United, Delta, and American Declared Victors Over Spirit in Budget Travel Sector as IATA Defends Ryanair, EasyJet, Wizz Air, and Vueling as Leading Low-Cost Carriers Abroad

Wednesday, June 4, 2025

United, Delta, and American have emerged as dominant players in the budget travel market by undercutting low-cost rivals like Spirit through competitive basic economy fares, while also offering broader networks, loyalty perks, and stronger brands that appeal to cost-conscious travelers. This shift has allowed the major U.S. carriers to reclaim ground once held by ultra-low-cost airlines. However, IATA Director General Willie Walsh pushed back on the idea that the low-cost model is obsolete, pointing to the continued growth and profitability of Ryanair, EasyJet, Wizz Air, and Vueling, which remain highly successful in international markets where true cost advantages and flexible operating models still give them a clear edge.

United’s CEO Declares the Low-Cost Model Dead in the US

United Airlines CEO Scott Kirby didn’t hold back during the IATA annual general meeting in Delhi. According to him, the era of low-cost carriers dominating budget travel in the US is over. In his view, full-service giants like United, Delta, and American have already taken back the ground once held by airlines like Spirit. With basic economy fares offering similar pricing but better service and stronger brand appeal, Kirby believes the traditional LCC model has lost its competitive edge on home soil.

He argued that United and its peers have essentially absorbed the low-fare market by combining cost-friendly ticket options with powerful loyalty programs, global reach, and a broader flight network. In short, he thinks legacy carriers are now doing budget travel better than the budget airlines themselves.

Spirit and Southwest Struggle as Legacy Carriers Expand Market Share

Kirby didn’t just talk strategy — he went further by claiming that United has taken over the brand-loyal customers that once made Southwest Airlines a dominant force. Spirit, meanwhile, continues to face turbulence in 2025 with ongoing profit pressures, route cuts, and fierce competition from the same major airlines it once disrupted.

The big three — United, Delta, and American — are now winning over passengers who might’ve once chosen Spirit for price alone. With the added benefit of frequent flyer perks and international service, these carriers have carved out dominance even in the low-fare segment. Kirby framed it as not just competition, but a complete overtaking of the LCC model within the U.S.

IATA’s Willie Walsh Pushes Back on Kirby’s View

But IATA Director General Willie Walsh pushed back hard on the notion that low-cost carriers are finished — at least outside the U.S. Walsh agreed that in the American market, the cost advantage for budget airlines has thinned considerably. He acknowledged that Kirby “may have a point” when speaking about the U.S. in isolation.

However, Walsh emphasized that globally — and especially in Europe — the low-cost model isn’t just alive, it’s thriving. Ryanair, EasyJet, Wizz Air, and Vueling are not only holding their ground but expanding aggressively, capturing millions of passengers and consistently reporting strong financial results.

Europe’s Budget Airlines Continue to Thrive

Walsh spotlighted how European low-cost carriers have remained resilient and successful. Ryanair, for example, continues to dominate Europe with a growing fleet and unmatched frequency on popular routes. EasyJet and Wizz Air have steadily expanded both within Europe and into new markets like the Middle East and Central Asia. Vueling, backed by IAG, has built a loyal customer base across Southern Europe.

Why the US Model Doesn’t Work for Low-Cost Airlines Anymore

Walsh explained that one of the main reasons U.S.-based low-cost carriers like Spirit struggle is because the cost gap between them and the full-service carriers has significantly narrowed. In Europe, budget carriers operate at lower costs and access secondary airports more efficiently. In the U.S., however, labor expenses, regulatory factors, and shared access to congested major airports mean Spirit’s and Frontier’s operating costs often mirror those of United or Delta — wiping out any meaningful price advantage.

As a result, customers who once flocked to LCCs for affordability now find similar fares on legacy airlines — but with more comfort, more routes, and better rewards.

United’s Growth Strategy Gives It a Competitive Edge

Walsh also pointed to United’s long-term strategy as a reason for its growing dominance. The airline’s massive aircraft orderbook gives it an advantage few others can match. As Kirby continues expanding United’s fleet, the airline positions itself to meet demand both domestically and internationally — and outpace competitors who lack the resources or scale to do the same.

Legacy vs Low-Cost: Two Models, Two Realities

In the end, Walsh stood by the value of the low-cost model — just not in the same way Kirby sees it. He acknowledged that the playing field in the U.S. has changed, making it harder for carriers like Spirit and Frontier to survive. But globally, the LCC model remains essential.

While United, Delta, and American tighten their grip on the U.S. market, Ryanair, EasyJet, Wizz Air, and Vueling are writing a very different story across Europe. These low-cost giants continue proving that when costs are low, strategies are nimble, and demand is strong, the budget airline model still has plenty of altitude left.