United Airlines CEO Scott Kirby has declared that Spirit Airlines is “already dead,” predicting it will be gone by year’s end. But I don’t think the picture is quite as black-and-white as he paints it, especially when considering the wider budget carrier market in the USA.
Kirby’s argument rests on several premises:
Kirby believes basic economy is giving legacy airlines the ability to siphon off low-fare traffic, while still charging premium customers full price. But this strategy has not yet been recession-tested. When economic headwinds hit, including fuel spikes, inflation, and high interest rates, we may see people gravitate back to the budget carrier. If we enter a recession (and there are indicators we might already be in one), many may pull back from premium add-ons and return to budget carriers. That’s precisely where airlines like Allegiant and Sun Country show resilience. Breeze has finally reported profitability. Avelo is narrowing its focus to routes and costs where it actually makes money. These are proof points that the ULCC model, when managed tightly, still works.
A great solo travel tip spotted this week on Live and Let's Fly.
