Award redeemers aren't just a bunch of leeches though. Many have paid their dues with revenue flights (not all of those seats are credit card mile redeemers). So the airlines do get some value out of the deal.

The Asian carriers that still fly long haul F are largely state owned or have a large state investment anyway. A carrier like TG keeps F as a prestige thing and also for Thai VIPs (royals, government).

But I will agree that the advancements in longhaul C/J class cabins do make F a bit less necessary.

Good point, but some of the flights I can get for very cheap.
i.e. I have flown over 14K miles for $286.
And, there are the DEQM promos....
CX is owned by a private company (Swire)
OZ is a private company as well (Kumho Asiana)
But, both of these have some of the best F products in their respective alliances.
(SQ is better but SIN government plays a role in the airline)

I think the biggest thing is having a desirable product. A product people want to, and are willing to pay for. It's really the selling proposition for a Civic (Economy), BMW (Business) and a Lamborghini (First).

All 3 will get you there. A BMW will get you there very well. But what makes the Lamborghini worth buying are the prestige, the quality of the parts and the attention to detail. It's always the little things that differentiate between premium and ultra-premium. Everything being perfect, in it's place, and going above and beyond your expectations to surprise and delight.

That's how I would define LH's First service. United's service fails in almost all of those differentiating factors, which is why people consider it not worth paying the premium for. Lufthansa has roses at each seat and in the washroom. I seem to remember a UA higher-up scoffing at airlines that did that. LH ground services where they meet you at the door, whisk you through private security, wine and dine you, and then drive you to your aircraft, where they do it again. UA's total lack of ground services.

And yet the charge the same amount of money, because it's "First" -- are you surprised nobody pays for it?

Yes it's all about service. On the few F flights I've taken on domestic carriers the service just pales in comparison to foreign carriers. On average, domestic flight attendants seem to be more about policing things and wanting to do as little as possible, and would rather sit around and chat with their friends. Maybe if tipping became customary they would actually be attentive and pay attention to the needs of the customers.

It's like going to Denny's versus a Michelin star restaurant, except that the diner in this case (AA, UA, etc.) is charging 75% as much as the restaurant. I'll pay $20 for an omlette if it tastes good and get great service. I don't know what they're doing wrong; it can't possibly cost that much more to hire good people. Even if you subtract out 4x an economy fare to account for the lost space from a larger F seat, there's still plenty of fare left that should be able to pay for great service and still turn a profit.

It is quite true that US airlines offer many more redemption instruments for upgrades. Lufthansa's e-upgrades for Senators (one of the few foreign airlines that have them)? Two.

That being said, most other countries don't have anything close to the competitive landscape that the US has- the US doesn't have anything close to a flag carrier.

And yet Lufthansa is eliminating first class seats on their planes, and is switching planes to a C/Y format. So is Cathay Pacific- both airlines that get a lot of positive feedback on their F cabins. Singapore Air went to C/Y format on some longhaul routes years ago. It appears that even if you have a good product, in many markets, not enough people pay for it.

BA flies F to many destinations still....

Excellent point, hindukid!
F-class in this cases helps retain full-fare business class customers!
This has been confirmed more than once by my TA who serves several corporate customers flying paid business! And this strategy is not only employed by U.S. carriers.

Sure they do... but they put 14 F into cabins that other airlines put 6-9 F into, though. BA put some thought and additional personalization into the soft product compared to a C product, of course, but their F hard product isn't all THAT different from CX C when it comes to personal space (it's certainly not a suite like EK/TG/CX F). Which sort of proves the point. ;)

Well from my perspective, if and when they make these changes, they should reallocate some of that space to their economy and economy premium/plus sections. I would be willing to pay a little more if I had a couple of extra inches more between myself and the seats in front me. I felt like cattle the last time I did a TPAC with UA in Y. It was horrible.