"Aviation experts say the largest of the discount airlines, a diverse group of businesses known as ultra low-cost carriers, have become victims of their own success. They expanded rapidly, but may have grown too much. Today, they are struggling to manage rising costs and to compete with one another and giants like Delta Air Lines and United Airlines, which co-opted the strategies that made them so successful."
"Spirit helped to popularize the approach. The airline made no apologies for nickel-and-diming customers, which made it the subject of late-night jokes and viral videos. It paid off. Spirit reported annual profits from 2007, the year after it switched to an ultra low-cost model, until 2020, when the pandemic brought the industry to its knees. Along the way, Frontier, Sun Country Airlines and newer startups like Breeze Airways and Avelo Airlines adopted variations of the model."
Ultra low-cost carriers remade the U.S. aviation market by offering very low base fares and charging for almost every ancillary service. The model generated sustained profits for many carriers from the late 2000s through 2019. Rapid expansion followed as Frontier, Sun Country, Breeze, Avelo and Allegiant adopted similar approaches. Overexpansion, rising input costs and intense competition among discount carriers have eroded margins. Major legacy airlines adopted competitive tactics while providing higher service, making competition tougher. Those pressures forced Spirit to seek bankruptcy protection twice within a year and left other discount operators inconsistently profitable.
Read at Sun Sentinel
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