn more miles at the expense of partner awards. It's also a nice way to enhance the value of MPC, something of a silver lining to mileage devaluation.