The Upsetting Reasons Budget Airlines Might Be 'Endangered'

Love them or hate them, budget airlines are often the butt of a few jokes. Their fares are cheap, but the recent travel problem of luggage rage and lack of date flexibility make travelers weigh the pros and cons with extra scrutiny before booking. Still, airlines like Spirit, Allegiant, and even Southwest help make travel more affordable for thousands of travelers and help boost business for smaller airports.

Wendover Productions explains that in the 2010s, budget airlines had "monumental profit margins for any industry," even making more money than legacy carriers like Delta and United. But while air travel across the board took a hit during the COVID-19 pandemic, financial recovery for budget airlines has been less linear than it has for their non-budget competitors. One cause of lower profits for budget airlines is that fuel prices increased around 2022. Therefore, it now costs more for these airlines to actually transport each passenger. Another glaring issue is that some leisure-focused budget airlines serve popular vacation areas like Florida. This part of the country is seeing more hurricanes or other disruptive weather events than in the past, forcing airlines to send out less flights.

Competition with legacy carriers in terms of staff and ticket prices has not been easy for budget airlines. Something all airlines have seen in the 2020s is a shortage in pilots, but an increase in pilot wages. Budget airlines are now competing with all airlines rather than just budget ones. Even air traffic controllers have been in short supply. Legacy carriers have also attracted more budget travelers by offering low-price categories like basic economy. New aircraft models like the Boeing 737 MAX 9 and Airbus A321neo can fit more seats too, reducing their operating costs.

Increasing fares would be the obvious answer for an airline experiencing rising operating costs, but that would also defeat the purpose of being a budget airline. A recent solution for Spirit Airlines in particular was a merger with the popular U.S. airline JetBlue. But in January of 2024, federal courts blocked the proposition as they felt it would go against antitrust laws. If budget airlines do fall to the wayside, aviation changes you can expect to see include a major drop in business for smaller airports and increased fares to any airport served by a budget airline without their competitively low fares motivating other airlines to attract customers with lower fares of their own.