Business class on European carriers is a disgrace for the money paid. The pricing compared to SE Asia, Australia or North America is in the main higher. Compare the price of C from SIN-BKK with LHR-FCO, journeys of similar length and you will find the former is cheaper and the product far superior.
I really don’t think we as passengers should be worrying about the problems a fixed cabin would have for airlines. It’s their job to deliver a good product at a reasonable price and IMO they are failing to do that at the moment.
There is no reason why a fixed cabin should increase costs, it doesn’t on long haul where they use upgrades and downgrades to get around cabin size, the same would apply to short haul where upgrades have happened for years and on occasions whole cabin downgrades when the middle seat has been filled.
Selling upgrades rather than giving them away is proving quite lucrative I understand so the seats may generate a decent income that way too. Turkish seem to be making good money from their offering.
LH need to do something with their NEK seats. The differentiation of the product to and from FRA and MUC suggests that they have plans. If they, as Europe’s largest carrier decide to go ahead there will be little choice for others but to follow or kill off C all together on short haul.