DD
That is a fair point about upgrades but I would be very interested to know, on a business orientated route, how many people sitting in First Class are "actually" paying for it themselves or if its part of the travel conditions of their employment. As has previously be mentioned before, the travel policies for this year were probably budgeted for prior to the new year, hence a certain reluctance or continued slow down in corporate bookings because of continued degree of uncertainty.
Many of the first class passengers I see on our airlines premium routes dont exactly look like they busted their a### to get the seat and probably couldnt give a rats about who upgraded from business and is sitting next to them. The fact of the matter remains for the airline that providing the product will attract a bum on seat regardless of wether it was from their own pocket or from the business kitty.
Airlines may break even with high economy loads and low yields, as was the case last year, but its the premium pax that make the profit. The airline can use the first class product in many ways as advertising, it even attracts the interest on economy class passengers and maybe further encourages business class paying passengers to fork out that extra grand or two for the first class experience.
At the end of the day you could have 300 pax down the back and every single one of them could have paid a different fare, yet you would never know it.