Why US travelers are snubbing budget airlines

Major US airlines posted big Q3 2023 profits, but their low-cost counterparts' earnings suffered. Is this the beginning of the end of budget carriers

As prices rise across the globe, many Americans are looking to save money where they can, including travel. Yet the most recent slate of earnings reports from major US airlines indicates consumers aren't necessarily opting for budget airlines amid an inflation economy.

Key takeaways

• As pandemic-era travel restrictions lifted, US consumers' desire to travel overseas spiked, flying internationally on major airlines, something most budget airlines don't do;
• Experts say, people traveling during an inflation economy prefer to fly major, full-service carriers. That's in part because they're largely higher earners who aren't feeling the financial squeeze as much, and are willing to pay for the amenities budget carriers charge for, like checked baggage and seat selection;
• Ultimately, even as the larger airlines pressure their smaller, cheaper counterparts, that doesn't mean low-cost carriers are in a death spiral – they find themselves more in something of a "wrong place at the wrong time" scenario.

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