The bankruptcy of Spirit Airlines reflects changes in the U.S. aviation industry: the era of low-cost carriers is ending, with premiumization and scaling becoming the main trends.
- With the collapse of Spirit Airlines, American travelers during the summer travel season have fewer low-cost options, and the era of low-cost and ultra-low-cost airlines may have irreversibly come to an end. Porter, editor at travel website Thrifty Traveler, pointed out that in the past, Americans “voted with their wallets,” choosing low fares and giving rise to budget carriers like Spirit Airlines. However, the bankruptcy of Spirit Airlines signals the return of the "golden age of travel," a change that ordinary travelers may not welcome.
- The major airlines are showing a K-shaped divergence in results. In 2025, Delta Airlines' annual revenue reached a record high of $58.3 billion, but the sale of economy-class tickets fell by $1.1 billion year-on-year, while premium ticket sales and high-margin businesses made up the shortfall. Currently, 60% of total revenue comes from premium cabins, loyalty programs, freight, and similar operations. United Airlines posted adjusted net profit of $3.5 billion in 2025 (+6% year-on-year), with premium seat revenue surging by 11%. The CEOs of these airlines say the fastest-growing demand comes from the premium market.
- High fuel costs are a key factor crushing budget carriers. In March 2026, US airlines’ aviation fuel expenditure rose 56.4% month-on-month and 30% year-on-year, reaching a total of $5.06 billion. Porter pointed out that aviation fuel and pilot salaries are now too high to support even lower fares. Airlines need scale to compete, but small and midsized carriers are caught in a "chicken-and-egg" dilemma—they need scale to compete, but to achieve scale they must first compete.
- The Big Three (American Airlines, Delta, and United) are using their scale and profitable loyalty and credit card programs to squeeze small carriers. The remaining budget airlines can only compete over secondary and tertiary airports overlooked by major carriers. Allegiant completed its acquisition of Sun Country Airlines, but Porter believes growth potential is limited; if they attempt to become national competitors, the Big Three will "strike back hard."
- After Spirit Airlines’ bankruptcy, various carriers have adjusted their strategies: Southwest Airlines withdrew from O’Hare and concentrated operations at Midway; JetBlue will suspend its Manchester market from July 7, while increasing investment in Fort Lauderdale and reducing flights in the New York area. Economist Schafer believes that in a high fuel cost environment, many profitable routes have disappeared, and it will be difficult for existing budget airlines to fill the gap left by Spirit Airlines (only 2% of the flying public chose Spirit, so the gap itself is not large).
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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