Manufacturers are narrowing seats. Any possibilities for price cut? To squeeze more profits from each plane, the airline industry in the
  last few years has begun to install extra rows of seats,  leading to a
  crunch in legroom that has sparked tiffs and feuds among frustrated
  passengers. (Source)


.


  Airbus has suggested 3-5-3 configuration for A380, making airlines
  have many extra seats.Source


A similar plan is there for the B777. Is it likely that airlines will pass on some of greater earnings to their passengers, in return of the lack of comfort?
You will likely not see a price cut, but you also might not see a price increase.

Seat pricing (along with just about any other service in a competitive market) is a complex function of actual cost to the company + desired profit + market factor. The last one is the difference between what they want to get and what the market is willing to pay. It is sometimes negative.