Markets 
This month, America’s largest budget carrier Spirit Airlines crashed into Chapter 11 bankruptcy, grounding its fleet for good after 34 years in the sky. The tens of thousands of price-sensitive passengers who flew the zero-frills, dirt cheap airline each day are now being forced to return to premium carriers like United, American, Delta and JetBlue only to discover that they’re no longer commercial aviation’s target customer.
Delta Air Lines, the industry’s profit leader, is rapidly expanding its premium cabin offerings, while reducing the availability of true economy class rump rests.
Its newest planes will be filled with lie-flat business class cabins that cost thousands of dollars per trip and premium economy seats that often cost hundreds on top of an economy fare.
United Airlines is expanding its premium Polaris cabins, while also testing stripped-down “basic business” fares for those who want to spend out of economy for a taste of the highlife without a full business class budget. Likewise, JetBlue will fill the premium gap between its Mint business class and economy with new domestic premium cabins dubbed Mini Mint.
American was late to the premium cabin arms race, but now it too is increasing its arsenal of premium seats, prioritizing its Flagship Suite business class product — at the expense of economy. Hell, even the egalitarian Southwest has given up on being merely cheap. It now plans to open airport lounges and add premium extra legroom seats.
From hotel-spa-like airport lounges with expensive champagne to improved space and privacy in their onboard suites, the industry is bending over backwards for customers who have big travel budgets.
So, will true economy travelers be left behind? Is this literally class warfare?
The answer is an emphatic “maybe,” experts say — but if you want to blame something, look at the economy, stupid — not the airlines.
“We are seeing far fewer people flying who earn less than $100,000 a year than we were before the COVID pandemic,” says Henry Harteveldt, the airline industry analyst behind Atmosphere Research Group who has worked for airlines like American, TWA and Continental.
“There are even slightly fewer people who earn between $100,000 and 150,000 flying. Because if people are paying more for rent, if their mortgages are higher, their credit card interest rates are higher, their food costs are higher and their everyday living expenses are higher, they have to manage their budgets far more carefully.”
It’s a trend playing out across the economy: As the gulf between rich and poor widens, retailers, hotels, and even airlines are rejiggering their business models to target the wealthy. Research shows that the top 10% of earners now account for half of all consumer spending in the US. With even the middle class getting priced out of air travel, economy seats, like supermarket rotisseries, are now airline loss leaders.
“What airlines are seeing is that those making over $175,000 a year are much more willing, not only to fly, but to trade up to the premium products,” adds Harteveldt.
There’s even more bad news for the back of the plane on the horizon, with some in the industry speculating that the cost of flying economy could soon go up — and not just because of soaring jet fuel prices.
For decades, Spirit pioneered ways to reduce the cost of a ticket, disciplining the big national carriers. More recently, the big brands beat Spirit and the other discounters at their own game.
Go to the American Airlines website right now, punch in your dates and destination and you’ll be presented with four main cabin economy fares: Main Select, Main Plus, Main and Basic Economy. That basic economy fare — which doesn’t allow you to select your seat, make changes or earn miles — was more or less pegged to the cost of flying Spirit. It’s not just American. All of the major airlines started price matching Spirit in one way or another.
“United, American and Delta are partially responsible for pushing Spirit to death’s door,” says Brian Summers, editor of the industry trade publication The Airline Observer.
“They took a lot of their customers who said, ‘Oh my god, I can fly Spirit and be treated like crap, or I can fly a big airline for the same price. And yeah, it’ll be a Basic Economy ticket and maybe I’ll be in a middle seat, but there is padding in the seat and they treat me like a human being.’”
With Spirit gone, and with the pressure to compete on price reduced, fares may rise.
“If you lose these low cost carriers like Spirit, do the big airlines get a little bit too fat and happy?” Summers asks.
“When they are no longer competing with the discounters, can they say to their most frugal customers, ‘Hey, you don’t have another option’? That is a bit of a concern.”
But the premium cabin arms race, the lounge and champagne wars, aren’t the whole story, the experts caution. In fact, there are some silver linings for the parsimonious jet set.
“There are things that are better and there are things that are worse about flying economy,” says Gary Leff, the influential air travel egghead behind the blog View from the Wing.
“It is true that there tends to be less legroom in economy seats than there was 15 years ago. On the other hand, we now have better WiFi on planes and better entertainment. There are a lot more people who can fly now than ever before — roughly 10 times as many people compared to pre-deregulation [in 1978].”
Not only that but adjusted for inflation and fees, fares are actually down, he says.
“Air travel is more accessible than ever,” says Leff.
“I think the biggest change is how it feels to fly. It often feels that we’re more squeezed because planes are much more full than they used to be. Twenty years ago, a third of the seats on a plane might go empty, and the number one determiner of whether you have a great flight is, do you have an empty seat next to you?”
Meanwhile, many of the perks that airlines had abandoned to compete with low-cost carriers are creeping back. Screens, which for years were ripped out of seat backs, are making a comeback. Delta, JetBlue and now United and American are all leaning into onboard entertainment on their domestic planes. Snacks have returned, too (just don’t expect them outside business on short-hauls). Summers says it’s all trickle down from the premium cabins.
“You’re in the worst seat on the airplane, and because the best customers of the airline wanted free WiFi, you’re getting super fast WiFi, too. It’s the same thing for TV screens. All these airlines, except Delta, took off their TV screens. They assumed that people would bring their own devices. But what is United doing? They’re adding screens back to flights. You’re getting the same screen as the person in economy plus. The snacks are great now. Airlines brought those back basically to cater to premium customers or semi-premium customers — but you’re getting them in economy, too.”
The best news for economy travelers is that airlines are no longer just trying to fill seats – they’re trying to start a relationship. With profitable products in the front of the plane, they have a real reason to make sure frugal fliers have a good experience. Because, if they can impress you and create some brand loyalty, then maybe, hopefully, they can convince you to move forward in the cabin. To do that they’ll need to make their customers happy first — and that’s just how it should be.
Christopher Cameron is the New York Post’s Special Sections Editor overseeing Travel and Real Estate. He has covered wealth, real estate, travel and scandal for publications like The Wall Street Journal, The Washington Post, Robb Report and The Hollywood Reporter.
Read the full article here
