Each Airline has a target to achieve in order to survive in this competitive market. In order to carry maximum passengers extra capacity is created to carry maximum passengers by designing new smaller seats.
However they also do have a superior clientele to cater to who wish a personal space , a super service , a lie flat seat , large displays and noise cancelling headphones. Nowadays they are focusing on sleep pods, private suites, massage chairs, showers and even a full sized bedrooms. And this is how the Airlines try to stay competitive by attracting maximum of this high end customers.