Off the top of my head, the only loco airlines in Europe who do not currently offer allocated seating are Easyjet, Ryanair and Wizzair. There may be more (BMIbaby?) but I've never flown with them. In some respects it's relatively rare not to offer it. It's just that the large volume of passengers they collectively carry make 'the scrum' seem more normal than it actually is.
Air Asia made the move to allocated seating on their short haul operations a few years ago. It didn't make that much of a difference to the length of time boarding takes, but it did make the process much less stressful. Personally I feel that this makes good business sense. Less stress equals more happiness, which equals more repeat custom, which equals fatter bottom lines. It could also be argued that happy passengers are more likely to part with cash once the aircraft is airbourne. Allocated seating is also a unique selling point which would distinguish Easyjet from several of its competitors.
Moving to allocated seating allowed Air Asia to start exploiting other ancilliary revenue streams. Apart form the obvious (charging pax to select seats), Air Asia started offering extras such as hot meals, tax free shopping and inflight entertainment during the booking process. Such a move would be difficult without allocated seating as cabin crew would not know who had ordered what and where they were sat.
Hypothetically, if Easyjet were to go down this path I feel that it would compliment their business model perfectly. They mainly fly between principal airports and have been increasingly innovative in their approach to competing with the old legacy carriers for business customers. Following their acquisition of GB Airways they have also penetrated the old 'bucket and spade' market. Loco airlines became as successful as they are by unbundling all unnecessary costs in order to make the basic ticket price as cheap as possible. The next logical step would surely be to allow passengers to pay to rebundle some of these extras if they so wish...
Imagine how full circle the market would have come if the only short haul airline in Europe which offered a full three course meal with champagne and hot towels was Easyjet! Granted, you'd have paid for it, but isn't that what loco airlines are all about? Even I'd shell out a small fortune every now and again if it meant experiencing air travel the way some of you old timers here on PPRUNE keep telling me it used to be!!
