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NEW YORK — In Season 10, Episode 4 of The Airways Podcast, hosts Rohan Anand and Vinay Bhaskara take stock of an airline industry that feels markedly different from just a year ago.
The conversation ranges from the collapse of Spirit Airlines (NK) and the long-term viability of the ULCC model to the strategic positions of United (UA), Delta (DL), American (AA), Southwest (WN), JetBlue (B6), and the smaller carriers now competing for the space Spirit leaves behind.
1. Spirit Airlines: A sudden exit with longer-term consequences
The defining U.S. airline story of early 2026 is Spirit’s collapse. While the airline’s exit may appear abrupt to passengers, Rohan and Vinay argue that it reflects structural pressures that had been building for years: rising fuel and labor costs, pressure from legacy-carrier basic economy products, a difficult Pratt & Whitney engine situation, and the broader challenge of sustaining a bare-bones ULCC model in the U.S.
Vinay’s central point is that not all of Spirit’s flying will be replaced equally. In large markets where the carrier served as a low-fare “spill” operator—adding capacity alongside legacy carriers—some routes may simply lose seats. That matters because Spirit’s presence often kept the lowest advertised fares down, even for travelers who ultimately chose another airline.
The assets, however, will not disappear overnight. Aircraft, airport gates, pilots, crews, and real estate are likely to be absorbed across the industry over time. Frontier (F9), JetBlue, Breeze (MX), Avelo (XP), Allegiant (G4), Southwest, and the large network carriers all have opportunities to expand selectively in markets where Spirit once had a meaningful footprint.
The result may be a more rational capacity environment for airlines—but less competition and potentially higher fares for travelers in certain city pairs.
2. The new U.S. airline hierarchy
Vinay lays out a useful framework for the U.S. airline landscape after Spirit.
At the top sit United and Delta: global network carriers with strong premium positioning, large international systems, powerful loyalty programs, and the ability to generate stronger margins from business and high-yield travelers.
American and Alaska (AS) form a second group: full-service network airlines with important domestic strengths, but less of the global scale and premium revenue momentum enjoyed by UA and DL. Alaska remains financially healthier and more regionally focused, while American continues to wrestle with how to transform its scale into stronger profitability and a more compelling premium proposition.
Southwest and JetBlue increasingly occupy a middle tier. Both now look more like network carriers than the point-to-point disruptors they once were, with concentrated hubs, larger loyalty ambitions, and more complex route structures. Southwest’s (WN) assigned seating transition and JetBlue’s (B6) growing focus on Fort Lauderdale (FLL), Boston (BOS), and New York (JFK) underscore that shift.
Below them, the low-cost segment is increasingly split between Frontier, the remaining nationwide ULCC, and carriers such as Allegiant, Breeze, and Avelo, which rely more heavily on secondary airports, leisure demand, limited-frequency flying, and thinner point-to-point routes.
3. Why the ULCC model is under pressure
The conversation makes the case that the U.S. ULCC model has become harder to sustain because the legacy carriers learned how to compete at the bottom of the market.
Basic economy allows AA, DL, and UA to match low headline fares while retaining the advantages of larger networks, corporate contracts, loyalty ecosystems, premium cabins, and stronger connecting traffic. At the same time, larger narrowbodies, higher labor costs, and rising operational expenses make it harder for a carrier to rely solely on ultra-low base fares and ancillary revenue.
The contrast with Europe is telling. Ryanair (FR)-style flying is more viable in a market with a denser network of secondary airports, lower labor costs, and more latent demand for low-frequency leisure routes. In the U.S., the geography, airport structure, and cost base are different—and those differences make a pure ULCC strategy more vulnerable.
4. American Airlines: scale without enough premium strength?
The hosts return to a familiar question: why has American, despite its size, struggled to match the financial and strategic momentum of United and Delta?
Vinay argues that American has spent too long operating with a cost-cutting mindset that does not fully align with the revenue needs of a large global carrier. The airline has premium seats and an international network, but building a true premium airline requires more than adding lie-flat products or lounges. It requires consistently investing in service, reliability, connectivity, technology, and the overall customer experience.
United, by contrast, has increasingly positioned itself as a premium global airline with a clear growth strategy, while Delta continues to refine a highly profitable, loyalty-driven model. American’s challenge is not its network—it has major hubs at Dallas/Fort Worth (DFW), Charlotte (CLT), Miami (MIA), Chicago O’Hare (ORD), Philadelphia (PHL), Phoenix (PHX), and Washington National (DCA). The challenge is translating that network into stronger margins and a more cohesive customer proposition.
5. A more volatile 2026
Both hosts agree that 2026 is shaping up to be less stable than the post-pandemic recovery years. The industry had been moving toward a new equilibrium after the travel rebound of 2021 through 2025, but rising fuel prices, geopolitical instability, capacity cuts, and structural changes among U.S. carriers are creating a more uncertain outlook.
Rohan compares the current atmosphere to a difficult operating environment where airlines must prioritize summer demand, leisure resilience, and disciplined capacity rather than broad expansion. Vinay is somewhat less pessimistic, but still expects lower operating margins and softer traffic growth compared with 2025.
They also note that airlines outside the U.S.—including Lufthansa (LH), Singapore Airlines (SQ), and AirAsia (AK)—have begun trimming capacity despite generally resilient travel demand. That is a sign that the current volatility is not confined to one market.
6. Product, loyalty, and the passenger experience
The episode closes with a more personal look at recent travel experiences. Vinay highlights Cathay Pacific (CX) First and Business Class, IndiGo (6E) Business Class, British Airways (BA), and United’s expanding Polaris Lounge access for premium transcontinental travelers.
For Vinay, United’s (UA) biggest remaining passenger-experience gap versus Delta is not necessarily the hard product, but details such as onboard connectivity, live television, and soft-product consistency. Starlink-equipped UA flights could help close that gap quickly, while DL continues to benefit from a stronger day-to-day domestic experience.
Rohan also highlights Southwest’s evolution, noting that assigned seating and product unbundling may make the airline more attractive to travelers who previously favored the flexibility of Spirit or other low-cost carriers.
Airways analysis
Our analysis is that Spirit’s exit is not simply the end of one airline—it is a signal that the U.S. market is entering a new phase. The old divide between “legacy” carriers and low-cost competitors is blurring as large airlines become better at selling stripped-down fares, while smaller carriers add premium seating, loyalty programs, and more sophisticated distribution.
The winners in 2026 may be the airlines that can combine disciplined capacity with strong premium revenue and clear network strategy. United and Delta appear best positioned. American has the scale to compete but still needs to prove that it can turn its network into a consistently stronger commercial product. Meanwhile, travelers may eventually discover that Spirit’s absence has a more tangible impact than expected—especially when the next low-fare option disappears from the search results.
The Airways Podcast is hosted by aviation analysts Rohan Anand and Vinay Bhaskara and produced by Airways Digital Editor Helwing Villamizar. New episodes are available across major podcast platforms.
Featured image: Chris Goulet/Airways
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