<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by avek00:
You keep mentioning "loyalty" as if it is the most sacred principle in the industry. Loyalty in and of itself does not pay the bills; Y-fares do. CO's post-9/11 strategy has been to engender loyalty amongst high-yield travelers, an approach that has been generating good results. Most lower-fare travelers choose airlines based solely on price anyways, and their "loyalty" is only as good for as long as CO has the lowest fare. Hence, it makes little sense for CO to waste resources on unnecessarily pampering low-yield pax.
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On the contrary, I submit that CO still has market share only because of the loyalty amongst the low-fare buyers because of the unlimited domestic upgrades. Take that away and you will see how far CO will get in the revenue department and market share. The only reason CO does not have huge deficit spending is because it has its cost structure for historical reasons is lower than the competition. You could have the exact same award/upgrade/pricing policies between CO, UA and AA and the latter would still lose money. Do not confuse cost structure with revenue gathering ability.
You continue to peg people into two categories - only low fare and only high fare. With that set of axioms, your "logic" leads to your conclusions. When you get in touch with reality, you will realize the logic is right but the axioms are flawed and hence the conclusions are flawed.