JetBlue, meanwhile, is under real financial pressure, trimming domestic capacity in 2025 and withdrawing some guidance as demand softened while simultaneously pushing deeper into the North Atlantic with new Boston–Europe routes. Then came Blue Sky, a May 29, 2025 collaboration with United that links loyalty earning and redemption and extends network choice. This is effectively “virtual consolidation” even if no equity changes hands. Regulators have since allowed it to proceed, a striking pivot after the court blocked JetBlue’s 2024 Spirit Airlines takeover on antitrust grounds.
At the ultra-low-cost end, the news is stark. Spirit filed for Chapter 11 again on August 29, 2025, the second time in a year, underscoring how fragile the ULCC model has become in today’s demand, cost, and financing environment. That distress didn’t go unnoticed in Denver: Frontier Airlines promptly stepped into Spirit’s core leisure markets, overlaying routes and luring price-sensitive flyers, which is also an aggressive competitive squeeze without a merger. Frontier’s network moves are paired with a well-documented reliance on add-on fees (bags, seats, boarding, agent assistance), a revenue mix that pushes many travelers’ “true trip cost” closer to legacy levels.
So, does the consumer win or lose?
Short-term: Mixed outcomes. Base fares can still look cheap on screens, and by one key yardstick air travel remains a relative bargain. The Bureau of Transportation Statistics reports the inflation-adjusted average U.S. domestic fare was $397 in Q1 2025, down from Q4 and broadly consistent with the long-running trend of lower real ticket prices versus prior decades. But BTS also reminds us those averages exclude optional fees—precisely the place the new “converged” models are leaning harder. However, if the definition of “optional” fees includes everything such as an actual confirmed seat assignment unless you pay more per seat, then likely airfares are becoming a bargain no more.
Medium-term: Consumers lose leverage. The historic value of ULCCs wasn’t just $29 teasers; it was discipline. When a Spirit or Frontier entered a city-pair, legacy carriers priced more sharply. With Spirit retrenching in bankruptcy and Frontier focusing on selective overlays rather than nationwide expansion, that price discipline will be more episodic – especially on non-hub leisure routes where one challenger kept everyone honest. JetBlue’s United alignment improves connectivity and loyalty economics, but it is not a substitute for an independent, aggressive third (or fourth) price-setter on every lane.
Long-term: The “low-cost” label changes meaning altogether. Southwest’s shift to fare bundles, assigned seats, bag policies and even global partnerships pulls it into a world where product segmentation and ancillary optimization matter more than a single price identity. JetBlue’s strategy now looks like “premium-lite” with transatlantic focus plus partner-powered domestic breadth. Frontier will remain the most “bare-bones,” but its à-la-carte stack raises the all-in price for many travelers. The practical effect: fewer truly spartan ULCC options; more parity across brands; and a consumer experience where status, co-brand cards, and fare family selection often matter as much as base price.
Still, it’s not all grim for flyers or for the system. Aviation health matters. If this convergence stabilizes airlines’ balance sheets, reliability should improve, and network breadth can endure through down business cycles and crises. And even after fees, U.S. air travel remains comparatively affordable in real terms versus many prior eras, with industry trackers also noting that airfares are only modestly higher year-over-year and still below 2019 levels on a comparable basis.
What would keep this from becoming a true consumer loss:
- Transparent all-in pricing. Require clear, early disclosure of bag/seat/agent fees in search and booking so shoppers compare total trip cost, not just the headline fare. (BTS fare series excludes options; consumers shouldn’t have to be forensic accountants to fly!)
- Interline-lite protections. When a ULCC flight cancels, stranded passengers often have poor re-accommodation options. Limited, regulated “distressed transfer” protocols during irregular ops would protect price-sensitive travelers without forcing full airline partner alliances.
- Real slot and gate access for challengers. If ULCCs are going to keep legacy carriers honest, they need to have a fair chance of accessing gates in slot-constrained airports. That means enforcing use-it-or-lose-it rules and prioritizing competition in slot divestitures.
- Guardrails on “virtual consolidation.” Partnerships like Blue Sky can be pro-consumer, but oversight should ensure they don’t function as de-facto mergers on competitive city-pairs. Monitor share shifts and fare outcomes where loyalty integration is deepest.
The bottom line: The era of a distinct “low-cost” sector with separate products and separate promises is fading fast. The next era looks like one big market of segmented products, aggressive ancillary monetization, and selective partnerships. If transparency improves and access remains open for challengers, the U.S. can have a strong aviation system and keep flying a good inflation-adjusted value.
If not, we’ll feel the loss of those Spirit yellow, JetBlue blue, and Frontier green colored tails… not necessarily because they were lovable, but because they kept every airline pricing manager’s pencil sharp.
