Originally Posted by ashill

Emphasis added. Though that's my instinct too (that premium transcon routes will have to reach a higher price before they stabilize profitably for B6), I'm a bit less convinced running numbers. B6 Mint gets 16 seats in front of the L2 door on an A321; B6 regular gets 52, VX gets 34 (8J), and AA non-transcon gets 38 (16J). So each B6 Mint seat takes (1/16) / (1/52) = 3.25 more floor space than a coach seat (a mix of regular and Even More Legroom), so you'd think that prices would have to stabilize at a point where they get 3.25 times more for Mint than for coach to be profitable (neglecting costs of the soft product, cost savings due to reduced weight, and lost ancillary revenue from coach passengers).

A domestic F seat takes about twice as much space as a coach seat (figure you get 5 rows of 6 Y into the space you'd get 4 rows of 4 F), so the premium has to be a factor of 2 or so to be profitable. That's not actually all that much space for an intermediate price. Now if flat bed business class stabilizes at more like 5-10 times the cost of coach (which I think is where it was for JFK-SFO/LAX before B6), there's definitely space for AS to charge 2-4 times as much as coach (including getting elites to upfare to higher coach fares for an upgrade into that average) and make a profit. But if flat bed business stabilizes at only 4-6 times coach, B6 could still make Mint profitable (and therefore keep AA, DL, and UA J in that price range) and AS really wouldn't have a lot of room to undercut them profitably with their intermediate product.

I started writing this post expecting to come down on the other side, but these total back-of-the-envelope armchair CEO [insert other pejorative term here; I'd be happy to be proven wrong by someone who has actually bothered with the real revenue data!] guestimates make me doubt that the transcon F market really will shake out in a way that supports AS's strategy. It really comes down to how small B6 is willing/forced to keep their margins on Mint.