Discount airlines reshaped the U.S. aviation industry by offering cheap fares and charging extra for pretty much every service imaginable. And they made lots of money doing it.
Now, however, those companies are under intense pressure.
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.
Those and other unique challenges pushed Spirit Airlines, a pioneer of the business model, to seek bankruptcy protection this summer, for the second time in less than 12 months. Other discount operators, such as Frontier Airlines, are in better financial shape, but are no longer consistently profitable, even as some of the nation’s biggest airlines thrive.
“The mainline carriers have effectively figured out how to compete — with higher costs and better service,” said Dan Akins, an economist with Flightpath Economics, an aviation consulting firm.
No-frills carriers have been around for decades and generally followed simple principles: Fly planes full and often. Cut costs as much as possible. Offer low fares but charge for extras.
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.
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The post Discount Airlines Changed Flying. Now They’re in Trouble. appeared first on New York Times.
