Originally Posted by
GoCats67
The problem for smaller carriers and especially for LCCs is that the customer base is not the same as the legacies and that customer base is not as sought after as the legacies, so credit card companies are not as willing to pay high prices for miles to get that less desirable customer base. This is not my opinion, this is the reality of what the Credit Card companies are doing. This is not some sort of slam on those customers, it is just the realities of the business and who is willing to pay what for credit cards/miles/perks/loyalty.
This is what it comes down to, different business models.
Ancillary revenue matters and ticket pricing industry-wide reflects that, but if credit cards and miles went away the rest of the industry would adapt and adjust (likely a bit smaller in the end).
The issue for ULCC's is that the legacies started offering seats in the back with the ULCC pricing and ancillary revenue model. Also as you say ULCC customer base isn't a great credit card market, 30% rate, $500 limit, and lots of defaults.
Also an issue is "ULCC"... it's "Ultra Low COST Carrier", not "Ultra Low REVENUE Carrier".
I'm not advocating for Discount Airline Pilot Guys but I also honestly don't know if the ULCC model works with legacy labor scales.