Why the model for low-cost airlines may be 'evaporating'
How bleak is the future for low-cost airlines? For decades, budget carriers successfully offered travelers no-frills, cheap flights. But that scrappy business model is now eroding as costs soar and passengers opt for more comfortable seats and spacious upgrades. The business, it seems, can't even merge itself out of its tailspin. Earlier this week, Spirit Airlines once again rejected an acquisition proposal from Frontier, valued at $2.16b. The offer was similar to the one Frontier presented earlier this month. Spirit countered, but its offer was rejected. Frontier's first takeover bid in 2022, for $2.9b in cash and stock, was foiled by a $3.8b offer from rival JetBlue. Spirit filed for bankruptcy in November after a federal judge sided with the Justice Department to block its tie-up with JetBlue. The low-cost carrier model works by offering cheaper seats than traditional airlines to domestic and near-US destinations while charging fees for items like checked bags, seating selection, and snacks or drinks. Often, the airlines will use secondary airports with lower landing fees, such as Long Beach Airport in Los Angeles instead of LAX. But between increased competition from traditional carriers in domestic routes and rising labor and maintenance costs, the low-cost model has slowly unraveled. Story has more.<br/>
https://portal.staralliance.com/cms/news/hot-topics/2025-02-17/general/why-the-model-for-low-cost-airlines-may-be-evaporating
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Why the model for low-cost airlines may be 'evaporating'
How bleak is the future for low-cost airlines? For decades, budget carriers successfully offered travelers no-frills, cheap flights. But that scrappy business model is now eroding as costs soar and passengers opt for more comfortable seats and spacious upgrades. The business, it seems, can't even merge itself out of its tailspin. Earlier this week, Spirit Airlines once again rejected an acquisition proposal from Frontier, valued at $2.16b. The offer was similar to the one Frontier presented earlier this month. Spirit countered, but its offer was rejected. Frontier's first takeover bid in 2022, for $2.9b in cash and stock, was foiled by a $3.8b offer from rival JetBlue. Spirit filed for bankruptcy in November after a federal judge sided with the Justice Department to block its tie-up with JetBlue. The low-cost carrier model works by offering cheaper seats than traditional airlines to domestic and near-US destinations while charging fees for items like checked bags, seating selection, and snacks or drinks. Often, the airlines will use secondary airports with lower landing fees, such as Long Beach Airport in Los Angeles instead of LAX. But between increased competition from traditional carriers in domestic routes and rising labor and maintenance costs, the low-cost model has slowly unraveled. Story has more.<br/>
