The problem is that you aren't the customer, your company is (they are the one paying the bill, just like mine).
Your company doesn't care about the service experience, they care about the fare.
Actually, I am the customer about 33% of the time. And I do care about service as well as cost - in other words, I'll pay a reasonable premium for good service.... but when the business class fare is 10x the coach fare it stretches the bounds of "reasonable".
And when I travel on business, the company allows me to choose the carrier within certain constraints (the only one I really get flagged for using is UA, but AA, DL, WN, B6, US, and other LCCs are fine). When I get to choose, I become the customer.
The airline pricing model is better than it used to be, but still not "right". Used to be that airlines would price for market share... a couple were known to put larger aircraft on a route & price at a loss to gain market share where a competitor was starting up.
Under regulation, the price was set by the government, and airlines competed on service. Now they compete on price, because the customers only care about price.
Pretty presumptuous of you. Some customers care about more than price. Now airlines compete on both price and service. There is a big push recently for airlines to add premium services.
Further, the frequent fliers are on company travel, and they only pay for coach. First class isn't primarily filled with people paying for first, but by frequent fliers getting upgraded.
While that used to be true, it is less so these days. No, they may not pay full asking price, but the airlines are effectively monetizing F. More than one airline has said "we won't charge less because we don't want to devalue the product", while at the same time they fill the empty seats with frequent flyers, enabling them to increase load factor in the back. One airline regularly dispatched international aircraft with the business class cabin half-full because they didn't want to upgrade folks and they couldn't find people willing to pay 5-10x a coach fare to sit there.
Certain airlines have realized that the problem is the price differential and are pricing the F cabin in-line with customer demand. And they're getting folks to buy up to the better cabin. I certainly will do that when the fare differential is not punative.
The model is not to have service at a level that gets people to pay for it, but to be nice enough so that business traveler to keep flying United (or AA, or whatever), but their coach fare still has to be low enough so the bean counters don't force the change to another airline.
The business model is fundamentally different.
There's much more that comes into play on the corporate level. Corporate deals drive some aspects (many corporate deals require that the traffic share to the airline be above a certain percentage, say 50%, in specified market pairs). Route networks drive part of it (which is why US and AA have been at a disadvantage compared to others).
Likewise, many companies permit the traveler to choose the airline provided the fare is within x percent of lowest (or the carrier is a corporate preferred carrier) - thus, they might permit a traveler to fly Southwest instead of UA provided that the fare is no higher on Southwest.
And yes, airlines have been focused on premium services. All of the international carriers have added or are adding lie-flat business seats. DL picks up some connecting passengers planeside in a Porsche & personally drives them to their connecting flights. AA has added premium check-in and pay-for 5-Star concierge services. Adding the services, pricing them right, and executing well are all entirely different matters....
