United Airlines CEO deems low-cost airline business model as 'shoddy and defunct'
In a bold, tell-it-like-it-is rant at the Wall Street Journal's Future of Everything conference, United Airlines CEO, Scott Kirby, called out the low-cost airline model as a "crappy" business strategy, claiming it exists solely to take customers for a ride—literally and figuratively.
In the months following this outburst, United teamed up with JetBlue Airways, a carrier often considered a low-cost rival. Kirby clarified that JetBlue's mission, founded on customer satisfaction, is far from the bare-bones, money-saving tactics of true low-cost carriers.
According to Kirby, the budget airline trick is simple: lure passengers with cheap tickets and then load their wallets with a slew of unexpected fees, buried in complicated legalese. He argued that this model worked in the early days, but ultimately crumbled under the weight of consumer dissatisfaction.
While JetBlue is occasionally categorized alongside budget airlines, industry analysts often classify it as Hybrid, or 'premium-low cost,' due to its commitment to passenger comfort, offering features like free Wi-Fi, in-flight entertainment, and extra legroom, amenities rarely found on ultra-affordable airlines such as Spirit or Frontier.
Dubbed Blue Sky, this partnership with JetBlue grants fliers the ability to accumulate and redeem frequent flyer miles across both airlines. Additionally, elite members will reap reciprocal perks. The alliance will also give United access to seven daily round-trip flights out of JetBlue's new Terminal 6 at JFK starting in 2027, a significant upgrade as United's presence at JFK is minimal at the moment. This partnership solidifies United's foothold in one of New York's most crucial airports.
In response to Kirby's criticisms, Frontier Airline's CEO Barry Biffle defended the ultra-low-cost model, claiming that Kirby must be referring to other carriers. Biffle boasted that Frontier 'offers a free carry-on bag, free changes, and free seat assignments in our economy product.' Other low-cost airlines, including Ryanair, have yet to comment on the matter.
Kirby's judgment comes at a time when the dividing line between low-cost and traditional airlines is becoming increasingly blurred. Extra charges for seat selection, checked baggage, and in-flight refreshments have crept into the industry as a whole.
- As part of their strategy to differentiate from traditional low-cost carriers, United and JetBlue's partnership, Blue Sky, allows fliers to accumulate and redeem frequent flyer miles and offers amenities like free Wi-Fi and in-flight entertainment.
- Contrasting with accusations of deceptive practices, Frontier Airlines' CEO, Barry Biffle, defended the ultra-low-cost model, emphasizing free carry-on bags, free changes, and free seat assignments in their economy product.
- Amidst the emerging trend of blurred lines between low-cost and traditional airlines, finance experts predict that the prevalence of charges for seat selection, checked baggage, and in-flight refreshments will continue to expand across the aviation business.
