It's hardly a secret that ultra-low cost carriers such as Frontier and Spirit Airlines consistently rank lowest in customer satisfaction. And according to United CEO Scott Kirby, this is ultimately going to spell their doom. Illustrating his point, Kirby lobbed some scathing criticism at budget airlines during a podcast appearance this week and did not hold back.
"I think they're going out of business. It's a fundamentally flawed business model," Kirby said on Monday's new episode of The Air Show podcast. "The customers hate it, the customers have voted, and they're going out of business."
When it comes to the recent decision by Spirit to eliminate change fees, Kirby was asked if he predicted it and whether he was just "laughing hysterically" that the airline was finally learning to prioritize customer service.
"Well, I watch them completely uproot their network... then switch to, we're not gonna have change fees, we're not gonna charge ancillaries, completely change their business model," he responded. "But we went from low-cost leisure infrequent travelers to now we're gonna be premium business airlines."
"To me, it feels like the internal acknowledgement that the business model doesn't work, let's try something radically different," Kirby explained.
"But the fundamental issue is they haven’t treated customers right," he continued. "The redline was when one of the ULCC (Ultra Low-Cost Carriers)'s started charing $99 for your carry-on bag and paying their employees a commission to collect the $99 from you. You can go watch the videos online of taking women's purses and dropping them from two feet above the bin and they say, 'You owe me $99!'"
Last summer, a number of videos went viral on social media blasting Frontier for the policy, which charged customers a $99 fee for "oversized" carry-on baggage that supposedly did not meet criteria to fit in the overhead bins. However, it came out that the airline was actually giving gate agents a $10 commission for every bag they rejected, leading to an influx of customers being erroneously charged.
"What I said to our team was, you can do that to a customer once—you can, you've got them trapped at the gate, you can do it once—but you don’t get to do it to them twice," Kirby added. "And those airlines grew big enough that they actually need repeat customers."
Whether or not ultra-low cost carriers will heed Kirby's warning remains to be seen. Though, if he's right, it may already be too late. Both companies are struggling to remain profitable despite record air travel.
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