If the planned merger of Spirit Airlines and Frontier is indeed finalized (and not derailed by an offer from Jet Blue), an ultra-low-cost carrier would become the fifth-largest airline in the United States. According to CNN Business, Jet Blue’s offer for Spirit is 33 percent higher than the one Frontier has previously made. Frontier defended its proposal saying that two ultra-low-cost airlines merging would be a bigger benefit for the airlines and consumers than Spirit selling to Jet Blue, which is considered lower-cost.
As seen in data by association Airlines for America, 15 percent of U.S. domestic air travelers used an ultra-low-cost carrier - Spirit, Frontier, Sun Country and Allegiant - in 2021. U.S. ULCCs were in fact able to win over more travelers, especially over the last decade. Industry publication Flight Global concludes American ULCCs have benefited from the pandemic crunch since more Americans had to watch their spending. Still, market penetration continues to lag far behind the budget-conscious European air travel market, where original ULCCs Ryanair and Easyjet are moving most passengers ahead of Germany’s Lufthansa.
While ULCC market shares remains relatively low in the U.S., lower-cost air travel has been making strides for a while, with Southwest taking up a large market share. Yet, traveling on an American LCC is not very different from traveling domestically on a full-service airline like Delta, American or United, as these providers cut their services on domestic routes – think no checked bags or no meal service – a long time ago. One of the few lower-cost markers that Southwest maintains is no assigned seats, while its baggage policy is more generous than that of most domestic full-service flights and its use of secondary airports has declined. This is in contrast with packages sold by Frontier and Spirit, which charge for everything from carry-on bags, snacks and drinks and even reclining seats and in-person check-in.
The early changes on full-service domestic vs. international routes are seen as one of the reasons why ultra-low-cost has not caught on majorly in the United States. It simply did not provide enough of a significant spending cut as the busy U.S. market had trimmed down previous to the ULCC boom of the 2000s, which took less nimble European full-service airlines by surprise. Americans were therefore not incentivized enough to accept the obvious drawbacks in the comfort department that traveling on ultra-low-cost entails. However, the challenging economic environment and ULCC expanding their U.S. services might convince more American travelers to go ultra-low-cost.
