I'm not ignoring scale at all. Scale is meaningless if you are not using is to create economies of scale. Its also meaningless in a segmented market. This means its a market where the total addressable revenue from the segment you are competing in is limited. So maybe "discount air travelers" is really just a limited segment, and once the ULCCs have captured effectively all of that market, scaling doesn't do anything because just because you are growing doesn't mean more people magically enter the supply side of your market.

Its possible this is why were Jetblue, Frontier, Spirit all profitable when they were small without scale and now that they are larger they are struggling? Spirit didn't start losing money until it got "scale". Scale is only a single factor in how a business operates. WeWork had scale. It also lost money at scale.

How much scale do United and Delta actually need?

CC programs are a red herring. So much misinformation and too much weight placed on their actual profit value. Its like when I was told as a new hire in the 90s that we could fly empty planes and make money because we carried so much US Mail. It was completely hyperbole.

Nothing you are saying correlates to what's happening in the marketplace. If getting bigger for the sake of getting bigger was necessary United and Delta would have already bought up all the other decent airlines. Jetblue is a decent airline, but its still operating like its 2015 and hasn't pivoted, just like the ULCCs haven't pivoted.

Scale didn't help Blockbuster or Sears. They also didn't pivot when they needed to.

Why don't Frontier, Jetblue and Spirit just merge into one big airline. They'd have scale, right? They'd be able to "compete with United and Delta finally". But would they make money or just lose more money at scale. Are any passengers flying to Asia Europe or Hawaii flying on ULCCs? Maybe a couple on Jetblue? What about premium travelers from coast to coast? Only so make people want to fly from Raleigh to Orlando.

You need product-market fit, a viable business plan and relentless execution to make money in any business. You just keep shouting "but scale" but that's an incredibly superficial way to look at how businesses make a profit, especially ones that only serve a small niche, ultra discount passengers, and don't really offer a destination that almost every other airline in the US can fly to efficiently.

Okay, just as a recap, it seems you think ULCCs are the worst.

Its a business model that doesn't work anymore. That market segment has been fully exploited and the entrance of the Big 3 adding basic economy to their massive fleets washed the profit of that segment out of the industry for airlines where that is their sole source of income. It proved that consumers, when faced with a choice between no frills, and the benefits of a major network airline have decided to choose the major airlines instead. This is why Andrew Nocella called the ULCC "spill carriers". Its an apt name. Spirit, Frontier and others are fighting each other over that spill. That's why ULCC stocks are going up as the likelyhood of Spirit going away is increasing, and going up far more as a percentage than the full service network carriers.

If what you say is true, why isn't it happening? And why is all the stuff I'm saying happening instead?

Nobody would stop anyone from buying Spirit, but they aren't buying it. I wonder why that is? Too expensive for what value they would bring maybe? But if its only able "scale" then all the airlines should be trying to buy them, but they aren't.

Because its not all about scale.

Everyone thinks that. That’s the problem.

You guys really should bail. Remember all the posts of ex-Spirit captains saying they used to tell FOs to leave and now they’re junior to them by thousands? Rinse and repeat here. Frontier is done. Probably oversized for what it can financially generate, meaning all that seniority you’ve accrued will someday get eaten up when the lion comes home to roost. I’m officially out of here in just a few days.

Future looks bright at United, Delta, Alaska, and maybe even Southwest. Proud to say I’m joining one while aspiring yet to make another. I wish my friends here the best in getting out; things indeed are bleak as ****.

Maybe not the worst but he/she's got a point.

In this oligopoly of 4 viable airlines, none of the others are in a position to increase market share (unless they have some sort of niche the Big 4 can't fill - like Allegiant). Market share increase may not be necessary to be profitable but those in charge of the rest don't seem to be smart enough to position their airlines to do so. Say what you want about DL and UA but their CEOs are outsmarting the rest. Despite the subsidiary factions associated w/ running an airline and CC rewards program, there is still something to be said about the person who offers a good product that people want that makes a profit. F9 made MANY crucial strategic decisions (no wifi, widespread network, only 2 different seating configs, etc) early on that have proved to be VERY poor. I'm sure all of the others have similar stories.

The best thing that could happen for all the rest would be some national black swan or major industry event that changes the desires of air travelers to need cheaper (non-comfort) air travel. Both UA and DL will need to take on debt to update their fleets (what AA already did) so there is some risk to their game but even with that, their scale is such that they can pivot as needed and/or wouldn't be allowed to fail by the US govt. Scale is important but only to the point where it allows adequate balance of product offering. Those w/ scale that fail generally either emphasized certain parts of it incorrectly.

It's funny how we all see the game has changed in the last 6-9 years yet we all continued to do the same thing and "hope" for better. How BB kept his job that long is mind-blowing but all that matters now is what Dumpster does next.

Every airline that ever went under had a CEO making millions thinking they were good at their job.

I don’t recall saying scale was then end all be all and a factor all on its own. Perhaps you’re lumping me with somebody else? Or perhaps nobody said that and you’re putting words in their mouth and responding to what you think they mean. That’s more likely.

What?! You think Frontier is in trouble? This is the first I’ve heard of it from you.

The last few pages have mostly been a great discussion.

Ive been at Frontier for well over a decade and have seen this business model go from extremely profitable to questionable for long term survival. The model hasn't changed at all, but the economy and market has.

I do believe that there's absolutely a place in the market for Frontier (or insert generic ULCC) but the current market isn't favorable to the model. Times change, markets change and economies change. I don't know what the future holds, but I don't think the crazy, post covid spending spree this country has been on for the last 5 years will last forever. I don't know that the economy turns in our favor again or not, but it sure might.

One thing I do find pretty interesting though is that the entire profitability of the industry is made by just 2 airlines, United and Delta. They just seem to have cracked the code. I think that as an industry with 10 major airlines and only 2 making good money is awful strange and concerning. Apparently, it's all the credit card and loyalty programs making the money.

AA lost 5 Billion flying the planes and made 5 Billion on the credit card program. That's f-cked. I don't think that is a good thing for the industry. They just broke even.

JetBlue is bleeding out
Spirit is bleeding out
AA just barely staying above water
Frontier is bleeding, just not fatally
Southwest is doing OK for now but in the process of alienating their loyal customers. No one knows how that will play out.

United and Delta are absolutely crushing it.

I don't think it's going to stay that way forever.

Keep saving money folks. If you're aren't putting money in your 401k, you probably should be.

Tied for worst. AA won’t even let us be first place worst place.