Experts say rising fuel costs and shifting traveler habits may be ending the low fare era for good.
With Spirit no longer operating, travelers heading into the busy summer season have fewer rock bottom fare options than they did a year ago. Carriers including Breeze Airways, Frontier and Avelo stand to gain some of that displaced traffic, but industry watchers say the bigger story is structural: the low cost carrier model itself is under strain in the United States, and jet fuel prices are only part of the problem.
Decades of consumer behavior built the rise of budget carriers like Spirit and Frontier, but he believes Spirit’s exit last month may mark a turning point toward pricier, more traditional air travel that many everyday flyers will not welcome.
Major carriers are leaning into premium travel, not low fares
Recent earnings support that theory. Delta Air Lines posted record annual revenue of $58.3 billion in 2025, even though the airline sold $1.1 billion less in economy seats than the year before. Premium cabins, loyalty programs and cargo now account for 60% of Delta’s total revenue.
Delta CEO Ed Bastian has described the market as splitting into a K shape, with strong demand among higher spending travelers and softness among price sensitive ones. He has said fare growth is being driven largely by premium demand, with a cap on how much supply the airline can add given customers willingness to pay for front of cabin seating.
United Airlines reported similar trends, with adjusted net profit reaching $3.5 billion in 2025, up 6%, while premium seat revenue climbed 11% for the year. The airline had anticipated record profits before conflict in the Middle East disrupted travel demand, though it says spending from less price sensitive customers has remained resilient.
Jet fuel costs have hit smaller airlines hardest
Rising fuel prices have squeezed every carrier in 2026, but smaller airlines without the scale of the major players have absorbed the worst of it. According to Department of Transportation data, U.S. carriers spent 56.4% more on jet fuel in March than in February, totaling $5.06 billion, up from $3.23 billion the month before and 30% higher than March 2025.
Tensions around the Strait of Hormuz have driven much of that volatility. A recent U.S. Iran agreement to reopen the strait briefly pushed prices lower, continuing a downward trend since an April peak, but Iranian officials said Saturday the strait had been closed again, underscoring how fragile the situation remains for airlines already squeezed by costs.
Scale has become the industry’s biggest competitive advantage
The dilemma facing low cost carriers is circular: they need scale to compete on cost, but they need to already be competitive to grow that scale. American, Delta and United have used loyalty programs and credit card partnerships to box out smaller rivals, leaving discount airlines to focus on routes the major carriers consider unprofitable, often connecting smaller or secondary cities.
Some are trying to grow anyway. Allegiant completed its acquisition of Sun Country in May in a bid to build a more durable airline business. But that there are limits to how far that strategy can stretch, since the Big Three are likely to respond aggressively if a budget carrier tries to expand into nationally competitive territory.
Airlines are realigning their networks following Spirit’s exit
Southwest pulled its flights from Chicago’s O’Hare International Airport this month, consolidating operations at Midway. JetBlue is ending service to the Manchester, New Hampshire market on July 7 while expanding its presence in Fort Lauderdale and scaling back flights at LaGuardia and Newark.
University of Utah economics professor Scott Schaefer said the remaining discount carriers will struggle to fully replace Spirit’s footprint, noting that high fuel costs have shrunk the number of routes that can turn a profit. He added that Spirit represented only about 2% of the flying public, meaning the void it left behind, while real, is relatively contained.
Europe remains a stronger market for budget airlines, for now
JD Power’s Michael Taylor said discount carriers fare better in Europe largely because shorter flight distances allow planes to turn around faster, a key profit driver for the model. European budget airlines are nonetheless feeling pressure of their own, with jet fuel prices there reaching record highs. EasyJet reported tens of millions of pounds in added fuel costs and a steep first half loss, and Ryanair’s leadership has warned that continued disruption could lead to airline failures in Europe this winter.
Traveler habits may be shifting away from rock bottom fares
Spirit‘s troubles predated this year’s fuel spike, and that broader shifts in traveler preferences, particularly among millennials willing to pay more for reliability and service, have been building since 2020. Survey data backs that up, showing a notably higher share of millennials willing to pay a premium for full service carriers compared to older generations.
Still, many travelers say budget options remain essential for keeping air travel accessible to families, students and small business owners, even as the industry tilts toward premium experiences.