7 ms·

Are there any insights why? low cost carriers are successful in SEA and Europe. Why can't Spirit pull it off in the USA?

by itake 2y ago

randoglando 2y ago
I saw a video stating that they couldn't compete once the main carriers introduced "basic economy" and the like, which brought their prices significantly closer to Spirit.
eskibars 2y ago
https://m.youtube.com/watch?v=4-Pu3CXatsA https://m.youtube.com/watch?v=4-Pu3CXatsA TL;DR: several factors. - Fuel prices are up (for everyone) - Spirit having so many flights out of Florida has hurt them (climate change with heavy storms more common, and ATC staffing particularly bad in Florida, so operations has been harder) - Leisure travelers have been willing to spend more for luxury travel in the past couple years and Spirit doesn't have a real offering to that market segment
- teractiveodular 2y ago
  I don't really buy that last one: successful LCCs (Ryanair, AirAsia, etc) know their niche and their audience, and don't even try to compete outside it. Luxury travel has fatter margins but also demands way more overhead in everything (cabin crew, catering, cleaning, etc), so it's not compatible with the rest of the LCC business model, which relies on fast turnaround times and minimal services.
  - standardUser 2y ago
    I think luxury is the wrong word. I have a hierarchy of US airlines in my head that guides my domestic airfare purchase decisions and Spirit is at the bottom. American and United are near the bottom too. I never fly first class or business class, so I'm always looking for the least miserable coach ticket. For me, that's Delta, JetBlue and Alaska. I imagine a lot of fliers think the same way and though their own rankings may vary, Spirit is at the top of nobody's list. And what's the difference is cost anyway? Maybe $40.
    - teractiveodular 2y ago
      @eskibars was specifically talking about luxury. And yes, there are people who will fork out $10000 or $50000 for a 10-hour flight where they get their own little multi-room apartment complete with a shower and free flow champagne.
      - standardUser 2y ago
        Those people have precisely zero bearing on Spirit airlines and it's ability to stay in business.
- wcfields 2y ago
  Lets not forget that Airlines make a ton of their revenue from co-branded credit cards. [1] Spirit has a credit card from Bank of America [2], but it's terrible outside of the introductory bonus miles offer, which for an airline card gives you a lot of miles for a low intro-spend. Other than that, you get priority boarding and that's about it. No real other perks. I got it, and was probably flying on Spirit more in a few months than any other time in my life because I was traveling last minute to see my late father while in hospice and Spirit was far and away the cheapest flights for next-day flights. As for status, you have to basically fly weekly roundtrips to get any perks (free bags, etc.) [3] On top of all that, most business travelers won't take Spirit, and it's often not an option in Concur/Biz travel middleware because companies know the hidden fees so it's often not worth listing for budgeting against known airlines. [1] https://www.theatlantic.com/ideas/archive/2023/09/airlines-banks-mileage-programs/675374/ https://www.theatlantic.com/ideas/archive/2023/09/airlines-b... [2] https://www.bankofamerica.com/credit-cards/products/spirit-airlines-credit-card/ https://www.bankofamerica.com/credit-cards/products/spirit-a... [3] https://www.spirit.com/free-spirit https://www.spirit.com/free-spirit
owenversteeg 2y ago
There are a lot of theories for why the low-cost carriers are suddenly failing since 2020 in the US, but in my opinion the big one was inflation - of costs, of disposable income, and of expectations. Pilot salaries and fuel costs both skyrocketed since 2020, and at the same time the US got significantly richer and people got more of a taste for luxury. Expensive, premium things have never been doing so well in the US. All of a sudden, you have a double whammy of low-cost carriers being forced to raise prices and get less competitive, while consumers are more inclined to pay for luxury. Not to mention - American LCCs were never in that great of a position, structurally, vs the European LCCs. Ryanair thrives on quick turnarounds, cheap airports, cheap pilots, short flights and high population density. The US has none of those. The EU's population density is 112 people/km2 vs 36 in the US, even cheap US pilots are very expensive, turnarounds are slower, and there are few budget airports where the people live. The Port Authority is spending 25 billion dollars on revamping the three NYC area airports. Meanwhile Europe is full of cheap semirural airports like Frankfurt-Hahn, where the most recent renovation cost in the single digit millions. Where do you think you can land a 737 for cheaper?
- afavour 2y ago
  > consumers are more inclined to pay for luxury. Are they? Genuinely curious. With inflation rates we’ve seen lately it’s been my impression that the opposite is the case.
  - owenversteeg 2y ago
    In the US? Absolutely. Look at Apple's market share post-pandemic, the growth of organic food, luxury spending, cars, anything really. There has been an overwhelming shift to luxury. Google the 2020 vs 2023 Prius. Hell, even McDonalds is trying to move upscale!
    - shiroiushi 2y ago
      Exactly, yet they're all whining about inflation and how they don't get paid enough. Bunch of entitled brats.
solardev 2y ago
The low cost carriers I've flown in Western Europe and Asia were way better than the the regular US carriers (United, Delta, Southwest, etc.) They had much better seating, planes, restrooms, policies, etc. By contrast the US has the worst airlines out of anywhere I fly. Even the regular non budget ones are bad. Frontier and Spirit are the only airlines on my "never ever again" list, no matter how much cheaper they are. I've never felt as dehumanized, like cattle to the slaughter, as when flying on them...
- hunter-gatherer 2y ago
  Yeah, this is it. Frontier is great if you're flying from something like Las Vegas to Phoenix by yourself and have nothing to carry besides a water bottle and a protein bar in your pocket. Anything else the experience gets wildly unreasonable.
- pb7 2y ago
  >The low cost carriers I've flown in Western Europe and Asia were way better than the the regular US carriers (United, Delta, Southwest, etc.) They had much better seating, planes, restrooms, policies, etc. Which carriers exactly? None of these things are true. Most ULCC have thin plastic seats that don't recline, no IFE, no Wi-Fi, paid food and drinks (good luck getting even a cup of water), charging for selecting seats even at check in, same restrooms (they don't choose the restrooms), policies that include steep fees if you have to interact with any staff, draconian adherence to sizes of bags that will clearly fit just fine but they need to make extra money somehow, super thin fleet that is all but guaranteed to leave you stranded if there is IRROPS, flying out of airports with limited amenities located far from civilization, websites and apps that barely work, the list goes on and on. There are only two benefits: they are cheap and if shit goes wrong, EU261 will compensate you. That's it.
  - rsynnott 2y ago
    After spending an 11 hour flight recently with the person in front resting gently on my knees for about 9 hours, I'm all for non-reclining seats; Ryanair is into something there.
lazycouchpotato 2y ago
I came across a video a few weeks ago [1] citing gate usage being monopolized by the largest 4 carriers being responsible for low cost carriers not being able to compete. [1] https://www.youtube.com/watch?v=0_zWxdeq8F4 https://www.youtube.com/watch?v=0_zWxdeq8F4
userabchn 2y ago
Spirit was pulling it off reasonably well until Covid.

Are there any insights why? low cost carriers are successful in SEA and Europe. Why can't Spirit pull it off in the USA?

by itake 2y ago

Are there any insights why? low cost carriers are successful in SEA and Europe. Why can't Spirit pull it off in the USA?

randoglando 2y ago

I saw a video stating that they couldn't compete once the main carriers introduced "basic economy" and the like, which brought their prices significantly closer to Spirit.

eskibars 2y ago

https://m.youtube.com/watch?v=4-Pu3CXatsA https://m.youtube.com/watch?v=4-Pu3CXatsA TL;DR: several factors. - Fuel prices are up (for everyone) - Spirit having so many flights out of Florida has hurt them (climate change with heavy storms more common, and ATC staffing particularly bad in Florida, so operations has been harder) - Leisure travelers have been willing to spend more for luxury travel in the past couple years and Spirit doesn't have a real offering to that market segment

teractiveodular 2y ago
I don't really buy that last one: successful LCCs (Ryanair, AirAsia, etc) know their niche and their audience, and don't even try to compete outside it. Luxury travel has fatter margins but also demands way more overhead in everything (cabin crew, catering, cleaning, etc), so it's not compatible with the rest of the LCC business model, which relies on fast turnaround times and minimal services.
- standardUser 2y ago
  I think luxury is the wrong word. I have a hierarchy of US airlines in my head that guides my domestic airfare purchase decisions and Spirit is at the bottom. American and United are near the bottom too. I never fly first class or business class, so I'm always looking for the least miserable coach ticket. For me, that's Delta, JetBlue and Alaska. I imagine a lot of fliers think the same way and though their own rankings may vary, Spirit is at the top of nobody's list. And what's the difference is cost anyway? Maybe $40.
  - teractiveodular 2y ago
    @eskibars was specifically talking about luxury. And yes, there are people who will fork out $10000 or $50000 for a 10-hour flight where they get their own little multi-room apartment complete with a shower and free flow champagne.
    - standardUser 2y ago
      Those people have precisely zero bearing on Spirit airlines and it's ability to stay in business.
wcfields 2y ago
Lets not forget that Airlines make a ton of their revenue from co-branded credit cards. [1] Spirit has a credit card from Bank of America [2], but it's terrible outside of the introductory bonus miles offer, which for an airline card gives you a lot of miles for a low intro-spend. Other than that, you get priority boarding and that's about it. No real other perks. I got it, and was probably flying on Spirit more in a few months than any other time in my life because I was traveling last minute to see my late father while in hospice and Spirit was far and away the cheapest flights for next-day flights. As for status, you have to basically fly weekly roundtrips to get any perks (free bags, etc.) [3] On top of all that, most business travelers won't take Spirit, and it's often not an option in Concur/Biz travel middleware because companies know the hidden fees so it's often not worth listing for budgeting against known airlines. [1] https://www.theatlantic.com/ideas/archive/2023/09/airlines-banks-mileage-programs/675374/ https://www.theatlantic.com/ideas/archive/2023/09/airlines-b... [2] https://www.bankofamerica.com/credit-cards/products/spirit-airlines-credit-card/ https://www.bankofamerica.com/credit-cards/products/spirit-a... [3] https://www.spirit.com/free-spirit https://www.spirit.com/free-spirit

owenversteeg 2y ago

There are a lot of theories for why the low-cost carriers are suddenly failing since 2020 in the US, but in my opinion the big one was inflation - of costs, of disposable income, and of expectations. Pilot salaries and fuel costs both skyrocketed since 2020, and at the same time the US got significantly richer and people got more of a taste for luxury. Expensive, premium things have never been doing so well in the US. All of a sudden, you have a double whammy of low-cost carriers being forced to raise prices and get less competitive, while consumers are more inclined to pay for luxury. Not to mention - American LCCs were never in that great of a position, structurally, vs the European LCCs. Ryanair thrives on quick turnarounds, cheap airports, cheap pilots, short flights and high population density. The US has none of those. The EU's population density is 112 people/km2 vs 36 in the US, even cheap US pilots are very expensive, turnarounds are slower, and there are few budget airports where the people live. The Port Authority is spending 25 billion dollars on revamping the three NYC area airports. Meanwhile Europe is full of cheap semirural airports like Frankfurt-Hahn, where the most recent renovation cost in the single digit millions. Where do you think you can land a 737 for cheaper?

afavour 2y ago
> consumers are more inclined to pay for luxury. Are they? Genuinely curious. With inflation rates we’ve seen lately it’s been my impression that the opposite is the case.
- owenversteeg 2y ago
  In the US? Absolutely. Look at Apple's market share post-pandemic, the growth of organic food, luxury spending, cars, anything really. There has been an overwhelming shift to luxury. Google the 2020 vs 2023 Prius. Hell, even McDonalds is trying to move upscale!
  - shiroiushi 2y ago
    Exactly, yet they're all whining about inflation and how they don't get paid enough. Bunch of entitled brats.

solardev 2y ago

The low cost carriers I've flown in Western Europe and Asia were way better than the the regular US carriers (United, Delta, Southwest, etc.) They had much better seating, planes, restrooms, policies, etc. By contrast the US has the worst airlines out of anywhere I fly. Even the regular non budget ones are bad. Frontier and Spirit are the only airlines on my "never ever again" list, no matter how much cheaper they are. I've never felt as dehumanized, like cattle to the slaughter, as when flying on them...

hunter-gatherer 2y ago
Yeah, this is it. Frontier is great if you're flying from something like Las Vegas to Phoenix by yourself and have nothing to carry besides a water bottle and a protein bar in your pocket. Anything else the experience gets wildly unreasonable.
pb7 2y ago
>The low cost carriers I've flown in Western Europe and Asia were way better than the the regular US carriers (United, Delta, Southwest, etc.) They had much better seating, planes, restrooms, policies, etc. Which carriers exactly? None of these things are true. Most ULCC have thin plastic seats that don't recline, no IFE, no Wi-Fi, paid food and drinks (good luck getting even a cup of water), charging for selecting seats even at check in, same restrooms (they don't choose the restrooms), policies that include steep fees if you have to interact with any staff, draconian adherence to sizes of bags that will clearly fit just fine but they need to make extra money somehow, super thin fleet that is all but guaranteed to leave you stranded if there is IRROPS, flying out of airports with limited amenities located far from civilization, websites and apps that barely work, the list goes on and on. There are only two benefits: they are cheap and if shit goes wrong, EU261 will compensate you. That's it.
- rsynnott 2y ago
  After spending an 11 hour flight recently with the person in front resting gently on my knees for about 9 hours, I'm all for non-reclining seats; Ryanair is into something there.

lazycouchpotato 2y ago

I came across a video a few weeks ago [1] citing gate usage being monopolized by the largest 4 carriers being responsible for low cost carriers not being able to compete. [1] https://www.youtube.com/watch?v=0_zWxdeq8F4 https://www.youtube.com/watch?v=0_zWxdeq8F4

userabchn 2y ago

Spirit was pulling it off reasonably well until Covid.