Each section of most planes bring in the same amount of money. So say you have 100sqft for seats the price is basically determined by 100sqft/seats. So while first class costs 10x much the 15 people in first bring in the second revenue as the 150 in economy.

The other consideration is that you'll likely not fill an entire plane if totally filled with economy seats so the price for everyone on an all economy flight would have to pay significantly more per seat to make up for the 60-80% capacity on basically 80% of routes.

I think you give markets way less credit than they deserve. Check out http://wonderfulloaf.org and see if you are persuaded.

Don't think there's anything wrong with markets per se, but implementation details are important.

Markets where some players have considerably more coercive power than others don't tend to produce good outcomes.