How Low-Budget US Airlines Are Shifting Sales Strategies

Budget airlines across the United States have recently implemented changes to reduce surprise fees for consumers, spurred by potential new legislation. Both Frontier Airlines and Spirit Airlines have introduced new fee structures to enhance transparency and customer satisfaction.

A Fee-Free Frontier?

On May 17, Frontier Airlines announced a significant overhaul of its fee structure, aiming for greater transparency. The airline now offers four new airfare bundles, which include various amenities. This move mirrors the approach of hybrid carriers like Breeze Airways, which offers Nice, Nicer, and Nicest packages. Frontier's CEO Barry Biffle stated that these changes are "a key part of our promise to make travel with Frontier as flexible and worry-free as possible."

The new benefits, however, are not universal. The elimination of change fees applies only to passengers booked in the top three tiers (Standard, Premium, and Business). Those in the Basic package may still face charges for last-minute changes. Additionally, Frontier is reintroducing live phone support for customers within 24 hours of their flight or those with Elite status, extending flight credit validity from three to twelve months, and offering a "For Less" guarantee, awarding 2,500 FRONTIER Miles if a comparable flight is found cheaper elsewhere.

Spirit Sees an Opportunity

Spirit Airlines also announced the elimination of change and cancellation fees for all ticket fares, covering even the basic economy package. Previously, Spirit's fees varied based on how far in advance changes were made, with higher fees for changes closer to the departure date.

This shift in fee structures follows recent measures by the Department of Transportation (DOT) to protect airline passengers from unexpected charges. The DOT's new rules require airlines and ticket agents to disclose upfront fees for checked bags, carry-on bags, and reservation changes or cancellations. According to US Transportation Secretary Pete Buttigieg, these rules aim to save passengers up to $500 million annually by ensuring fee transparency.

Straight from the Top

Ancillary fees, which include charges for services traditionally included in ticket prices, have become a significant revenue source for airlines. These fees have enabled airlines to advertise low headline prices while making additional revenue from charges for bags and seat assignments. The current administration has focused on these fees, aiming to simplify and clarify them for consumers.

The DOT's new rules, effective from last month, require upfront disclosure of all fees related to baggage and reservation changes. This move aims to prevent customers from being misled by seemingly low ticket prices that ultimately increase due to additional fees.

While the current legislation does not ban fees for family seating assignments, the DOT plans to propose a separate rule to address this issue. This increased regulatory pressure could reshape the low-cost carrier (LCC) landscape in the United States, with potential impacts on ticket prices and consumer savings.

In Conclusion

The recent changes by Frontier and Spirit Airlines reflect a broader trend towards fee transparency and customer-friendly policies. As regulatory scrutiny increases, other carriers may also adjust their fee structures, potentially leading to higher ticket prices or the savings predicted by the DOT. The long-term impact on LCCs in the US remains to be seen, but these changes signify a shift towards more transparent and predictable pricing for consumers.