The problem is keeping that tail aloft (and out of the dirt, as you say!) costs money. In the current era, most pax don't want to pay for the 'tail'. Companies cannot afford it and nor can holiday pax. Those new companies that can provide a reasonable/tolerable service at a price that pax will pay? They have the pax.
Paxboy, I will give a couple of very recent and applicable examples.
- After about five years of absence from the Gold Coast, QANTAS has decided to return to it. People weren't really wanting to fly Jetstar, but had to as there was no real other choice other than Virgin, as they offered a premium product. Now that QANTAS will be returning with a premium product, many people I have spoken with say they will gladly fly QANTAS and should never have pulled out of the Gold Coast, and that's only a 1 hour flight from Sydney and a couple from Melbourne.
- QANTAS currently fly to HNL three times weekly. They're flying banged up 767's with 1990's IFE. All flights are very much full. When QANTAS pulls out, I am led to believe the passengers won't all go to Jetstar, but Hawaiian, who offer a premium product in newer aircraft, which happen to be A330's, just like Jetstar. There is no other choice on this Pacific run.
The initial cheap ticket price offered by LCC's, are very few and far between, because even the LCC's can't afford to run aircraft on the 10% or so of seats offered at the very low prices. In a lot of cases, by the time you add baggage allowance, movie, meal, blanket, ammenities kit, the price tends to be more than the premium ticket.
The current regime in QANTAS is changing the way they do things, but at the detriment of QANTAS and the benefit of Jetstar. QANTAS left with aging and old aircraft, Jetstar get new aircraft, and competing on the same routes.
No one is saying you shouldn't move with the times, but you can't take a European model and make it work in Australia. We have much further to fly to go anywhere internationally, especially from Melbourne and Sydney, where most of the traffic is concentrated,so people are prepared to pay the extra for their goodies on board. Companies are meant to increase market share and run profitably. This is not the way to do it.
People will tolerate bare minimum for an hour or so sector, but when you're talking 4, 8, 10 hour sectors, the sentiment changes.