With due respect, this is entirely wrong. The BE passenger is valuable, because if UA did not fill up the plane (because that base load went to OALs) then they would not fill up the plane and would have far less reveue. If revenue management does it's job, each set of passengers (discount Y, close in Y, discount PE, close in PE, discount J, close in J) is profitable. If you miss on any of these groups at a set price point you either have to keep prices lower close in (losing out on revenue from those who would have paid you more) or go out with empty seats. Set your prices too high and you end up with empty seats.

The only difference is that the "discount" passengers are to some extent fungible, including in PE and J. If you set your prices low enough you will fill those seats, including with non-elites. (.e.g. all of my recent family trips in BE have been like this, we were not elites of that airline).

The valuable passengers are those who will elect to fly that airline at a higher fare, or even the same fare, which allows the airline to get to a higher fare bucket quicker, and those who are even more valuable are those who are usually flying last minute, and as such are paying higher fares overall. Both sets are almost always elite passengers.

I see this all the time on SFO-SEA, which is flown by AS, UA, and DL. I am happy to pay my first choice airline (Delta) more, but at times Delta will be a lot more and then I might take UA or AS when both work. E.g. recently the 5 pm flight back from SEA on Delta was $150 more, I took UA. But that I looked first at Delta, and as such fill their planes on a regular basis - including at high fare points near in to departure - is what makes me a valuable customer, and sense much of my travel is close in a very valuable customer.

Am I a whale? Some guy who buys full fare close in J tickets (at $10-12K). No. But these travelers are exceedingly rare.