MU and HX charges $600 HKD on their regional routes for last-minute upgrade. Like I said, MU and HX are selling their C-class seats straight-up just fine.

The theory that cheap upgrade fares will discourage C-paying pax is as delusional as the revamped MPO will attract more premium passengers.

Again, most C-class pax are paid by company, and they are not going to get upset and fly another airline just because they realized more and more people are grabbing the last seat at minimum charge.

Or the idea that people will buy Y and wait to cheap upgrade into C. Again, if being paid by the company, they are not going to buy Y, they are buying C.

Will there be people that are paying out of pocket in C that gets upset and flies another airline instead? Sure. But they are far and few in between and the revenue made on cheap upgrades more than compensate for their losses.