Permafrost,
That's probably why BA will make a horrific loss this year and EZY will make a profit (despite the moronic fuel hedging).
eeeeeeeeeer, that's a bit premature. We MIGHT make a profit seems more realistic. A profit will materialize IF market conditions stop declining during the summer, and if fuel prices remain low, wich they won't (they've already increased 80% from their lowest). That's a big IF, believe me.
BA's loss comes from loss of revenue from the high-end passenger, not from the low end side. The business traveler still flies BA (despite what AH says), but in economy rather than business class. The so called flight to value isn't as significant as we like to think.
However I do agree with the rest of your post.