I think for mine the above is the minimum I expect of any airline I might fly with (well... not the row 3 thing perhaps
). So, assuming that all airlines I might choose to use provide the above, which one will I actually give money to on the day? Likely the one that treats me the best (in my biased view of course). Lounge food, along with a myriad other smaller and non life threatening things become part of my value judgement and is the opportunity for the provider to differentiate themselves from their competition.
Competition should drive standards upwards, not downwards as we so often see. When standards drop, even amongst otherwise competitive marketplaces, then the opportunity for new players is opened up. I used to fly QF exclusively (for example) and even had QP membership for a year. For me, they were the best player in the market at the time for my needs (this was back in the DJ era). Then DJ became VA as their own strategists must have determined that a viable market space had opened up due to QF complacence or other factors. Now VA gets close to 100% of my business. It wouldn't have cost QF a lot of money to retain my business by simply putting in a bit of effort - now they get almost none of my revenue - I see business making this apparent mistake all the time.
However, VA nowadays seem to be willingly participating in the shoulder to shoulder march to the bottom as far as standards go. They are not, today, maintaining the standard that they set a couple of years ago during the switch from DJ to VA. Given that both airlines are happy to drive to the bottom there isn't much incentive for me to switch camps at this time, but both airlines are creating a space for other potential players whether they realise it or not. Its a debate for another thread whether our particular market place can nourish 3 majors, but a similar process has happened over many years with international airlines.