United Chief Dismisses Budget Airline Model as 'Dead' and 'Crappy' (marketwatch.com) 63
United Airlines CEO Scott Kirby has harsh words for budget carriers, calling their business model "dead."
"It's dead. Look, it's a crappy model. Sorry," he said when asked about the budget airline approach. Kirby argued that budget carriers like Southwest, Spirit, and Frontier built their operations around what he characterized as customer-hostile practices, saying "The model was, screw the customer ... Trick people, get them to buy, get them to come, and then charge them a whole bunch of fees that they aren't expecting."
He said he believes that these airlines struggle to retain customers once they reach sufficient scale to require repeat business.
"It's dead. Look, it's a crappy model. Sorry," he said when asked about the budget airline approach. Kirby argued that budget carriers like Southwest, Spirit, and Frontier built their operations around what he characterized as customer-hostile practices, saying "The model was, screw the customer ... Trick people, get them to buy, get them to come, and then charge them a whole bunch of fees that they aren't expecting."
He said he believes that these airlines struggle to retain customers once they reach sufficient scale to require repeat business.
Seemed good enough for United (Score:5, Insightful)
Didn't that model benefit the large carriers by allowing them to treat their customer the same way? Perhaps not to the extent of budget airlines, but it definitely helped move customer experience for all airlines backwards.
Re:Seemed good enough for United (Score:4, Funny)
Apparently Delta tried for a couple of years to buck the trend of "everything is about lowest price" but they didn't make enough money to support that model.
I think the thing that's broken about budget airlines is their limited reach. They fly to a limited number of markets, offer a relatively limited number of services, and generally work if they happen to fly where you want to go.
(I remember a trip from Dulles to Detroit. I found a seat on Frontier for $18, the corporate travel agent had to triple check the price as she didn't believe it, either. The problem was coming back, there the flight on United cost me about $300. From that experience I decided the demand for flights to Detroit was a lot less than the demand to escape...)
Re: Seemed good enough for United (Score:2)
"From that experience I decided the demand for flights to Detroit was a lot less than the demand to escape"
This probably has a lot more to do with the network topology of the airline and the date/time of travel. Delta, for example, uses Detroit as a major hub (2nd after Atlanta) and so tickets to Detroit are relatively cheap and tickets out tend to be a bit more expensive.
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but it definitely helped move customer experience for all airlines backwards.
In what way? I mean I paid genuine 1990s prices for my last flight with Qatar and I didn't even get need to check in with poor people. I had a dedicated checkin desk with a lift that went straight to the lounge and someone came and collected me when we were ready to board. Also I played games with the flight services manager, he had my Steamdeck and I had his ROG Ally.
Take a 90s flight price, run it through an inflation calculator, pay that new 2025 price and you'll find customer service is as good if not b
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No this discussion is about the cost vs pleasure of flying. The experience for customers hasn't gone backwards in any way. You just don't want to pay the same you did for the past experience so you *voluntarily* of your own accord choose to pay less for a worse experience.
Pay the same you did in the past inflation adjusted and you actually get a better experience now than in the past.
You're right it has nothing to do with first / business class. It has to do with people not paying for something and then com
Re:Seemed good enough for United (Score:5, Informative)
From what data I could find with a quick search, the average airfare price to consumers has decreased by 40% since the mid-90s when adjusting for inflation. People still have the option to fly business class or first class if they want amenities, but most people just want to get from point A to point B as quickly and inexpensively as possible. The airlines that can do that best are the ones that will get the most customers. No company ever went broke giving the customers what they want to pay money for for a price greater than it takes to produce that good or service.
Disagree...Southwest Airlines (Score:2)
Southwest Airlines ran a low cost airline with decent service, no extra fees unless you checked more than one suitcase for decades.
It's fallen down post pandemic, but not due to its low cost orientation.
Nonsense (Score:4, Funny)
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Honestly I'd pay extra for the ability to get on a plane, pass out, and simply wake up when I get there.
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If alcohol makes you pass out you may have a problem. But for a more serious answer: Yes, some flights no longer serve any alcohol (usually because people got drunk and started fights) and budget airlines will charge you a fortune for it.
Europe (Score:1)
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EU airlines have to compete with high speed rail. Most of them, anyway. Ryanair exists because it serves a group of people stuck on an island.
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Nope, Ryanair is flying all over continental Europe as well. AFAIR they are the largest airline in Europe, even larger than the Lufthansa group.
I liked budget carriers. (Score:2)
I mean if you knew what you were getting and weren't expecting the normal airline experiance it was great.
In fact I find a lot of the normal airline experiance annoying and preferred Frontier for just being a simple transport from point A to point B without any bs. It felt quicker and more streamlined, with less distracting chatter from flight attendents, less people fussing with their stupid airplane food, and everyone carried less luggage so deplaning was faster. It was great.
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Absolutely. I've flown United quite a few times. I also have flown Spirit regularly. I have absolutely NO issues with Spirit.
You know you're not getting any snacks or beverages and they're strict on the luggage sizes - so verify your luggage size ahead of time. Don't go in expecting anything more than a seat and transportation and you won't be disappointed.
Spirit has never failed to transport me between the cities that I bought a ticket for. I didn't get "nickeled and dimed" because I didn't buy any e
Whoa whoa whoa - Southwest?? (Score:5, Informative)
I agree with his description of Spirit and Frontier. Ultra budget airlines built around making sure the airline paid the minimum price for everything (like seat cushions) and the customer paid as much as possible (like for a carryon larger than a purse).
But Southwest? Even with the VERY UNFORTUNATE changes they are making around seat reservations, even with that I would vastly rather fly Southwest than those other two - or frankly even United.
Southwest has OK seat size and seats. They ACTUALLY HAVE under-seat storage, unlike (again) United. They have really reasonable policies around re-booking or cancelling flights. They have been to date extremely customer friendly in a way zero other airlines I have flown have been.
Southwest has been the only airline I have been on to really strike a good balance between cost and services.
Re:Whoa whoa whoa - Southwest?? (Score:4, Insightful)
So of course "activist investors" (aka "assholes") come along, insist that Southwest is leaving dollars on the table, and try to turn them into the same thing from which they were trying to be different, in the name of shareholders. Somehow, this needs to be stopped, before everything on the planet is enshittified.
Re: Whoa whoa whoa - Southwest?? (Score:2)
Well, I can tell you the lack of assigned seating is why I would never even think of flying Southwest. So there's probably a lot of people like me they are losing out on.
Re: Whoa whoa whoa - Southwest?? (Score:2)
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Not always possible. And even when it is, nothing is assured. I've checked in within 1 minute of the start period and had over 100 people ahead of me. Unassigned seating is absolutely the reason I refuse to fly southwest, I will happily pay more to assure I get my aisle seat.
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and the customer paid as much as possible
And yet when you didn't pay extra for a large carry on, and didn't need a checked bag you found you would travel to another country at speed for less than the cost of a train ticket to the airport.
I find it hard to feel anything but distain for people who complain about budget airlines. It is literally the cheapest form of travel. Heck I flew to Vienna once with Ryanair for a cost that I literally could not even make it to my local airport.
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Wendover just released a video about southwest and why they are failing, basically they were doing well until the pandemic then an active investor jumped in and is actively trying to destroy the brand for a quick buck.
https://ancillary-proxy.atarimworker.io?url=https%3A%2F%2Fyoutu.be%2FBD-rLIz9XUo%3Fs... [youtu.be]
Whole bunch of fees eh? (Score:2)
Like say checking a single bag or say reducing legroom for 50% of the plane so you can make 40% a little roomier and charge for the privilege?
I mean I get his point but it's a little rich for any airline CEO to sit here and not say the entire industry changed to a more-fees model, wait some amount of years and then act like you all didn't coordinate this over time.
The Design of Airline Route Networks [youtube.com]
Also this recent video I found very interesting in how it breaks down the approach to flight routes the 3 maj
Earlier today (Score:2)
Earlier today we were reading how UA was 'targeting business travelers with higher fares'
So okay they are bundling stuff rather than collecting nickel and dimes.
In some respects that can be a better experience. Like you want to sit down at the restaurant and just enjoy yourself and not make a marginal decision about if you want bread sticks..
That is not UA though, they are instead constructing a byzantine chart of fares and rules so that nobody understands why this trip cost more or less than the last one
United Breaks Guitars (Score:1)
Misleading and Aero-pron (Score:1)
Nah (Score:2)
No - of course he's going to claim that the less profitable model is terrible.
Realistically budget airlines always provide what they promise: a seat on an airplane that is going to transport you from one place to another. If that's what you're expecting then it works well - AND the competition helps keep the prices of the non-budget airlines reasonable too.
There are a whole lot of people who straight up would not be able to afford to fly at all without access to budget airlines.
Re: Nah (Score:3)
"whole lot of people who straight up would not be able to afford to fly at all without access to budget airlines"
God forbid we have to deploy better rail infrastructure to service the poor.
200 mile ideal for trains (Score:2)
Much beyond that and it's harder to justify. Thus in the US the NorthEast Corridor - Boston down to DC - is ideal train territory, as are a few locations in Florida, Texas and California. But it requires a higher level of population density than most of the fly over states offer, so rail is not a viable solution. Add in the fact that it is heavily used for freight, and it's hard to argue the toss.
OTOH if the TSA security checks ramp up further, perhaps people will choose trains instead.
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Cars.
Americans will use cars
1)America has limited-access highways
2)The car leaves anytime, day or night
3)The car goes doorstep to doorstep
4)There is an existing infrastructure of fuel stations, motels, and food services
5)The modern car is as fast as normal trains (Americans drive 80+ MPH / 129+ KPH when the cops aren't out)
American trains are for cargo (or scenery). The only reason they had passenger service was to advertise the cargo service.
The gall of this guy (Score:3)
"Trick people, get them to buy, get them to come, and then charge them a whole bunch of fees that they aren't expecting."
This is exactly the model United uses. Here's your price...oh wait, you wanted to bring carry on luggage? That's a bunch extra $$$. ( Like who is travelling without bringing at least a carry-on....?)
Unlike Southwest (was) we let you pick your seat....oh wait there are no seats left at your fare...how about a premium seat which is exactly the same as the basic seat, except costs more. That's more $$$
Then all the other BS around change fees when they eff up, automatically cancelling your flight and rebooking you.
United straight up sux.
I flew Hawaiian Airline recently and it was a freakin' dream. A little bit of food in a meal, comfortable, reasonable sized seats. No B.S. around carry on. Free, high speed, WiFi. United, American, Delta can pound sand. I don't have the guts to fly Spirit...and sounds like Southwest is spiraling downhill for some reason.
Re: The gall of this guy (Score:2)
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Yeah, complain about the budget airlines while you follow their lead. Pound sand, Kirby.
United Breaks Guitars (Score:1)
He's not wrong (Score:2)
He's not wrong, although hasn't United pulled these same shenanigans over the years too? The bigger problem is the TSA. I have not flown in over 20 years because as a US citizen I can't fly within my own country without "papers please". As a former Marine I served to keep this country free. Screw the TSA and their bullshit.
Re: He's not wrong (Score:2)
What country lets you fly without papers?
Re: He's not wrong (Score:2)
Re: He's not wrong (Score:2)
And where in the world is that not true?
Re: He's not wrong (Score:2)
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Re: He's not wrong (Score:2)
A passport is not special. And my state driver's license allows me to fly.
Jetblue? (Score:2)
United CEO Is A Myopic And Tone Deaf Ass (Score:2)
I have not flown United in years without the VERY strong feeling that they were using "The model was, screw the customer ... Trick people, get them to buy, get them to come, and then charge them a whole bunch of fees that they aren't expecting."
United requires me to pay extra in order to choose a seat, sit with my travel companions, have a carry-on bag, change or cancel my reservation. The require me to pay significantly more to do any of those things.
The CEO of United has been sniffing his own farts for s
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United requires me to pay extra in order to choose a seat, sit with my travel companions, have a carry-on bag, change or cancel my reservation. The require me to pay significantly more to do any of those things.
United has the highest average revenue per passenger in the US (United $329, Delta $308, American $218, Southwest $196), so the comment about United squeezing customers has some basis.
United Airlines CEO Scott Kirby has harsh words for budget carriers, calling their business model "dead."
United flew 173 million passengers in 2024, and Southwest flew 140 million. Southwest did pretty well for a "dead" business model.
Of course, this is before private equity gets to pummel Southwest into becoming more like United. So, we'll see what Southwest looks like in a few years.
Ryanair: current revenue £11.21 Billion (Score:2)
Sure buddy (Score:2)
Well, that's rich (Score:2)
Why is United's fleet so old? (Score:2)
Every time I fly United I'm taken aback by how old and worn out their planes are, especially the interiors. How come United has one of if not the oldest fleet, but Spirit and Frontier with their "dead" model can afford far newer planes?
https://ancillary-proxy.atarimworker.io?url=https%3A%2F%2Fthehill.com%2Fchanging-america%2Fsustainability%2Finfrastructure%2F4663413-which-airlines-have-the-oldest-planes%2F
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Those planes are not old, they are "vintage". Just change your perspective.
They are not "falling apart", they are "organically adjusting to the surrounding environment".
United is a budget airline and uses the same model (Score:2)
Instead of tacking on unexpected fees, they unexpectedly subtract value from your flying experience in other ways. Arm rests that are too short so they don't carry any of your body weight, flights that are delayed or cancelled due to maintenance or crew problems, and (like all airlines) selling the same space to two customers: the area behind each seat is intended for two customers to share, but if either one actually uses it, they are a jerk. They sell more room for carry-ons than they really have, so econ
Reorienting view (Score:2)
I used to be pretty pissed with the nickel and diming of the whole industry until I realized that maybe we've just had it too good due to an antiquated model. When you go to a sports game, are all seat the same price? Do they give you free food and drinks? Do you have tons of legroom?
There's no fundamental rule that says all seats on a plane should be the same price, or that passengers are entitled to jam an oversized bag into overhead luggage without a fee, or that passengers are entitled to a snack and d
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To be frank, (Score:2)
their customers are short people. Small seats don't bother them. Sounds profitable to me:
1. Scare away large customers via small seats
2. Have more seats per plane
3. Sell more tickets
4. Profit!
Re: To be frank, (Score:2)
Gold standard for pricing system implementers (Score:2)
You might not know but there is a whole IT field around a server type called a pricing system used to update an entire product catalog's prices based on tons of information, guidelines, strategies, timing, etc. Anyway there was a guy on the team who was a pricing expert, I think he was in the professional pricing society (it's a thing) and yearly went to a big pricing conference in L.A. and said the airlines were the dream all pricing pros salivate about with how they are able to roll out dynamic surge pric
Too bad about Southwest (Score:2)
It saddens me that the new CEO and board at Southwest seem so deadset on transforming into an also-ran in the industry. Kelleher built something truly great. Kelly, unfortunately, neglected upkeep leading to poor policy choices and utter performance failure of their scheduling system. Now Jordan seems intent on cooking the goose.
oh ye mighty (Score:1)
Look upon your Masters, and despair...