Originally Posted by
televisor
Yes: most flyers are individual flyers anyway. Letting groups get seats together first gets all the problems out the way, if someone really has to avoid getting a middle then they can either pay to assign early, or risk missing out if they check in late. Note 1: you're not giving the groups better seats, you're just putting them together in a random location (I've never been anywhere near the front when in a group travelling on a european airline). Note 2: groups get their fair share of middles this way.
I'm not sure this is the actual algorithm, but somehow at checkin individually I've always been randomly assigned a seat, and at checkin for a group we've been assigned seats either together, or in groups of 2.
The evidence is that it works perfectly well. Boarding over there is much faster, and you don't get the typical US seat swap arguments happening down the back of the plane (which most of us probably don't see since we usually don't sit down the back much). The boarding speed is probably more thanks to carry on policies and customs, but not having seating issues helps.
What makes you think that most flyers are individual travelers? This would be highly dependent on the route. Note that business travelers sometimes travel in groups too and "need" to sit together in some cases.
In fact, it's likely that the individual travelers are much more likely to be elites and/or HVCs. Giving them seat assignments after families--meaning that your elite and HVCs get the worst seats--would be a great way to make your airline unattractive to the customers you want the most.