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Hunting for whales that won’t put up a fight on this, and catering to them specifically going further.
If I recall correctly something stupid high like 80% of their revenue from flights is from frequent travelers. These travelers are generally loyal to an airline because of the benefits from sticking with a network. I spent a year buying regular coach tickets and being upgraded to 1st class on all but 2 flights out of around 150 when I was traveling (I hit the top tier on the frequent traveler program)
The thing that this dumbass CEO is missing, is that these flyers are still on a budget and there is still some competition. The whales will swim away if you attempt to screw them over. This is why airlines have status matching programs for frequent travelers.