While I see her point of view and everyone is entitled to parent in toer own way, personally it’s something I would never do.
My child is scared of flying, so to put her some where else in the plane away from parents would be hartless. However if her kids are sensible and mature enough to deal with flying in a separate section of the plane, then fine.
I completely disagree with her for the reasoning of cash saving and it being one of life’s lessons though….
Do her kids travel in a separate cheaper car? Or live in a separate cheaper house? Do they eat cheaper meals? Go to the local comprehensive? Etc. Etc. Etc. If she wants to save cash they should all be in economy class or take turns.