5 ms·

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

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.
  - nunez 2y ago
    BNPL a la Affirm/Klarna popped off during COVID
  - potato3732842 2y ago
    Is the market for those products growing to include more people or are people who consume those things getting richer and consuming them more?
- standardUser 2y ago
  I imagine most non-corporate, non-loyalty fliers use flight search engines where they can easily compare prices. If Spirit has the worst reputation, which I think is a given, consumers have to weigh the price difference between Spirit and a 'regular' carrier against that bad reputation. That begs the question, how much cheaper is a Spirit flight compared to other carriers for a given itinerary? In my experience, it's maybe $50-$150, compared to a trip that might cost $500-$2000 overall. It's not like fliers are choosing between Spirit and first class on Delta. They're deciding whether or not to spend an extra ~$100 to be slightly less miserable on a trip that may be one of their largest single expenses of the year, and maybe their only trip of the year.
  - owenversteeg 2y ago
    Exactly. In America today people have very little vacation time, a lot of money, and a taste for luxury. With the recent increases in salaries and fuel costs, the delta between the LCCs and the legacy carriers has dropped. You're a consumer in America taking your single yearly vacation. Are you going to save $40 on your several-thousand-dollar trip to fly Spirit? Apparently not. Meanwhile in Europe you're flying shorter distances more frequently, you don't care as much about Easyjet vs Lufthansa, and 40 euros is a lot more money.
    - ryandrake 2y ago
      On the other hand, when I fly to Vegas, typically Spirit and Frontier are less than $100 round trip. Southwest is $250-$275, and the traditional airlines are over $300. And it’s for the same no-meal, shitty legroom, unpleasant experience. So what am I paying 3X for? A brand name?
      - c22 2y ago
        Sounds like the extra cost is paying to support a sustainable business model.
        wkat4242 2y ago
- orwin 2y ago
  The thing is, comfort is sticky (as I well know sadly, second class is hard to bear for me). Low-cost companies targeted people with low disposable income at the cost of comfort. People who used to have low disposable income have now not enough to travel by plane (or at all), and people who had enough to use standard companies have still enough to use them. A very interesting fact is that median income grew in the US (less than average, but close enough). The standard deviation (from memory, if this isn't the translation of 'écart-type' I'm sorry) grew also, which indicate that the recent economic 'boom' the US experienced since the end of covid took more than 50% of us citizen with it, but clearly not a huge majority. Germany experienced a very similar thing since 2012. To my knowledge, in Germany it was most likely caused by a transfer from progressive taxation to a fixed one, reducing purchasing powers of people with low disposable income. In the US it seems it's a direct income issue.
robocat 2y ago
> he EU's population density is 112 people/km2 vs 36 in the US Arguments that try to compare population density are invariably wrong. Especially so with flights that go to population centers.
- owenversteeg 2y ago
  I would be curious to know exactly _why_ you think my argument is wrong, especially when I have proposed a decent mechanism relating to population density: cheap semirural airports and short flights. Frankfurt-Hahn or Paris Beauvais or Girona or Weeze have millions of people living right next door and are dirt cheap (multiple orders of magnitude cheaper than US airports.) Meanwhile, there are far more small rural airports in the US than in Europe, by approximately a factor of three [0] [1], but not enough people live by them to make regular flights efficient. For a great example of this, look at the Essential Air Service and how many taxpayer dollars the US spends to serve the many rural communities that would otherwise have no flights at all. [0] https://www.indexmundi.com/united_states/airports_with_paved_runways.html https://www.indexmundi.com/united_states/airports_with_paved... [1] https://www.indexmundi.com/european_union/airports_with_paved_runways.html https://www.indexmundi.com/european_union/airports_with_pave...
  - robocat 2y ago
    The concept is that it is fundamentally wrong to smear the population of NY across the total area of the US. You make a point to back an argument - the argument might be correct but your point is not. > Frankfurt-Hahn or Paris Beauvais Note that they are close to dense population areas Frankfurt and Paris. Not part of average density areas. I am just saying I have seen the pattern occur repeatedly where "population density" is used to attempt to prop an argument: density is averaging and is often meaningless.
    - gessha 2y ago
      I think a better measure would be an average of averages of adjacent populations. Define a node as a population center (say NYC) and then edges as cities (Boston, Philly, DC, Pittsburgh) with the weight being the population of the respective city. Average the populations for each mode and then average those averages. The idea of this number is it would represent the average population of points of interest.

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.
- nunez 2y ago
  BNPL a la Affirm/Klarna popped off during COVID
- potato3732842 2y ago
  Is the market for those products growing to include more people or are people who consume those things getting richer and consuming them more?
standardUser 2y ago
I imagine most non-corporate, non-loyalty fliers use flight search engines where they can easily compare prices. If Spirit has the worst reputation, which I think is a given, consumers have to weigh the price difference between Spirit and a 'regular' carrier against that bad reputation. That begs the question, how much cheaper is a Spirit flight compared to other carriers for a given itinerary? In my experience, it's maybe $50-$150, compared to a trip that might cost $500-$2000 overall. It's not like fliers are choosing between Spirit and first class on Delta. They're deciding whether or not to spend an extra ~$100 to be slightly less miserable on a trip that may be one of their largest single expenses of the year, and maybe their only trip of the year.
- owenversteeg 2y ago
  Exactly. In America today people have very little vacation time, a lot of money, and a taste for luxury. With the recent increases in salaries and fuel costs, the delta between the LCCs and the legacy carriers has dropped. You're a consumer in America taking your single yearly vacation. Are you going to save $40 on your several-thousand-dollar trip to fly Spirit? Apparently not. Meanwhile in Europe you're flying shorter distances more frequently, you don't care as much about Easyjet vs Lufthansa, and 40 euros is a lot more money.
  - ryandrake 2y ago
    On the other hand, when I fly to Vegas, typically Spirit and Frontier are less than $100 round trip. Southwest is $250-$275, and the traditional airlines are over $300. And it’s for the same no-meal, shitty legroom, unpleasant experience. So what am I paying 3X for? A brand name?
    - c22 2y ago
      Sounds like the extra cost is paying to support a sustainable business model.
      - wkat4242 2y ago
orwin 2y ago
The thing is, comfort is sticky (as I well know sadly, second class is hard to bear for me). Low-cost companies targeted people with low disposable income at the cost of comfort. People who used to have low disposable income have now not enough to travel by plane (or at all), and people who had enough to use standard companies have still enough to use them. A very interesting fact is that median income grew in the US (less than average, but close enough). The standard deviation (from memory, if this isn't the translation of 'écart-type' I'm sorry) grew also, which indicate that the recent economic 'boom' the US experienced since the end of covid took more than 50% of us citizen with it, but clearly not a huge majority. Germany experienced a very similar thing since 2012. To my knowledge, in Germany it was most likely caused by a transfer from progressive taxation to a fixed one, reducing purchasing powers of people with low disposable income. In the US it seems it's a direct income issue.

robocat 2y ago

> he EU's population density is 112 people/km2 vs 36 in the US Arguments that try to compare population density are invariably wrong. Especially so with flights that go to population centers.

owenversteeg 2y ago
I would be curious to know exactly _why_ you think my argument is wrong, especially when I have proposed a decent mechanism relating to population density: cheap semirural airports and short flights. Frankfurt-Hahn or Paris Beauvais or Girona or Weeze have millions of people living right next door and are dirt cheap (multiple orders of magnitude cheaper than US airports.) Meanwhile, there are far more small rural airports in the US than in Europe, by approximately a factor of three [0] [1], but not enough people live by them to make regular flights efficient. For a great example of this, look at the Essential Air Service and how many taxpayer dollars the US spends to serve the many rural communities that would otherwise have no flights at all. [0] https://www.indexmundi.com/united_states/airports_with_paved_runways.html https://www.indexmundi.com/united_states/airports_with_paved... [1] https://www.indexmundi.com/european_union/airports_with_paved_runways.html https://www.indexmundi.com/european_union/airports_with_pave...
- robocat 2y ago
  The concept is that it is fundamentally wrong to smear the population of NY across the total area of the US. You make a point to back an argument - the argument might be correct but your point is not. > Frankfurt-Hahn or Paris Beauvais Note that they are close to dense population areas Frankfurt and Paris. Not part of average density areas. I am just saying I have seen the pattern occur repeatedly where "population density" is used to attempt to prop an argument: density is averaging and is often meaningless.
  - gessha 2y ago
    I think a better measure would be an average of averages of adjacent populations. Define a node as a population center (say NYC) and then edges as cities (Boston, Philly, DC, Pittsburgh) with the weight being the population of the respective city. Average the populations for each mode and then average those averages. The idea of this number is it would represent the average population of points of interest.