Good point — I think that we’re at the top of the current cycle given that carriers are reinvesting their profits in onboard experience and revamping their lounges (UA, AA, DL, LH, CX are all doing so). You’re starting to see a shift from the “well lets just buy more airplanes!” (and throw them on marginal routes that tank when the economy hiccups) mentality that caused the bankruptcies in prior cycles. Experiences are generally cheaper than fixed assets to buy and implement — so expect more differentiation — perhaps we’re finally exiting the Model-T era!

Sure — in fact it looks like Delta is going to heading more down the segmentation path – http://www.startribune.com/airline-classes-turn-into-segments-with-greater-variety-of-prices-features/408080486/

As for the food/beverage experience you suggest, I’ve long been a proponent of airlines “localizing” their offerings, but I’d stick more with partnering with local businesses to offer products to the entire plane, rather than trying to customize for everyone. I’d be willing to bet, for example, that a DFW-area restaurant would be willing to cut AA a good deal to supply a portion of the F meal for flights departing DFW.

During the 2008-2010 recession, carriers had to differentiate – as well as lower prices – to get people traveling again. I wonder where we are in the cycle amidst all this economic uncertainty, because I think that will be the primary driver for how quickly airlines adopt these innovative policies (you pick the order of your next elite perk, etc).