Travelers have increasingly turned to low-cost airlines in recent years in the hopes of finding less expensive ways to fly, but are they really saving money? Here's what we found on the matter.
Low-cost carriers have seen an enormous surge in popularity in recent years, with travelers increasingly viewing them as a much less expensive way to fly.
Spirit Airlines and Frontier Airlines, two prominent low-cost carriers in the U.S., have seen passenger numbers surge over the past decade. Meanwhile, the global market for the sector is projected to reach $440.46 billion by 2030.
But are low-cost carriers always cheaper? Ask Skift, our artificial intelligence chatbot, gave responses using information that’s appeared in our daily news coverage and we’ve done additional reporting.
Ask Skift Said:
Low-cost carriers, and especially ultra-low-cost carriers, typically offer lower base fares when compared to legacy airlines. However, these carriers often unbundle their products to the maximum extent, charging low base fares but high ancillary fees for extras like baggage and meals. When these low fares and high fees are combined, they can equal the higher fares and lower ancillary fees at traditional airlines.
Furthermore, the cost gap between U.S. network airlines and low-cost airlines has narrowed over the years. It went from 34% to less than 4% over the five years leading up to 2013, as per an article from November 2013. Ultra-low-cost carriers like Spirit and Allegiant, modeled after Europe’s Ryanair, operate at costs that are a step below even traditional low-cost carriers, presenting a challenge to both network and low-cost carriers.
It’s also worth noting that the market share of ultra-low-cost carriers has been growing. They doubled their market share from 2.4% in 2013 to 5.0% in the first nine months of 2022, according to an article from May 2023.
So, while low-cost carriers often offer cheaper fares, the total cost to the passenger can be comparable to traditional airlines once all fees are included.
What else you need to know:
Analysis from U.K.-based financial news website Trading Pedia found low-cost carriers often levy fees that can make their flights pricey, including for airport and online check-in. Check-in fees can be as high as $68 for Ryanair, $30 for Wizz Air and $18 with Jet2. Meanwhile, travelers flying on Ryanair can incur more than $270 in extra charges, including fees for checked baggage, seat selection and carry-on baggage.
In addition, Spirit and Frontier often charge more for baggage than so-called legacy carriers and typically levy fees for several features such as carry-on luggage, onboard food and seat selection. Spirit also charges travelers more for checked luggage the closer they get to departure.
George Ferguson, a senior aerospace, defense, and airline analyst at Bloomberg Intelligence, estimates that Frontier and Spirit double their base ticket price via ancillary fees, including baggage and for baggage, service, and other more. Frontier said in its earnings report for the second quarter of 2023 that it generated on average $80 per passenger in ancillary charges.
Flying on low-cost airlines can also be pricey for families traveling together. As the Biden administration has increasingly taken aim at so-called junk fees in recent months, the U.S. Department of Transportation unveiled an online chart earlier this year that listed which major U.S. airlines charge fees for family seating. Frontier is the only low-cost airline of the three U.S. carriers that guarantee adjacent seats for young children traveling with parents at no additional cost.
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Photo credit: Travelers may find that flying on Spirit may not be as inexpensive as they thought JTOcchialin / Wikimedia Commons