Why Budget Airlines are Suddenly Failing

Writing by Sam Denby and Tristan Purdy
Editing by Alexander Williard
Animation led by Max Moser
Sound by Graham Haerther
Thumbnail by Simon Buckmaster

[rebeccafisk]

Honestly, I’m tired of being loaded with fees. A round trip from Boston to Atlanta was $75 on Frontier, but with all the fees it came out to $180 just to hav3 a bag. Flying American was $200 and that came with a checked bag, choosing my seat, and snacks on board. Plus comfier and bigger seats.

[marcellkovacs]

Fixed title: Why Budget Airlines in the USA are Suddenly Failing

[乂]

Budget airlines are no longer as budget-friendly as they used to be.

[zindagiforeva]

As someone who works at an airport and often works the check in desk, in my experience about half the people flying to vegas are actually going for business conferences.

[rwtwb]

Here's a take. People hate Spirit Airlines. People put up with all their BS with bag checks, extra fees, and horrid customer service when they had no choice. With literally any reasonable competition in the market, people are going to bail on them.

[jasonjada]

I mean the real issue with budget airlines is the prices really aren’t cheap

[pedro]

I hate Spirit and Allegiant like no other corporations. As a customer, they are the worst of the worst. At the same time, I hope they do not go bankrupt as their prices keep Delta, AA and Alaska prices controlled to a certain extent. Meaning: exist but not thrive.

[fakshen]

Las Vegas isn't an all leisure flying. Las Vegas has a VERY strong convention trade. There are many major industries and their trade organizations that hold ANNUAL conventions in Las Vegas with tens of thousands of conventioners per event.

[gmarefan]

When you add up fees the budget airlines aren't really much cheaper.

[rockinmel]

Two elephants in the room not mentioned - and they're related:
1. Air travel on the whole is historically cheap. It's possible to find airfares on "legacy" airlines that rival "low-cost" airlines, once items like checked bags are factored in, and the "legacy" airlines also started offering reduced-fare "basic economy" "no-frills seats" - only there ARE more frills than the budget carriers offer.
2. Widespread snd severe reputational damage to the "budget" carriers via social media is driving people to check the "legacy" airlines - which people are discovering aren't that much more expensive than the "budget" carriers.

[esk]

Las Vegas is not an almost entirely vacation destination. It is one of the largest convention centers in the world, partly because of the large amount of business class or higher hotels in the city and centralized convention infrastructure. I've been to Las Vegas 5 times in the past 10 years and I don't gamble or drink/party, it is where so many large scale events and conventions are located. When big conventions hit town, many of the largest hotels will hold blocks of rooms for the convention at reasonable rates as part of a deal with the Las Vegas convention bureaus.

[Emily-leop]

Just discovered your channel with this video -- case studies are extremely useful and I'd like to see more in the future! Creating wealth entails establishing routines, such as setting aside funds at regular intervals for sound investments.

[CaptainKremmen]

You missed a huge point: Major carriers such as Delta would be making a loss too were it not for their credit cards. Delta's profit of $4.6B in 2023 included $6.8B from American Express. People are willing to put vast amounts of money through credit cards from traditional carriers which have business class and international partners. Nobody cares about earning free flights on Spirit.

[Xailow]

"Elliott doesn't understand what makes Southwest Southwest" private equity doesn't understand a damn thing.

[jhmcd]

I am going to elaborateon one point. You see, in the 90s and prior low cost airlines, like Southwest, used the much smaller 737-500. The advantage was that not only could the aircraft turn in under 30 minutes, but it was ideal for routes about 30 minutes to about 1hr and 30 min in length. That is the golden zone for a low cost carrier, flights less that 2hrs. However, Southwest now primarily used the 737-800 and Spirit and Jetblue the A320 (which is roughly the same size as the -800). Those planes are hard as hell to turn in 30 minutes and tend to take about 45. They are also most optimum on flights over 2 hours. So now they are effectively in the same ballpark as the mainline carriers, as about 2.5 hours about average length for a aircraft in the US. To make things worse they are being pushed to take on long routes which narrow bodies are not efficient on like LA to Hawaii or NYC to Europe. These routes are terrible for narrowbodies as they make them barely profitable because of their capacity. It's like flying a Gulfstream to Florida from DC, sure you'll have less people around you, but those extra people make up the cost of operation. This is why airlines like United, Delta and British Airways still operate wide bodies on those types of routes. When Southwest had a ton of short hop flights in the Northeast, that's when they got big, but now they are forced to go after vacationers which want to travel far.

[joermnyc]

My old boss was a huge Continental flier, had tons of miles. When they merged with United, they first messed up her miles, and then her first round trip with them to see family in California was an unmitigated nightmare… she switched to Jet Blue after that.

[bababababababa]

A Wendover plane video? Never seen this before

[skaarfvagly]

Budget airlines use to be budget, they would have 100% full flights because they were so cheap. Now the budget airlines increased their prices so their demand dropped, people will fly Delta/United when its the same price as the budget airline

[Westlander]

I’d love to see Frontier revert back to the old version of itself. Before becoming a budget airline, it used to be quite similar to JetBlue. Comfortable all-economy cabins with a big focus on hospitality and live TV at every seat. I think transitioning back to a similar model would do wonders for them, if they could justify the cost.

[zkosn]

No idea how Southwest is called a low cost carrier. They are frequently higher. You're going to pay for your two bags and seat selection in your fare. Apparently their windows 3.1 reservation software can't handle fancy options, so they just make you pay virtually.