Legacy Airlines Are Thriving With Ultracheap Fares, Crushing Budget Carriers
Deep discounters such as Spirit and Frontier change offerings to push back.
To both the delight and dismay of many travelers, basic economy fares have become a fixture of America’s airline landscape, offering lower prices to flyers willing to forgo checked baggage or airborne amenities such as a free assigned seat or even a soft drink at 30,000 feet. The cheap but highly restrictive fares are an innovative pricing tool, originally adopted by Delta Air Lines Inc. about a decade ago to slap down aggressive expansion by discounters including Spirit Airlines Inc. and Frontier Group Holdings Inc.
Rather than just a defensive move, they’re increasingly being used by the largest US carriers to lure price-conscious travelers from the very upstart airlines that pioneered ultralow fares that bought only a seat. The legacy carriers’ success, along with dramatically higher costs across the industry, is forcing changes at the smaller airlines. For some discounters, it may even be an existential challenge.