Originally Posted by
bluesky24
ULCC’s will also see their costs increase over time as their employee groups grow larger and negotiate better contracts and as their aircraft age. The problem is they compete on price and will struggle to increase revenue to match their increased costs. This is my opinion only
Your opinion is valid.
Startup airlines have these advantages if they can get off the ground. Also governments tend to favor startups with slots/gates and other freebies which would never be available to established carriers.
Long term as their costs increase and/or the economy tanks, startups tend to either fail or get absorbed into large carriers where the economy of scale exists.
Jetblue is an unusual startup winner IMO, in that they have achieved product differentiation and do not hinge their entire business model on cheap labor and low Mx costs (which don't last).