I couldn't disagree more with the premise of the argument. My experience is that Canadians do not want to crammed into cattle cars.  They want to be treated with respect, servility, enjoy creature comforts(free pillows & blankets) have some legroom and friendly service.  
Yes there are those "economy minded" people who will sacrifice comfort for lower cost.
Airlines will use this cattle car logic to lower prices, slightly to attract more customers, then seeing a niche, they will reduce service on the mainline carriers, without the compensating price reduction
The real culprit are service charges, security charge and those lovely "airport improvement" taxes.
The biggest concern is what quality of flight crew can be attracted by "Payless air"?  Would I put my family in their hands, or worse some off shore contracted pilot with perhaps questionable credentials? 
Cause to ponder