There’s no doubt that the cost of nearly everything is on the rise and has been for years. However, one often overlooked industry has been struggling to keep costs down for consumers of every type: airlines.
The ultra-low-cost airline business model consists of selling passengers at the promise of cheap fares—often as low as 30 or 40 dollars—and then charging for any and every other thing they possibly can. For example, if you were to book a flight on Frontier with a fare of $40, your total would more likely resemble $200 or $300. This is because these airlines make their money off of add-ons such as seat selection, carry-on bags, and even visiting the check-in desk.
This, however, has begun to change in recent years, as following the COVID-19 Pandemic, airline operating costs have been on the rise and travelers have begun preferring more premium travel, allowing the traditional airline models to once again find success. A key part of this success was the introduction of basic economy fares that match those of low-cost carriers, in which almost everything besides your basic ticket costs extra. With this, budget-conscious travelers have begun to move away from the traditional low-cost carrier to the more traditional legacy carriers (such as United, Delta, and American).
Today, many travelers prefer those legacy carriers because they are able to fly on the same basis as with low-cost carriers, but get the benefits of legacy carriers, such as their significantly better loyalty programs and overall onboard experience. This means they share the same seats and cabin as standard economy travelers rather than a seat with minimal padding and a tray table the size of your keyboard.
This has pushed Airlines such as Southwest (another previously successful low-cost airline) to significantly restructure their business models, simply out of necessity to ensure that they are able to continue to survive as a company for years to come. With this, they have introduced an entirely new brand identity that makes them more closely aligned with legacy carriers when it comes to fare types, now charging for bags and offering basic economy-like fares despite keeping all economy cabin layouts.
In simple terms, introducing these new stricter fare types is a way to increase financial income while keeping their status as a low-cost carrier despite the now blurring lines between that and the traditional airline model. Frontier, an ultra-low-cost carrier has had a similar turn around as Southwest through, restructuring their overall experience and fare types while keeping their status as an ultra low cost carrier.
Spirit, as of December 2025, is the only remaining carrier in the U.S. that can still be fully classified as an ultra-low-cost carrier, having made no changes to its business model over the past year. However, this has had significant effects on Spirit, as earlier this year, they filed for bankruptcy and have continued in a trajectory of downfall throughout the past eight or so months.
Spirit is now in its second round of bankruptcy financing, with pilots collectively agreeing to take temporary pay cuts from both hourly rates and retirement contributions, set to end in 2028, according to ALPA. With Spirit in such condition, many other sources have reported that Spirit may be closer to full liquidation despite the new financing.
As reported by Skift Weekly, “The immediate access to $50 million will allow Spirit to stay afloat in the short-term. The airline’s creditors are meeting on Wednesday, and it is widely expected that they will discuss Spirit’s third round of bankruptcy financing.” This has led many to speculate that despite the abrupt financing, without continued bankruptcy financing, the company could face complete liquidation.
Since Spirit is now filling the space that multiple different companies previously held in keeping market-wide costs for customers down, it is one of the final pieces holding what we consider to be modern-day affordable air travel together. Since Spirit now follows suit with the Southwest Effect and being the sole carrier to do so, it holds greater control over markets, and the costs are therefore passed on to customers.
If Spirit were to enter liquidation, this would significantly affect the airline industry overall. Since Spirit is the final step, keeping prices down in many markets without the company as a whole, entire markets will see costs increase significantly. These effects have already been seen over the past few weeks as Spirit cut flights to multiple West Coast cities from Las Vegas, which saw Thanksgiving travel costs rise on those specific routes.
This would affect travelers who haven’t even set foot on a Spirit Airlines aircraft, since in these markets the company is the one thing keeping fares low. Additionally, KSNV found that continued flight cuts could lead to a 15% overall increase in costs put forward towards travelers on all airlines. They also found that Frontier Airlines—Spirit’s closest competitor and the airline with the closest business model within the U.S.—had round-trip prices upwards of $450 to nearby west coast cities, averaging that of the larger, more profitable legacy carriers.
This means that if Spirit were to be liquidated, the effects of the company’s collapse would be put forward to every traveler flying within the U.S., regardless of which airline they are flying, since those airlines won’t have any direct competition with airlines offering significantly lower fares. Essentially, without a stronghold over markets, legacy carriers will compete only with themselves for the lowest fares rather than with an outside force that is able to offer significantly lower ones.
Overall, this is an ongoing issue with no immediate solution, so time will only tell what the future holds for Spirit and the industry as a whole. However, for now, the ever-increasing cost of air travel is a reality that will continue to persist.
