Originally Posted by
orbitmic
Not quite as simple. The airline does not have 100 seats, it has, say 20 seats in J and 80 seats in Y (I'm making it two classes for the sake of simplicity). It could choose to remove, say, 5 seats in J which would be replaced by an extra 10 seats in Y, making the new configuration 15+90.
Now, if the airline knows that there is typically demand for 5 full fare J seats but 30 full fare Y seats, it will have to sell the rest of each cabin at discounted prices, and in the first configuration, it looks like it would have needed to discount J more (75% of seats need to be sold against only 62.5% in Y). With the proposed changes, it would "only" have to discount fares on 2/3 of J seats while bringing the proportion of discounted Y seats to 2/3 as well. This may (or may not) be the optimised revenue model for this route (everything depends on the margin that the airline makes on each seat, for each level of discount in each class of travel).
So in effect, reduction in the size of J cabins probably simply means that BA feel that they could increase their profit by increasing the Y cabin as there is strong demand for it, and answering that demand could be done at levels that are more lucrative than in J at the moment.
That is actually what I am saying in scenario 2. They will not sell as many discount seats as before therefore the price increases but they would only need to do that if the cabin becomes constrained. If the cabin is not constrained then they cannot charge more than they did before, on average. I am referring to J prices only since that was the OPs question.