Low-cost airlines in the US are no longer "cheap".

Analysis by numerous newspapers indicates that US low-cost airlines are facing structural difficulties. These difficulties are amplified by sharply rising fuel prices.

According to Reuters, the sharp increase in workers' wages after the pandemic, coupled with escalating aircraft leasing and maintenance costs, has eroded the advantages that were once core to the low-cost airline model. Meanwhile, since customers are typically price-sensitive, low-cost airlines are also limited in their ability to pass the burden of costs on to customers.

According to the Associated Press, the operation and management of aircraft and personnel by low-cost airlines are also inefficient. When customer growth slows, these airlines find themselves with an oversupply of both aircraft and personnel compared to actual demand.

Specifically, Frontier Airlines has reported adjusted losses per share in 8 of the last 13 quarters. Meanwhile, JetBlue has not achieved full-year profitability since 2019. Shares of both airlines have lost approximately three-quarters of their value over the past five years.

Currently, some believe that the difficulties faced by low-cost airlines will lead to adjustments in airfare prices. This trend could have a significant impact on consumers.

The Wall Street Journal reported that, in addition to raising base fares, airlines are also implementing other measures such as temporarily grounding some aircraft and increasing surcharges like checked baggage to cope with rising operating costs.

According to Spirit, after the airline went bankrupt, passengers had to pay an average of $60 more for a round-trip ticket on the same route – equivalent to an increase of nearly $250 for a family of four.

Overall, according to some experts in the tourism industry, the difficulties or even the possibility of bankruptcy of low-cost airlines could lead to reduced competition in the aviation industry, and consumers will be the ones who suffer the most.

Low-cost airlines help keep airfares low and force traditional airlines to compete on a level playing field. In some major markets, for example, the presence of Spirit Airlines has helped reduce average airfares by up to 14%.

In contrast to the difficulties faced by low-cost airlines, statistics show that Delta and United have become the most profitable airlines in the US thanks to their strategy of targeting high-end customers; while simultaneously regaining significant market share from budget travelers.

Source: https://vtv.vn/hang-khong-gia-re-my-khong-con-re-10026051310474822.htm