Are Budget Airlines Facing Extinction?
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Why did budget airlines become so popular and what lessons do they teach travelers?
For years, budget airlines have reminded customers of an important lesson. You get what you pay for.
The tray tables are made for amps, so tiny. You have to pay for water. I thought that was complimentary. No, nothing's complimentary on a budget airline. The seats were so uncomfy, like zero padding. They oversold their flights and then they pick random people to like bump off the flight. So I was one of those random people. And the plane was boiling.
But people who want to travel cheap have flocked to budget airlines because the price is so right.
So sort of the peak of the budget airline era, which was maybe 10, 12 years ago, this seemed like it was going to be the dominant business model.
That's our colleague Allison Sider. She covers the airline industry.
Budget airlines were growing really quickly, expanding into major airline hubs and taking a lot of passengers. And the big airlines felt they needed to find a way to compete. I mean, it seemed like this was going to be like a real challenge to the bigger airlines.
But budget airlines haven't lived up to that challenge. And lately, they're a dying breed. Spirit Airlines went under earlier this year. Formerly beloved Southwest is facing headwinds. Now, Frontier is trying to turn around its business before it's too late. What happened to the budget
airline? I mean, the business model is really facing, you know, in some ways, existential challenges. For the last several years, these airlines that were once sort of the fastest growing, most competitive, most disruptive, now they're kind of on the back foot and they're having trouble competing with the legacy airlines. I think the future for budget travel is a little bit uncertain.
Welcome to The Journal, our show about money, business, and power. I'm Jessica Mendoza. It's Tuesday, September 15th. Coming up on the show, are budget airlines facing extinction?
How did Frontier rise as a ULCC and what is its reputation compared to Spirit?
One of the last major budget airlines in the US is Frontier. It's based in Denver, and its planes are recognizable, painted white with forest green lettering, with a different animal on every plane's tail. In the 2010s, Frontier went all in on the budget airline model.
Frontier Airlines is one of these low-cost airlines. Their ticker symbol is actually ULCC, ultra low-cost carrier. Like that's how much they sort of wanted to embody that business model. Own that identity. Yes. Spirit was sort of maybe the best known. It had the bright yellow planes and a lot of the like swagger and personality. And Frontier really had a very similar business model. It kind of shares some common roots with Spirit.
You know, not to speak ill of the dead here, but Spirit was the butt of a lot of jokes on social. What's Frontier's reputation like?
I mean, yeah, in general, the budget airlines, like you said, are like often fodder for late night comedy. Yeah. Like maybe Frontier wasn't as notorious as Spirit on that front, but Frontier actually has had like a pretty rough operation over the years. You know, just not the most reliable, like often kind of towards the bottom of the list for on-time performance or cancellations or... bumping or kind of what have you i flew frontier airlines so you don't have to like really don't
word to everything word to my mother i will never a day in my life book frontier airlines my frontier review only book if you're brave and desperate it's sometimes in life you get what you pay for and sometimes you get screwed
Frontier has said that it has made strides in improving its operation and reducing the number of canceled flights.
So, you know, and then plus it is just it was sort of by design a more bare bones experience. Not going to have a meal like you're going to be paying for any sort of extras that you want. You know, just certainly just not a luxurious experience. Right. What you buy is typically just like the base ticket, your seat,
and then anything else is extra. Yes, exactly. And for years, that model worked for Frontier. Then, in 2022, the airline decided it was time to expand. And it offered to buy Spirit Airlines and create a mega-budget airline.
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Chapters
8 chapters
1
Why did budget airlines become so popular and what lessons do they teach travelers?
0:05–2:29
2
How did Frontier rise as a ULCC and what is its reputation compared to Spirit?
2:29–4:56
3
What happened with Frontier’s attempted merger with Spirit and why did it fail?
4:56–7:54
4
How are rising fuel costs and inflation reshaping Frontier’s low‑price model?
7:54–10:44
5
Why are major airlines adding ‘Basic Economy’ and how does that threaten budget carriers?
10:44–12:41
6
What new bundles and premium products is Frontier launching to stay competitive?
12:41–14:19
7
Will Frontier survive long‑term as the last big U.S. budget airline?
14:19–15:40
8
How is Frontier targeting both bargain‑seekers and premium‑willing customers?
15:40–15:56