After about 55 years in the business, it seems to me that what's really happening long-haul, except to S America, is that established, maybe legacy, large and fairly well-financed airlines are beginning to turn their cattle-class cabins into "Loco" cabins, while they increase the yield from their other cabins by offering add-ons which are worth it on a 6 - 10 hour flight.
If this apparent trend is for real, there is no way that the locos like Norwegian can compete, in the medium long run. The analysis about Laker's Skytrain in previous posts is largely true, although what shot him down finally was huge debts in the wrong currency.
The big airlines can offer much greater frequency than a new loco on long-haul. They can also offer the little temptations that count for much more on a long flight. And they can take a financial hit at the cattle-class end while a competitor goes bust, just like BA did to Freddy Laker.
These thoughts are triggered by a last-minute 10-day trip we're doing next week for a shot of sunshine; BA from LHR to Abu Dhabi and back for 2 of us, just over £1,100 all-in. Now that's available on Etihad and perhaps others, but the difference is that with BA it's Premium Economy, because we value the extra space. If the food's good that'll be a bonus.
I simply cannot see how any airline could survive profitably long-haul with the kind of seat/km yield that BA and the others are getting from Economy, but for the whole aircraft with no revenue from Business, Club, First etc etc.
But I can see intense price competition developing among long-haul carriers for the low-cost market to fill the back half of the aeroplane.
I was once told, after a meeting at the White House in Dublin, that Ryanair reckoned to fill 70% of the aircraft at low fares, averaging at that time about 35 Euros per seat per flight, which was enough to make a fair profit on each flight. 20% went to "silly" promotional fares like £1.00 plus airport charges. And 10% went to last minute buyers in a hurry with no alternative, and that's where their enormous profits came from.
On long-haul that "loco" model won't work, because the market and the competition is quite different.