Are US Ultra Low Cost Carriers In Big Trouble?

Are US Ultra Low Cost Carriers In Big Trouble?

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It has been a fascinating few years for the airline industry. In early 2020, many wondered if the airline industry would ever look the same. Fortunately here in the United States, airlines saw a faster than expected recovery in demand, and have largely seen record revenue and record profits.

For a while, it seemed like airlines were unstoppable, with seemingly no limit to consumer demand. The tides seem to have turned in recent weeks, though, as air travel demand is finally softening, and in an uneven way.

I wanted to discuss that in a bit more detail…

Frontier Airlines CEO issues dire warning

The Wall Street Journal has a story about how “revenge travel” has fizzled for budget airlines in the United States. Frontier Airlines is one of the biggest ultra low cost carriers in the United States, and CEO Barry Biffle made some pretty alarming comments:

“You’ve got fuel, capacity and demand all headed in the wrong direction. We’re kind of the canary in the coal mine.”

For those not familiar with that phrase, it’s defined as “an early indicator of potential danger or failure.” The legacy airlines aren’t seeing similar patterns, though. United Airlines CFO Mike Leskinen said “we have not seen any dramatic change in bookings,” and also stated that “we’re scratching our heads” regarding what’s going on at ultra low cost carriers.

Frontier Airlines’ CEO has issued a dire warning

Why ultra low cost carriers are struggling so much

Why are ultra low cost carriers suddenly finding themselves in so much trouble? Well, it’s a combination of factors:

  • While there has been a huge recovery in leisure travel demand, the biggest growth in summer demand has been for transatlantic flights, which is a market where ultra low cost carriers don’t compete; summer is the busiest season for leisure travelers, yet domestic demand hasn’t grown as much
  • While demand for domestic travel is finally exceeding pre-pandemic levels, capacity is also up considerably, as many airlines have continued to grow their fleets
  • As we’ve seen demand grow since the start of the pandemic, what’s perhaps most noteworthy is how much demand has grown for premium seats, as that’s where the major airlines are doing best
  • While there’s not a single socioeconomic group that flies with ultra low cost carriers, many people who may usually fly with these airlines are feeling the impacts of inflation more than others, and might be choosing to travel less
  • As the increase in demand is slowing down, the “big three” US carriers are also lowering their airfares, which makes it hard for ultra low cost carriers to differentiate themselves
  • The ultra low cost carriers don’t have nearly the revenue from their loyalty programs that the legacy airlines do, and that’s one of the biggest profit centers for some airlines; people want to flex with Sky Club access, not with Frontier or Spirit elite status (as valuable as it can be!)

Honestly, it seems to me like ultra low cost carriers are in a really tough spot. They can’t capitalize on premium demand or loyalty programs. They can’t capitalize on transatlantic demand. And they’re facing the reality of much higher labor costs, all while supply across the industry continues to increase, outpacing demand.

Low cost carriers face a lot of unique challenges

Is the JetBlue & Spirit merger really worth challenging?

As most of you probably know, JetBlue intends to acquire Spirit, but the Department of Justice is suing to block the merger, arguing it’s bad for consumers. The trial for that actually starts next Monday, October 16, 2023. The concern is that it would eliminate an ultra low cost carrier competitor in the industry, as seats would be eliminated.

I can’t help but wonder if the logic behind this objection shouldn’t be rethought at this point, with how the industry has evolved? Consumers are speaking, and they don’t seem to want to fly ultra low cost carriers. Frontier and Spirit are doing their best to sell seats, and they aren’t able to do so profitably at the moment.

JetBlue’s argument in favor of the takeover has been that it’s more valuable to consumers to have a sizable fourth competitor to the “big three.” As time goes on, I can’t help but feel like that’s actually true. The major carriers have increasingly competed with ultra low cost carriers on price, so it’s not like we wouldn’t have low airfare in many markets if Spirit weren’t around. They also have a lot more revenue opportunities, though, by offering passengers a wide array of travel options.

Heck, many of the reasons that ultra low cost carriers appear cheap is because they charge you for everything individually, rather than including some things in the fare. The Biden Administration is simultaneously trying to tackle junk fees (which is awesome), while also trying to preserve airlines with fully unbundled fares.

Telling an airline “hey, your business model may no longer be profitable, but too bad, you’ve gotta keep doing it,” just doesn’t seem like a good argument at this point. And while I think there’s a lot of room for innovation in the US airline industry, it’s not like the US only has one or two airlines. Heck, we’ve seen two new ultra low cost carriers emerge since the start of the pandemic.

I’d argue that JetBlue has long been one of the best value carriers in the United States, with free Wi-Fi, seat back televisions, complimentary seat assignments, free snacks and drinks, and more. Now if only the airline could run an on-time operation…

Is JetBlue’s takeover of Spirit really worth objecting to?

Bottom line

Ultra low cost carriers are in a tough spot, with Frontier Airlines’ CEO saying that fuel, capacity, and demand, are all headed in the wrong direction (and that doesn’t even address labor costs). The reality is that ultra low cost carriers are facing challenges that other carriers aren’t, and I think many of these problems are unique to the United States.

One has to wonder what the future holds for ultra low cost carriers. With regards to JetBlue’s takeover of Spirit, it seems to me like more than ever before, the government shouldn’t be blocking this takeover. The ultra low cost carrier business model just isn’t resonating with consumers in the United States. With capacity in the industry expected to significantly increase in the coming years, it’ll only get worse.

What’s your take on the ultra low cost carrier situation in the United States?

Conversations (115)
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  1. TJ Guest

    Then way was I bumped on 2 oversold flights on Frontier last week???????

  2. Andre Libert Guest

    I truly believe Alaska will swallow another ULCC!

  3. Greg jones Guest

    I think the masses of recognize that these airlines such as Frontier and Spirit Cater to trailer trash. Most travelers want to stay away from this trailer. Trash type environment for fear of violence on board the aircraft, which receive every day on Facebook videos period these are classless people that should be riding a bus but yet they're in the skies and I for one will never go near 1 of these discount airlines. I don't care if you give it to me for free.

  4. AGHadden Guest

    In my experience, ULCCs aren't low-cost. The latest data point coming from today. Saw a low fare on Frontier for a trip my sons are taking (DEN-PVR), but after adding an exit row seat and a checked bag for each, Frontier was $140 MORE per person than United Economy PLUS--both direct flights, approximate same time. Sorry, these aren't even comparable products. UAL Economy plus is superior to anything Frontier offers, and they wanted MORE. The...

    In my experience, ULCCs aren't low-cost. The latest data point coming from today. Saw a low fare on Frontier for a trip my sons are taking (DEN-PVR), but after adding an exit row seat and a checked bag for each, Frontier was $140 MORE per person than United Economy PLUS--both direct flights, approximate same time. Sorry, these aren't even comparable products. UAL Economy plus is superior to anything Frontier offers, and they wanted MORE. The stripped-down fare from United would have been even lower. ULCCs are failing because it is too much money for a bad product, and everyone can comparison shop.

  5. Alex Guest

    It would be foolhardy to think that the industry has changed forever. At some point, no matter how long in the future, the majors will get capacity back under control, and airfares will go back up. Then we'll be wondering why the B6/NK merger was approved in the first place. Remember that B6 wants to eliminate NK so it can raise fares, and this all bodes badly for consumers, even if you never fly NK.

  6. S D Guest

    These airlines are loosing money because of how their staff treat customers and all the extra fees. These things alone are what is driving people to bigger airlines. It's not that people can't afford the bigger airlines they just choose to save on cost. Now Frontier and Spirit extra fees added to flight are starting to be equivalent to JetBlue or Amerrican. So it doesn't take genius to figure out if they paying the same...

    These airlines are loosing money because of how their staff treat customers and all the extra fees. These things alone are what is driving people to bigger airlines. It's not that people can't afford the bigger airlines they just choose to save on cost. Now Frontier and Spirit extra fees added to flight are starting to be equivalent to JetBlue or Amerrican. So it doesn't take genius to figure out if they paying the same as big airline you might as well fly with larger airlines and be treated a little bit nicer, have free wifi, and not paying for snack in flight as well. Only thing that's a cost is alcohol.
    Frontier Airlines staff that check you in are horribly rude, and Spirit gate staff get nasty if your bag is over the size limit. I use to fly Frontier and Spirit but now they're my last option, I'll check Jetblue and American first before making a purchase. Jetblue has had a lot of delays the last 3 times I flew major delays, and the 3rd one end up exchanging ticket for American. Honestly due that experience will rather fly American or Delta going forward.

    1. Alan Billingsley Guest

      Post pandemic has provided a golden age for the majors. Supply constraints on aircraft and crews plus huge uptick in Demand = profitability plus the ability to invest in new aircraft and upgrades to services and the hard product. Plus long awaited wage increases. Airlines will face headwinds as demand slows as capacity continues to increase.

      I look forward to lower premium fares later in 2024!

  7. ChadMC Guest

    Maybe, just Maybe it's a good thing. Do we REALLY need all of the (cramped) seats available? Do we REALLY need so many duplicative flights between markets per day? Do we REALLY need to have ridiculous $9 fares (easily with hidden add on fees of course)? Maybe prices should double. Triple even. Remove some seats. Remove some flights. Airports are beyond packed at this point. Maybe we just need some actual reduction inservice. Some price...

    Maybe, just Maybe it's a good thing. Do we REALLY need all of the (cramped) seats available? Do we REALLY need so many duplicative flights between markets per day? Do we REALLY need to have ridiculous $9 fares (easily with hidden add on fees of course)? Maybe prices should double. Triple even. Remove some seats. Remove some flights. Airports are beyond packed at this point. Maybe we just need some actual reduction inservice. Some price adjustments may not be all that bad actually. We're never going back to the golden age of travel, but today it's worse than misery and possibly as pleasant as an old greyhound bus.

    Just to contemplate what fewer seats, fewer flights, and far less crowding would look like at airports and hotels.

  8. joey. Guest

    Jetblue is not not value airline is 3 times the price of Spirit and bad service.

  9. Sara Smith Guest

    Great article. However, you're still forgetting the brand / category damage done by camera phones.

    When you see ShaShaSha and L-a fight at the gate with your very own eyes, you reconsider. Because then it's about your personal security.

  10. T w Guest

    I've always had fair luck with fontier, the other airlines always had some new karmic way to make me suffer. But still don't understand how they can make money being so cheap. I even paid for a seat selection just to feel like they'd make at last $30 lol.

  11. Ferdinand Magellan Guest

    Answer: no. The low-cost carriers price very low -- a business-class seat on Spirit is almost always less expensive than an economy seat on United/Delta/American. They have plenty of room to raise prices, and they will, unfortunately, for their customers.

    If they ever work out how to provide reliable internet, there will be no complaints.

  12. Vinay Guest

    It's hilarious that Ben had to look up what "canary in a coal mine" means! Even after quoting the definition, I'm betting he still doesn't understand the actual reason behind the saying.

    1. Mark Guest

      He didn’t have to look it up. He was explaining it to readers who might not be familiar with the phrase, especially since there are readers from around the world.

      It’s “hilarious” that you didn’t know that.

    2. AGHadden Guest

      Well, if he wrote it, and then felt he needed to explain it, he should have chosen different words. That's 101-level stuff.

  13. Andrew Diamond

    “But the Department of Justice is suing to block the merger, arguing it’s bad for consumers”

    I don’t have a position on that, but I find it odd how selective the DoJ is at antitrust attention.

    - Virtual monopolies on internet connections in the US? (Try switching your cable provider.) A-OK!
    - Insurance-owned-everything in the healthcare space? As long as they’re profitable!
    - Massive fast food consolidation paired with 20-50% price...

    “But the Department of Justice is suing to block the merger, arguing it’s bad for consumers”

    I don’t have a position on that, but I find it odd how selective the DoJ is at antitrust attention.

    - Virtual monopolies on internet connections in the US? (Try switching your cable provider.) A-OK!
    - Insurance-owned-everything in the healthcare space? As long as they’re profitable!
    - Massive fast food consolidation paired with 20-50% price increases in 2 years? (As long as Arby’s has the meats!)
    - Consolidation in grocery leading to very obvious increases in prices? (All good!)

    But an airline merger is a big deal for them. I simply don’t get it. There must not be enough kickbacks somewhere…

    1. Sean S. Guest

      None of what you are talking about is anti competitive due to mergers however.

      1. Internet and cable providers have high capital requirements, which is why significant competition has not come until recently with the advent of cellular network improvements (Both Verizon and T Mobile are constantly sending me fliers telling me to switch to their 5G home internet). Also you forget that Ma Bell was broken up because it WAS a monopoly.

      ...

      None of what you are talking about is anti competitive due to mergers however.

      1. Internet and cable providers have high capital requirements, which is why significant competition has not come until recently with the advent of cellular network improvements (Both Verizon and T Mobile are constantly sending me fliers telling me to switch to their 5G home internet). Also you forget that Ma Bell was broken up because it WAS a monopoly.

      2. Health insurance and health care service are generally not merged together, and so the question of a monopoly doesn’t even arise. Do the two sides negotiate and contract between each other? Yes, but again that doesn’t define a monopoly or being anti competitive per se.

      3. Groceries makes even less sense. There are a million different producers for any given market segment, a million different distributors, and a million different retailers. The increase in prices in groceries is a product of commodity prices that underpin the system, not because of market consolidation. I have can easily go to Target and get a box of cereal for two dollars less than the local grocery chain down the street.

      Also if you want to really know why antitrust enforcement has taken a dive look into Robert Bork, one of the most prominent judges who shifted the case law on how anti trust and anticompetitive control of markets is defined, to the detriment of consumers.

    2. Andrew Diamond

      1. Since you brought up cell phones: Bell being broken up 41 years ago doesn’t mean “the problem is solved.” Subsequent mergers in the industry (most recently between Sprint and T-Mobile) have all somehow passed the sniff test. And if you’ve been watching closely, plans have increased routinely since the last merger - removing credit card payment options (or penalizing using them) is now the norm. Lots of ways to reduce consumer welfare, they are...

      1. Since you brought up cell phones: Bell being broken up 41 years ago doesn’t mean “the problem is solved.” Subsequent mergers in the industry (most recently between Sprint and T-Mobile) have all somehow passed the sniff test. And if you’ve been watching closely, plans have increased routinely since the last merger - removing credit card payment options (or penalizing using them) is now the norm. Lots of ways to reduce consumer welfare, they are succeeding.

      2. You should read up on Optum/United Healthcare (which is an example of this vertical consolidation ) and Express Scripts. 70k physicians work for the former. If that doesn’t feel like market consolidation, I’m very curious what your definition is.

      3. There are a million names, but there are only 5 companies that own 60% of the market, and it’s about to be 4 since Kroger and Albertsons are merging. (Remember, Safeway and all their properties are already owned by Albertsons.)

      With all that said - I am interested in that book, will check it out for my next Audible. Thanks for the rec!

    3. Vinay Guest

      Airlines all have to be regulated by the FAA which is why they're always at the front and center of DOJ attention (both FAA and DOJ are part of the executive branch).

      State level anti-trust cases happen all the time - its just not something you're going to see on any major news network or blog like this.

      You still have a "cable provider", which is why you're not really understanding how easy it is...

      Airlines all have to be regulated by the FAA which is why they're always at the front and center of DOJ attention (both FAA and DOJ are part of the executive branch).

      State level anti-trust cases happen all the time - its just not something you're going to see on any major news network or blog like this.

      You still have a "cable provider", which is why you're not really understanding how easy it is to get a fast, competitively priced, fiber optic internet connection. I live in the middle of nowhere, population 5,000, and I have at least 3 choices for high speed internet between fiber optic and others. Don't forget about starlink too.

      100% agree health insurance is a scam but there's plenty of competition in the outpatient setting. your 3rd point about fast food makes me a little skeptical of your daily habits/lifestyle and is probably the reason you're so mad about health care costs.

      Your last point about grocery "consolidation" made me realize you're a total moron and can't even understand the basic concept of inflation. Again, in my small town, we have 2 large grocery chain options. there's no consolidation. You pay more because of inflation.

      When a country prints trillions of dollars and hands it out over 2-3 years to everyone, this is the inevitability.

      Your 4 comments basically nailed the exact problem with most people. Couch surfing on WiFi, eating door dash, falling ill and staying bitter.

    4. Andrew Diamond

      Vinay - It's kind of amazing how many things you can use deduction and be incorrect about, but the raging confidence builds a story that apparently aggravates you to the point where I get called names.

      I'm done. Enjoy your life.

    5. Vinay Guest

      Nothing aggravates me in life. I also don't rage about anything. These are Beta Male qualities you are probably familiar with.

      Being called a moron is not an ad hominem attack. It's simply having an IQ in the 50-75 range. At least be glad you're not an idiot (<25) or an imbecile (25-50). My life is awesome, I will enjoy it. thanks.

    6. OCTinPHL Diamond

      @Andrew:
      - the 20-25% price increase in fast food is 99.9% due to commodity increases, not consolidation.

      - same with groceries. Supermarket margins are extremely thin - often less than 3%. I’m not saying that I’m in favor of the Kroger / Albertsons merger (neither of which service my region) but the price increases have very little to do with consolidation.

      I don’t disagree with you on healthcare. Vertical integration makes it...

      @Andrew:
      - the 20-25% price increase in fast food is 99.9% due to commodity increases, not consolidation.

      - same with groceries. Supermarket margins are extremely thin - often less than 3%. I’m not saying that I’m in favor of the Kroger / Albertsons merger (neither of which service my region) but the price increases have very little to do with consolidation.

      I don’t disagree with you on healthcare. Vertical integration makes it incredibly difficult for local pharmacies to compete with national chains, small hospital systems are facing bankruptcy due to insurance reimbursements being cut.

    7. Andrew Diamond

      OCTinPHL - noted and after reading that does make sense. Thanks.

  14. Heinous Guest

    Interesting situation. In Europe, ULCCs (Ryanair, Wizz) are thriving.

  15. Marc Guest

    Spirit being eliminated would be bad. When you achieve Gold by miles or match, it's basically SW lite. One 50lb checked bag, one carry on (and personal item), seat selection, snack/drink...etc. All that comes at a fraction of anyone. Richmond to Vegas on SW, $311. Spirit, $57, and non-stop! Plus, likely South American routes like Lima would be killed off (remember SW wiping out Bermuda after the AirTran acquisition). Don't get me wrong, I'm SW...

    Spirit being eliminated would be bad. When you achieve Gold by miles or match, it's basically SW lite. One 50lb checked bag, one carry on (and personal item), seat selection, snack/drink...etc. All that comes at a fraction of anyone. Richmond to Vegas on SW, $311. Spirit, $57, and non-stop! Plus, likely South American routes like Lima would be killed off (remember SW wiping out Bermuda after the AirTran acquisition). Don't get me wrong, I'm SW A-List Preferred, CP holder, AA Platinum...etc., but Spirit is amazing and would be tough to lose with their coverage. Even without Gold, there's creative ways to travel light, and if it's quick trip, totally the right choice!

  16. The Alchemist Guest

    They need to improve their service to decent levels. The Frontier customer service is downright despicable. If anything goes wrong, forget about any help. They are so rude to customers at the airport, and now force any followup to go through a horrible online chat as the only option. Treat customers like a normal airline does and you will do better.

    1. S D Guest

      You absolutely correct, very rude!

  17. Oxford Guest

    After choosing a seat and paying for a carry-on, Spirit and Frontier are usually more expensive than their competition. "Low cost" or "Ultra low cost" are the wrong words to describe them. Why pay more for less?

    1. Brian Guest

      Most Spirit and Frontier paxs dont pay for carryon. Zone One boarding is small compared to the plane's total capacity on Frontier.

      Although ULCC model isnt my favorite, they fly to my secondary airport with non stop service that the legacy carriers do not offer. Allowing people that live on the margin to fly a basic economy ticket and serving airports that the legacies dont, there is a place for them in the market.

  18. justlanded Guest

    Successful CEO's set a positive tone for their company's employees, customers, and their interactions, even in the face of the inevitable challenges that all businesses face.

    A fish rots from the head down...

  19. Exit Row Guest

    If you call Southwest a discount carrier, It's doing fine in the current environment. Maybe the issue with Frontier & Spirit is their mistreatment of customers. I've seen cattle treated better!!
    Also, the Frontier & Spirit crowd is more likely to be a younger crowd burdened with student debt which is payable again or working class PAX whose wages have not kept up with inflation. What helps Southwest is frequency (very lacking with Frontier,...

    If you call Southwest a discount carrier, It's doing fine in the current environment. Maybe the issue with Frontier & Spirit is their mistreatment of customers. I've seen cattle treated better!!
    Also, the Frontier & Spirit crowd is more likely to be a younger crowd burdened with student debt which is payable again or working class PAX whose wages have not kept up with inflation. What helps Southwest is frequency (very lacking with Frontier, Spirit, Breeze, etc.) and the ability to draw a business class customer.
    Also, as alluded to in your article, all the airlines expanded like crazy post COVID. Now the surplus capacity with the flat demand has come to roost. I pity the most recent hires (gate agents, pilots, back office, ground handling) who will get the pink slips in a bargaining environment. For non bargaining, most employment contracts are fire at will.
    But that has been the nature of the airline business since the first flight....FEAST or FAMINE!!
    Very little of a happy medium!!

    1. Brian Guest

      Southwest is not the same as Frontier or Spirit. Due to WNs size, they bennifit from economies and the scale of Rapid Rewads is a much more lucrative loyalty program compared to the other ULCCs

  20. Jake Guest

    It's always about the product and not the price. Cheap fares only go so far when the product is terrible. It's like any other business. If you sell a bad product or service, the price eventually doesn't matter.

  21. Nathan Guest

    I finally quit flying Frontier for good this year. They finally made it that bad. It chafed me pretty hard when their gate agents started getting pissy about putting every carry on in the sizer, and seeing the poor kid in front of me break his skateboard in half. But what finally broke the camel's back was when they delayed then cancelled a Friday flight for a weekend trip. There is no phone number; only...

    I finally quit flying Frontier for good this year. They finally made it that bad. It chafed me pretty hard when their gate agents started getting pissy about putting every carry on in the sizer, and seeing the poor kid in front of me break his skateboard in half. But what finally broke the camel's back was when they delayed then cancelled a Friday flight for a weekend trip. There is no phone number; only chat. And the agents have no ability to come up with creative accommodations. The only options they could give me were to fly Sunday morning (my return flight was the same day) or to drive to Las Vegas from San Francisco to catch a flight from there to Denver. Customer service is non-existent. I vowed and have kept my vow not to fly them ever again. This after flying them pretty consistently for many years.

  22. Randy W Guest

    I think the rising costs of living are just catching up to travel now. The war against the working class is starting to take its toll, between rising rents, utilities, groceries, people are tightening the belt and leisure travel is thaking the hit.

    There's also another situation at play to consider - with many businesses are trying to force remote workers to return to the office, those workers are quitting in droves for the allure...

    I think the rising costs of living are just catching up to travel now. The war against the working class is starting to take its toll, between rising rents, utilities, groceries, people are tightening the belt and leisure travel is thaking the hit.

    There's also another situation at play to consider - with many businesses are trying to force remote workers to return to the office, those workers are quitting in droves for the allure of remote work with another company. Switching companies often comes with minimal if any vacation days for the first year of employment.

    What airlines like Frontier need to do is include the first checked bag free per traveler. That alone would be enough to smooth over the other a la carte pricing.

  23. Tim DeVries Guest

    The reality is everyone is sick and tired of US ULCC delays, cancelations, staff shortages, fees & charges for everything.

    1. Donna Diamond

      This might work in Europe but I’m glad it’s struggling here. In the end, how much is your time and comfort worth?

    2. Brian Guest

      What is the difference between a basic economy ticket on a legacy carrier vs flying an ULCC? They both you the same thing.

    3. OCTinPHL Diamond

      @Brian - when a ULCC cancels a flight you are often SOL. The next flight might be in 24 hours. Or more. On a legacy there are often multiple flights a day.

  24. Jared Guest

    I’m struggling to see the difference these days the full service and these ULCCs if flying in the main cabin. US and EU full service domestic airlines are a scam and a fraud. The only difference is that a legacy airline has a better probability of getting the passengers to their destination. Otherwise they are a scam and a fraud. The only thing I can say is that the ULCCs and the legacy carries automatically...

    I’m struggling to see the difference these days the full service and these ULCCs if flying in the main cabin. US and EU full service domestic airlines are a scam and a fraud. The only difference is that a legacy airline has a better probability of getting the passengers to their destination. Otherwise they are a scam and a fraud. The only thing I can say is that the ULCCs and the legacy carries automatically segregate the passengers by intellect. You are much more likely to be sitting next to an imbecile on a ULCC in the U.S.

    1. Scott Guest

      The difference is that legacy carriers know how to handle situations when flights get cancelled/delayed.

      AA typically has a CS desk that can reschedule me on a different flight. Whereas Spirit/Frontier, support is non-existent.

  25. iamhere Guest

    I think many are discovering that these ultra low cost carriers are not really low cost. If you compare your total bill it could be the same or more than a legacy carrier.

  26. Engel Gold

    I think the "trans Atlantic party" may be coming to an end. I am heading from the US to EU this week and the online seat may is showing the plane is less than half full.

    Many Americans will get nervous about traveling anywhere near the middle east. And it will include EU cities like London and Paris that may have "restive" population groups.

    1. John Guest

      I just flew MIA to LHR on BA, in an A380, on the 'Day of Jihad' and the plane was about 90% capacity. I really think you are mistaken.

  27. Jay Guest

    Maybe Frontier just sucks all around and turned off customers like myself who refuses to fly them again.

  28. Mirza Guest

    Two new ULCCs? I'm not sure Breeze can really be considered an ULCC. Meanwhile, what about New Pacific Airlines or Red Way?

  29. Mike Guest

    The ultra low cost carriers reliability is so poor, people don't want to fly them anymore.

  30. John A. D. Needham Guest

    Are you suggesting that Jet Blue should not so much buy Spirit as wait for economics to drive Spirit either to them at a reduced price, or perhaps even to bankruptcy, when Jet Blue can pick up the pieces?

  31. JP Guest

    The only thing ULCC's have done successfully is drag the service level down on the majors to NOTHING. By the time you add in all the fee's to the $29 round trip fare it ends up costing more that the same itinerary on UA. If your flight cancels (Allegiant) you may not have another option for DAYS. What was once (long ago) a part of your trip that you looked forward to has now turned into something that makes you wish you didn't have to go.

  32. Dan K Guest

    I used to fly Frontier on a regular basis. But the nickel and diming got to be too much. I will still look at them when traveling, but I have to add in an extra bag since they cap a bag at 40 lbs now. I have to add in the fee to check in at the gate. I have to know they don't have a customer service dept any longer. With so many add-ons, they rarely make sense any more. They did it to themselves.

  33. CommonSense Guest

    Let's hope so! Hopefully the illegal layden Spirit will be the first to go! We can shut down their operations and deport their employees all at once!

    1. Mason Christensen Guest

      People complain about Spirit and Frontier because they are bad at traveling and research. Both airlines can't be beat for short trips where you can travel light. None of the other airlines come close to marching the $40 - $50 rt low fares they often charge for going half across the country. If you eliminate spirit, you are effectively putting vacation more out of reach for the people who deserve it the most, poorer Americans

  34. DesertGhost Guest

    Part of the problem with ULCCs is unreliability. I have a friend who needed to travel between Chicago and San Diego. He got there a day late on Frontier (which he chose for its low fare), but couldn't get back when he needed to, so he ended up on American. ULCCs have little wiggle room when it comes to weather or other factors that cause cancellations or delays. I think that hurts them, and it's a huge factor in my rationale about which carrier to book.

    1. Samo Guest

      That's interesting since over on the other side of the pond, Ryanair's actually the most punctual airline on the continent. I wonder where does the difference come from?

    2. sacrxy Member

      The difference is fleet size and flexibility. Ryanair has 563 planes. Spirit 198, Frontier 132, Allegiant 126.

    3. Tim Dunn Diamond

      European ULCCs typically use secondary or tertiary airports while US LCCs and ULCCs have very good access comparatively to the most valuable and congested US airports.
      Obviously, AA and DL both have large operations at JFK and LGA as the LCCs but the legacies are willing to spend money on standby resources that the LCCs and ULCCs cannot afford to spend money on and still remain low cost

    4. Anthony Parr Guest

      The difference in mandatory compensation for delays and not flying to congested airports as much.

  35. Jaded platinum Guest

    Telling an airline “hey, your business model may no longer be profitable, but too bad, you’ve gotta keep doing it,”. The goverment did exactly that to the railroads in the 50's and 60's before finally yielding in 1971 when Amtack was formed. Now they lose our money most routes outside the Northeast Corridor. Makes me wonder what our Government run ULCC will be called....

    1. Tim Dunn Diamond

      fortunately, the US government decided after WWII to privatize intercity transportation, invested heavily in aviation infrastructure, and in 1978 deregulated the domestic US airline industry so taxpayers pay for subsidies to all airlines (which happened during covid and after 9/11) or were done on commercial terms (loans to airlines during those crises).

      The real issue is that if the ULCC sector fails and airline capacity is controlled by four big airlines, fares will go up....

      fortunately, the US government decided after WWII to privatize intercity transportation, invested heavily in aviation infrastructure, and in 1978 deregulated the domestic US airline industry so taxpayers pay for subsidies to all airlines (which happened during covid and after 9/11) or were done on commercial terms (loans to airlines during those crises).

      The real issue is that if the ULCC sector fails and airline capacity is controlled by four big airlines, fares will go up. JBLU is right that there needs to be more competition to keep the big 4 in check. JBLU just can't run its own airline at consistently profitable levels and is proposing taking on an airline that has done financially better than itself in the past, even if both are deep in trouble now.

    2. DesertGhost Guest

      Deregulation saved the railroads, just as it saved the airlines. Both the airlines and railroads became vastly overbuilt and had to remove excess capacity. Consolidation and bankruptcy allowed them to do that in a structured way. It was painful for a time, but both are more reliably profitable than before deregulation.

    3. Tim Dunn Diamond

      well said. the difference is that railroads own their tracks and have exclusivity (in general) while airlines use public facilities which are heavily shared and the government does all it can to increase competition.
      US legacy airlines became troubled financially because of their defined benefit pension plans which are not compatible with industries that are highly cyclical in profits and revenues. The major benefit of legacy carrier bankruptcies was to freeze or terminate DB...

      well said. the difference is that railroads own their tracks and have exclusivity (in general) while airlines use public facilities which are heavily shared and the government does all it can to increase competition.
      US legacy airlines became troubled financially because of their defined benefit pension plans which are not compatible with industries that are highly cyclical in profits and revenues. The major benefit of legacy carrier bankruptcies was to freeze or terminate DB pension plans
      US legacy carriers are using high labor costs to an advantage now by forcing low cost carriers to match - a completely backwards paradigm than what we've seen for the first 45 years of deregulation

    4. AndyM Guest

      The major benefit of legacy carrier bankruptcies was to freeze or terminate DB pension plans

      And screw their employees in the long run !

  36. Andy W Guest

    Frontier’s primary issue is that it is a horrible company that cares nothing about its clients who are the passengers. I would never ever fly with them again after last experience. Have had other suboptimal flights with other low cost carriers but never felt the cold shoulder and indifference that Frontier projects. Bad airline and bad company. From my experience at least

    1. Shaun Guest

      100%.

      I would not fly on Frontier for free. They are quite literally the worst airline in the world.

      They pay bounties to their gate agents to catch people with oversized bags, which leads to absolutely ridiculous treatment of passengers including denied boarding because the strap on your backpack was outside the measuring box according to the gate agent who gets paid for saying that.

      They nickel and dime every passenger to squeeze every cent...

      100%.

      I would not fly on Frontier for free. They are quite literally the worst airline in the world.

      They pay bounties to their gate agents to catch people with oversized bags, which leads to absolutely ridiculous treatment of passengers including denied boarding because the strap on your backpack was outside the measuring box according to the gate agent who gets paid for saying that.

      They nickel and dime every passenger to squeeze every cent they can out of them, leading to a planeload of passengers who, instead of being happy they're headed out on vacation, are pissed off because they got hit with unexpected fees. And their employees all hate their jobs, so they're pissed off, too.

      Once you get through all of their obtuse fees, you're usually within spitting distance of the cost of flying on a better airline, anyway.

      Their scheduling sucks, they usually only have one flight per day between any given locations, or even only a single flight that leaves that airport per day, which means you lose an entire day if anything goes wrong (like your backpack strap being out of place) and you miss the flight.

      And even when all of that goes right, you get crammed into the tiniest seats, in a middle seat (units you paid extra) next to all those pissed off passengers who started drinking in the terminal to numb themselves to the awful experience they're being forced to endure.

      Spirit is a little better, but still not exactly a great experience.

      Until domestic ULCCs start treating customers like customers instead of cattle, they will continue to lose.

  37. Kredie Guest

    It's interesting how successful low-cost airlines are in Europe - I've flown many times on easyJet, Wizz Air or Ryanair, and if the price is right and the schedule convenient, I wouldn't hesitate to fly them again. But I'd never set my foot on Spirit or Frontier in the US.

    1. Tim Dunn Diamond

      European legacy carriers have fortress hubs which are far less accessible by ultra low cost and even low cost carriers.
      Compare the amount of capacity that Spirit and Frontier have at LaGuardia - the most valuable airport in the US for access - compared to any major airport in Europe.

      LCCs and ULCCs in Europe have to provide a much more compelling reason to fly them and as much as some want to believe...

      European legacy carriers have fortress hubs which are far less accessible by ultra low cost and even low cost carriers.
      Compare the amount of capacity that Spirit and Frontier have at LaGuardia - the most valuable airport in the US for access - compared to any major airport in Europe.

      LCCs and ULCCs in Europe have to provide a much more compelling reason to fly them and as much as some want to believe otherwise, US legacy carriers offer a much better product than their legacy peers for domestic/short haul traffic than in Europe. The difference in on-time between ULCCs and legacies in Europe is much less than in the US

    2. FL350dude Guest

      (U)LCCs are generally much more punctual than legacy carriers in Europe, since they tend to use smaller, less congested airports. For example, for all of Ryanair's flaws, they are much more punctual than BA.

      (U)LCCs generally purely compete on price in Europe. Some European ULCCs even border on making American ULCCs look expensive - there are lots flight where the base fare (inc. taxes) is as little as $10 or $20 each way.

      Of course,...

      (U)LCCs are generally much more punctual than legacy carriers in Europe, since they tend to use smaller, less congested airports. For example, for all of Ryanair's flaws, they are much more punctual than BA.

      (U)LCCs generally purely compete on price in Europe. Some European ULCCs even border on making American ULCCs look expensive - there are lots flight where the base fare (inc. taxes) is as little as $10 or $20 each way.

      Of course, that assumes you're travelling with only one small bag that can fit under the seat in front. Literally nothing else is included; a much greater proportion of European ULCCs' revenue comes from ancillaries.

    3. Jason Guest

      Ummm. Easyjet has quite an operation at Paris cdg and Amsterdam. Madrid is the 5th busiest airport in Europe and Ryanair has a very large presence there. Gatwick is the 8th busiest in Europe but is dominated by uLCCs. Spirit and frontier are TINY at LGA in comparison to some of the operations you’ll see at many of the top 10 airports in Europe. What are you talking about?

    4. Tim Dunn Diamond

      how look at LHR and FRA and MUC.
      In general, US LCCs and ULCCs have greater access to the most valuable airports - LGA and DCA esp. - than ULCCs at all major airports in Europe.
      The fact that Spirit and Frontier and all but the most recent round of ULCCs serve LGA is a testament to how much the US government has worked to force US airports open for competition better than any other country in the world

    5. Jason Guest

      Not really. Frontier has 3-4 flights a day at LGA, 3 flights at DCA. Spirit has 13 flights or so at LGA, none at DCA. That's it. That's not really great access. Spirit and Frontier have both been in LGA for the better part of 20 years. That's not a lot of flights. Whereas Easyjet has dozens of flights at both Paris CDG and Amsterdam and Ryanair has dozens of flights a day at Madrid....

      Not really. Frontier has 3-4 flights a day at LGA, 3 flights at DCA. Spirit has 13 flights or so at LGA, none at DCA. That's it. That's not really great access. Spirit and Frontier have both been in LGA for the better part of 20 years. That's not a lot of flights. Whereas Easyjet has dozens of flights at both Paris CDG and Amsterdam and Ryanair has dozens of flights a day at Madrid. Frankfurt and Munich are way smaller than Paris CDG or AMS. While LHR is closed to all, I'd say there's way better access in many prime european airports for ULCCS than to the most in-demand airports in the U.S. LGA is closed at the levels above, JFK is closed, and DCA is closed. Your assessment is incorrect.

    6. kimshep Guest

      [i]"than ULCCs at all major airports in Europe."[/i]
      Tim, you carefully avoid mentioning BCN (Barcelona) where a myriad of LCC's and ULCC's have virtually driven the legacy carriers out of the market. Second largest airport in Spain which 10-12 years ago IB (Iberia) had almost a complete lock on.

  38. Drew Guest

    You could not pay me to travel on Frontier. From information and belief, there is massive cost-cutting on their maintenance, using sub-par contractors that may be feel very uncomfortable about getting on their plans.

    1. Brian Guest

      Their hasnt been a fatal plane crash among commercial carriers in over a decade. Frontier and Spirit are safe to fly.

  39. Mark Guest

    Once you add all the extras you are charged with ULCC, the price is the same as DL, UA, etc. Southwest is the only exception. And ULCC are very unreliable and constantly change schedules, delay flights etc.. Better off to fly legacy carrier. They will have a better network when it comes to delays/schedule changes/cancelations.

  40. IrishAlan Diamond

    One of the biggest issues I think more consumers are finding with ULCCs is their penchant for axing a route very quickly after launch and often at short notice. I literally almost booked a NK flight 2 weeks ago for a flight in early November and the route is now gone from their schedule. That’s a big problem especially with the smaller ULCCs like Avelo and Breeze.

  41. George Romey Guest

    I think Ben did a great job of summarizing why ULCC fortunes are falling. Maybe the days of we give you a cheap seat, nickel and dime you and treat you like a dog kind of an airline are going away. I don't see an issue with ULCCs per se. The bigger issue that I see are legacy airlines adopting the ULCC business model to fight over capacity I'm not sure is worth it in...

    I think Ben did a great job of summarizing why ULCC fortunes are falling. Maybe the days of we give you a cheap seat, nickel and dime you and treat you like a dog kind of an airline are going away. I don't see an issue with ULCCs per se. The bigger issue that I see are legacy airlines adopting the ULCC business model to fight over capacity I'm not sure is worth it in the long run. Giving someone your product below the cost of delivering it realizing they will likely never be back doesn't seem like much of a business model to me.

    1. Tim Dunn Diamond

      well said.
      As much as some resist talking about the profitability of airlines on a cards and loyalty site, the simple reality is that no company can continue to lose money and they can't survive long-term in a competitive market where other direct competitors make more money providing the same service.
      Capital flows to where it can make the greatest profit which is why, for example, if United makes less per passenger flying...

      well said.
      As much as some resist talking about the profitability of airlines on a cards and loyalty site, the simple reality is that no company can continue to lose money and they can't survive long-term in a competitive market where other direct competitors make more money providing the same service.
      Capital flows to where it can make the greatest profit which is why, for example, if United makes less per passenger flying the Pacific than Delta, it is as much real that United cannot continue to succeed as a consistent underperformer.

      The same principle is playing out in the low cost sector in the US. To not believe it plays out in every aspect of business including the airline industry is naive.

    2. Brian Guest

      The capital is flowing away from all airlines. DL was $48 on July 20 today its $34. AA, UL, B6,... and others are all hurting significantly.

  42. BeachBoy Guest

    One other factor is I have a feeling that their pool of customers is shrinking because as the saying goes "fool me once, shame on you; fool me twice, shame on me."

    Once you fly on a ULCC w/ luggage, a carry on, and a delay or cancellation you realize you probably were better off flying with one of the Big 4.

  43. Steve Guest

    Ultra low cost are far cheaper than any other option and to suggest otherwise tells me who is paying YOU !

    1. TravelinWilly Diamond

      Are you okay?

      Anyhoo, you ought to try reading the piece before commenting.

    2. Jake Guest

      If you are flying with nothing more than a backpack and can afford endless grief when a flight is cancelled.

  44. Alonzo Diamond

    I'm not sure if we'll see Frontier and Breeze go out of business in less than 3 years. Otherwise the word "struggle" is a moot point.

    But this is exactly what a lot of industries are going to see in the near future when it comes to salary and wage matching. You're about to see it with fast food in California and Chicago. So called budget companies like fast food and ULCC's simply don't have the margins to try and match the salaries/benefits of the big guys.

    1. kimshep Guest

      I'd imagine that the good burghers (sorry 'bout the pun) of McDonalds, Burger King, Wendys, Taco Bell, Chipotle and Pizza Hut would beg to differ with your closing sentence/

  45. Tim Dunn Diamond

    thank you for citing the WSJ article, Ben, and for covering the issue of how each segment of the US airline industry fares.

    The simple fact is that the two largest negative factors for LCCs including ULCCs is that they have been forced to dramatically increase their wages because of what the big 3 global carriers are doing. High salaries are simply not part of the LCC or ULCC model and yet they have no...

    thank you for citing the WSJ article, Ben, and for covering the issue of how each segment of the US airline industry fares.

    The simple fact is that the two largest negative factors for LCCs including ULCCs is that they have been forced to dramatically increase their wages because of what the big 3 global carriers are doing. High salaries are simply not part of the LCC or ULCC model and yet they have no choice or they lose pilots and mechanics, both of which are skilled workers that are not growing in number relative to demand. Airlines cannot just raise those workgroups' salaries w/o getting pushback from other labor groups including FAs and ground staff.

    Delta led the industry with the most aggressive pay raises for its pilots and then increased most of the rest of its employee groups which are almost entirely non-union.
    The second major factor is the ability to grow - which is how LCCs and ULCCs keep costs down. As new employees are hired, they start at the bottom of the scale and bring the "average" salary costs down. Because of supply chain shortages,
    Delta generates the most revenue of any airline in the world, is seeing all of the factors noted, including premium demand - which Delta has worked hard to grow, manages its fuel costs well and also has a good supply of aircraft capacity coming in to its system which is allowing it to grow; Delta grew capacity by 15-18% throughout the 2nd and 3rd quarters.

    For the first time since the US domestic airline industry was deregulated, the global carriers are in solid control of the rest of the industry.

    And the issue is not just about ULCCs but also about LCCs; Southwest and JetBlue are both LCCs and not ULCCs but both of those two carriers have reported well below average profit margins compared to their historic performance and compared to the global carriers over the past year.

    Yes, the ULCCs are in trouble but so are the LCCs.

    keep covering the issue, Ben. It has major implications

    1. NedsKid Diamond

      Thanks for that pro-Delta seeking alpha advice.

    2. Julia Guest

      How much do you think Delta pays him?

      Also, for all the positives, Delta still lags behind in quality service compared to so many other airlines...

    3. Tim Dunn Diamond

      Julia,
      Nobody pays me to think which is all it takes to see what is happening.

      As much as you want to believe otherwise, repeated quantifiable metrics show that Delta consistently runs the most high quality operation as a composite of metics- on-time, baggage handling, consumer complaints etc
      Delta has won multiple "soft" or qualitative metrics.

      It doesn't take bias or payment to know the industry. It does take bias to be unwilling to accept those facts.

    4. Tim Dunn Diamond

      get back w/ us after this earnings season is over but what I said was absolutely true in the 2nd quarter.
      Whether you read it on Seeking Alpha or anywhere else, Delta generates more revenue than any other airline in the world and is currently more profitable than any other airline - and that was true before covid.
      Delta can simply afford to hike salaries and still remain profitable. United has specifically said...

      get back w/ us after this earnings season is over but what I said was absolutely true in the 2nd quarter.
      Whether you read it on Seeking Alpha or anywhere else, Delta generates more revenue than any other airline in the world and is currently more profitable than any other airline - and that was true before covid.
      Delta can simply afford to hike salaries and still remain profitable. United has specifically said that they need to be competitive in salaries in order to achieve their growth plan. There is a very tight supply of skilled airline labor and the global 3 carriers (Alaska and Hawaiian are also legacy carriers) can afford the higher labor bills right now.
      UA's profits are expected to be about 60% of DAL's at best and AAL will fall from its 2nd quarter levels in part because of the end of the NEA while they rework their network.
      Delta pays less per gallon for fuel than American or United as a result of Delta's refinery. LUV continues to have the best fuel hedge strategy but DAL gets much of the cost savings that LUV gets DAL's fuel efficiency is higher than AAL or UAL's.

      As hard as it is for you or others to accept, Delta started the huge labor cost increases because they know the competitive implications and can afford what others cannot.

    5. DesertGhost Guest

      Obviously, Delta is the world's only perfect airline.

    6. Tim Dunn Diamond

      no, but it is the most profitable, highest revenue and highest market cap (stockholder value)

    7. DesertGhost Guest

      Tom - You're softening your rhetoric. You've consistently implied that Delta is perfect, not merely excellent (which it is, by the way). It'll be interesting to see the earnings reports. I hope all of the airlines do well. Unlike you, I don't want to see some airlines liquidated.

    8. NedsKid Diamond

      I guess you're right. Excuse me, I hear the 4pm call to prayer. Which direction is Atlanta?

    9. AndyM Guest

      https://simplywall.st/stocks/us/transportation/nyse-luv/southwest-airlines/health

      https://simplywall.st/stocks/us/transportation/nyse-dal/delta-air-lines/health

      SWA not in trouble compared to DL

  46. stogieguy7 Diamond

    It amuses me that, in the article it says that ULCCs don't draw from a single socioeconomic group - yet you admit that they mostly do as that's the group most impacted by inflation. BTW: inflation is the most regressive of any "tax" levied on the public.

    As far as ULCCs are concerned, they ultimately do draw from lower to lower-middle class income people. Those are infrequent travelers who are less savvy and more willing...

    It amuses me that, in the article it says that ULCCs don't draw from a single socioeconomic group - yet you admit that they mostly do as that's the group most impacted by inflation. BTW: inflation is the most regressive of any "tax" levied on the public.

    As far as ULCCs are concerned, they ultimately do draw from lower to lower-middle class income people. Those are infrequent travelers who are less savvy and more willing to be drawn in by a cheap base fare. I'm not being cruel, it's the truth and ULCCs depend on it. But if those folks make fewer trips, ULCCs aren't going to be pulling people off of UA, AA or DL metal. Not JetBlue or WN either. Those people generally aren;'t going to subject themselves to being charged crazy fees if you don't follow soup nazi rules. And that's the problem that ULCC's have, because they need that budget-conscious leisure traveler filling the seats. And if those folks quit taking as many trips....

    Does that make the ULCCs a "canary in a coal mine"? Perhaps. Because in a worsening economy, they are the first to suffer, but the suffering can easily work it's way up the income brackets.

    1. DCAWABN Guest

      Well put. You can call a spade a spade without running afoul of social justice warriors. (U)LCCs draw a VERY specific crowd that comes from a very specific socio-economic group. It's fact, not opinion or classism or whatever other -ism you wanna toss at it.

      And those customers choosing (U)LCCs aren't opting for the US3 for one reason: price. And US3 customers generally aren't opting for (U)LCCs for myriad reasons, but likely they're hub-captive, expect...

      Well put. You can call a spade a spade without running afoul of social justice warriors. (U)LCCs draw a VERY specific crowd that comes from a very specific socio-economic group. It's fact, not opinion or classism or whatever other -ism you wanna toss at it.

      And those customers choosing (U)LCCs aren't opting for the US3 for one reason: price. And US3 customers generally aren't opting for (U)LCCs for myriad reasons, but likely they're hub-captive, expect quick reaction times during IRROPS, loyalty programs, etc. And they're willing to pay for that and for the absence of fisticuffs on any given flight. So if (U)LCCs start losing customers, it's VERY unlikely they're going to poach from the US3. Personally, I'd like the (U)LCCs to stick around to fill that niche market allowing everyone to travel. But I don't think many of us reading this blog will be affected if they DO go under.

    2. Sean S. Guest

      There is a very peculiar delusion in frequent flier circles that somehow the airline industry defies the laws of competition, and therefore the death of large budget airlines will have no material impact on the prices and service of their fan favorite airline.

    3. DCAWABN Guest

      Assuming that's directed at me, I think you misunderstand my comment and are looking at it from a purely business perspective as opposed to a consumer's choice perspective. Prices may go up, but passengers that are loyal to a US3 for whatever reason (hub, loyalty program, etc) are unlikely to be materially affected by a (U)LCC going under even if the result is elevated prices for the same O/D trip because, as mentioned, they're loyal for other reasons.

  47. CMX Guest

    I am not against traveling on the US low cost carriers, but in reality I haven't. With all the fees added up, they often just end up being more expensive (or similarly priced) for an inferior experience, especially for those who already have airline status or even just credit cards. I just don't see the point.

    1. Unhoeflich Diamond

      They are for people who avoid doing math.

    2. Sean S. Guest

      It always amazes me that people say the same tired rejoinders about ULCCs ignoring for a moment that once you go beyond being a solo flyer unbundling makes far more sense. A family of 4 can get by with one suitcase which in many situations puts them well under legacy carriers even when you include the baggage fees. Most families also pack snacks and refillable bottles, or if the kids are young enough, breast milk...

      It always amazes me that people say the same tired rejoinders about ULCCs ignoring for a moment that once you go beyond being a solo flyer unbundling makes far more sense. A family of 4 can get by with one suitcase which in many situations puts them well under legacy carriers even when you include the baggage fees. Most families also pack snacks and refillable bottles, or if the kids are young enough, breast milk or formula, and it’s not relevant that they don’t get free tiny bottles of water. No ULCC here in America charges for checking strollers or car seats. It may be that other people need to do math that includes travelers outside of business fliers.

    3. omaatCommenter New Member

      Exactly. I had frontier status through a status match and flew them quite a bit for a year. It was totally fine. Since my status ran out, whenever i shop them, it's insane. They want over $200 roundtrip for a carry-on and seat assignment. It's not competitive.

  48. sharon Guest

    Spirit Airlines CEO has always said that some of their customers are people who traditionally drive places but fly if the price is right. They built their high-expense business praying on lower-end consumers, not very logical.

    Jetblue should be somewhere in the middle between ULLC and the legacy's. They have the advantage of having a premium product (but no lounge) and now European service, which hopefully can preserve some yields. The biggest issue with...

    Spirit Airlines CEO has always said that some of their customers are people who traditionally drive places but fly if the price is right. They built their high-expense business praying on lower-end consumers, not very logical.

    Jetblue should be somewhere in the middle between ULLC and the legacy's. They have the advantage of having a premium product (but no lounge) and now European service, which hopefully can preserve some yields. The biggest issue with Jetblue is their poor manamgent which the board needs to oust.

    1. Ben Schlappig OMAAT

      @ sharon -- I'm curious on what basis you'd consider Spirit to be a high-expense business? Admittedly labor costs have gone up across the industry. Are you referring to buying new (fuel efficient) jets, or something else?

    2. sharon Guest

      The airline industry is one in which there is tremendously high operating expenses which hinders Spirits' ability to make a profit. Airplanes are very expensive, jet fuel has volatile pricing, pilots require higher salaries, hotels for crew are costly, plus leases for operating bases. Spirit business has a very high cost basis with low margins.

      When there are so many investment opportunities available, it baffles me why people are interested in investing in airlines.

      The airline industry is one in which there is tremendously high operating expenses which hinders Spirits' ability to make a profit. Airplanes are very expensive, jet fuel has volatile pricing, pilots require higher salaries, hotels for crew are costly, plus leases for operating bases. Spirit business has a very high cost basis with low margins.

      When there are so many investment opportunities available, it baffles me why people are interested in investing in airlines.

  49. Sean S. Guest

    The argument that legacy carriers are truly price matching ULCCs is limited to competitive routes and airports and ignores that their basic economy fares are in many cases just as restrictive and fee laden as the fares people criticize from ULCCs. Any consolidation in the airline market will result in reduced capacity and an inevitable rising in prices.

    I am not “pro” any specific airline, but rather as a consumer interested in genuine competition that...

    The argument that legacy carriers are truly price matching ULCCs is limited to competitive routes and airports and ignores that their basic economy fares are in many cases just as restrictive and fee laden as the fares people criticize from ULCCs. Any consolidation in the airline market will result in reduced capacity and an inevitable rising in prices.

    I am not “pro” any specific airline, but rather as a consumer interested in genuine competition that results in better service and better fares. While there has been promising competition on international flights due to the changing economics of new aircraft, it is still disappointing how out of wack domestic prices are.

    1. Ben Schlappig OMAAT

      @ Sean S. -- I'm not trying to make the argument that they're totally price matching ULCCs, but my point is that legacy airlines often have reasonable fares. I'm curious, do you still think domestic fares are out of whack?

      Not saying you're wrong, but as I look at airfare domestically over the next several months, the pricing largely seems reasonable to me.

    2. NedsKid Diamond

      Legacy fares are very low. I've bought a dozen airline tickets in the last week... all on United, American, Delta. A connecting itinerary between two field spokes like Little Rock to Brownsville for $79 one way? First class ticket Corpus Christi to Raleigh for $225 one way? Charlotte to Boston for $49 Econ Basic or $89 reg economy? It's nuts.

    3. Sean S. Guest

      I do think they have been for sometime in this post pandemic period and have only now just started to decline. And that I do believe is because of the ramping up of capacity of many carriers, including ULCCs. Also airfare prices in aggregate often ignore that for a good chunk of America they are confined to expensive fortress hubs that, frankly, monopolize and prevent competition.

  50. Matt Guest

    Notice how all of the legacy CEOs are careful to say that bookings aren’t taking a hit….their domestic fare levels are though. Business travel hasn’t recovered along with the effects inflation and student loan repayment meaning that legacies are discounting and pressuring fares downward making ULCCs uncompetitive. Additionally, capacity growth is an issue and Delta just brought their domestic schedule down legacies 9% for January. That is highly unusual and makes it clear to me...

    Notice how all of the legacy CEOs are careful to say that bookings aren’t taking a hit….their domestic fare levels are though. Business travel hasn’t recovered along with the effects inflation and student loan repayment meaning that legacies are discounting and pressuring fares downward making ULCCs uncompetitive. Additionally, capacity growth is an issue and Delta just brought their domestic schedule down legacies 9% for January. That is highly unusual and makes it clear to me the Delta sees the writing on the wall as well.

    1. MrNonrever Guest

      I think it's basically the Southwest effect. The big three want to still have corporate travelers and southwest even fills that need by the offerings it has. So it keeps the big three prices in check, but it also keeps a lid on the competition of the ULCC carriers as well from being able to be a better choice than Southwest, though I do have to say Jet Blue is the only carrier that doesn't...

      I think it's basically the Southwest effect. The big three want to still have corporate travelers and southwest even fills that need by the offerings it has. So it keeps the big three prices in check, but it also keeps a lid on the competition of the ULCC carriers as well from being able to be a better choice than Southwest, though I do have to say Jet Blue is the only carrier that doesn't nickel and dime you and make you feel like you're flying a budget carrier. But JetBlue is nowhere near as big as Southwest and neither are the other ULCC carriers. And Southwest is the only carrier above the ULCC 's That travels to Hawaii and is really expanding their outside the continental US flights, Frontier is now flying to Mexico, and Allegiant I think flies to San Juan, Puerto Rico, St. Thomas U. S. V. I if I'm not mistaken. But then again, so does Southwest... So ask yourself would you rather fly Southwest or the other? ULCC's? Especially when Southwest has those flash sales... Especially when they don't nickel and dime you to death!

    2. Dan K Guest

      I am not a fan of the first come first serve boarding policy of SW. So that is usually my last choice even after Frontier or Spirit.

  51. Steve Diamond

    People are in a lot worse shape economically than there were two years ago, its not rocket science, its quite simple. People who fly low cost are impacted by inflation and rising rates, rents etc way more than the person who carries big 3 status and an amex platinum. Those people still travel and never book budget airlines.

    1. NedsKid Diamond

      You are true.. it's the more price sensitive who are not booking, and traditionally low fare carriers cater to them. However, I fly enough Spirit to be Gold Elite (they fly nonstop where I need to go, and have been very reliable and the perks for Gold make nearly everything free except the Big Front Seat, so I can truly go to Florida for $20 with a carry-on, checked bag, seat assignment, and get a...

      You are true.. it's the more price sensitive who are not booking, and traditionally low fare carriers cater to them. However, I fly enough Spirit to be Gold Elite (they fly nonstop where I need to go, and have been very reliable and the perks for Gold make nearly everything free except the Big Front Seat, so I can truly go to Florida for $20 with a carry-on, checked bag, seat assignment, and get a free drink and snack). I'm taking advantage of the pricing environment and, thankfully as I work remote, I work from Orlando one day a week thanks to round trip on Spirit (or Frontier, sometimes) being cheaper than an Uber one-way to the airport. What I consume in the Centurion Lounge on departure each morning is probably more than the ticket too.

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NedsKid Diamond

I guess you're right. Excuse me, I hear the 4pm call to prayer. Which direction is Atlanta?

6
TravelinWilly Diamond

Are you okay? Anyhoo, you ought to try reading the piece before commenting.

5
BeachBoy Guest

One other factor is I have a feeling that their pool of customers is shrinking because as the saying goes "fool me once, shame on you; fool me twice, shame on me." Once you fly on a ULCC w/ luggage, a carry on, and a delay or cancellation you realize you probably were better off flying with one of the Big 4.

4
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