Any airline should be continuously looking to reduce it's cost base - that way you make more (or lose less) than you otherwise would. The way for full service airlines to prosper is to differentiate themselves from low cost carriers, by offering a 'better' product than they do, whilst continuosly cutting their cost base. This is how BMW compete with Ford.
Right now economy class travel in Europe with a full service carrier is expensive and squalid. Business class travel in Europe is extortionate and (with a few honourable exceptions) marginally less squalid. Travel with a low cost airline is cheap and squalid.
Imagine an economy class European flight from Heathrow with:
- 30 minute minimum check-in
- No queue at the check in desk
- 30 kg baggage allowance
- Generous but consistently applied carry on allowance
- No queue for security
- A seat in the departure lounge
- An air bridge, not a bus
- Leisurely boarding
- 34" seat spacing
- On time departure
- Smiling staff helping passengers (not chatting)
- A decent meal, appropriate to the time of day
- Hot coffee
- Air bridge (no bus)
- Bag starting it's second lap of the carousel as you walk up.
Would I pay more for this than for a low cost carrier? Definitely! Would you be happier working for an airline that delivered this consistently day in day out? Almost certainly. Would the word get round? Like wildfire.