Spirit, Frontier, and Southwest: Low-Cost Carrier Updates

The US low-cost carrier (LCC) landscape is undergoing dramatic transformation as 2025 draws to a close. Spirit Airlines battles through bankruptcy restructuring, Frontier Airlines aggressively expands its network, and Southwest Airlines prepares to abandon its legendary open seating policy. Here is everything travelers need to know about the current state of America’s budget airlines.

Spirit Airlines: Fighting for Survival

Spirit Airlines finds itself in the most precarious position among the three major budget carriers. In August 2025, Spirit Aviation Holdings filed for Chapter 11 bankruptcy for the second time in less than a year, seeking to build what executives called “a stronger foundation” for America’s leading value airline.

The restructuring has brought significant financial support. A bankruptcy court approved a $475 million debtor-in-possession financing facility from existing bondholders, with $200 million immediately available to keep operations running. In December 2025, Spirit secured an additional $100 million lifeline from creditors by amending its credit agreement.

Spirit reached agreements with its largest aircraft lessor, AerCap Ireland Limited, which included a $150 million payment to Spirit in exchange for rejecting 27 aircraft leases. The airline also negotiated cost-saving agreements with pilots represented by ALPA and flight attendants represented by AFA, both of which are pending final approval.

The human cost has been substantial. Spirit announced 150 job cuts across corporate and operational roles in November, following furloughs of approximately 1,800 flight attendants and at least 270 pilots earlier in the year. Management’s October regulatory filing projected the airline will not return to profitability until 2027, forecasting $804 million in losses for 2025 and a $145 million deficit in 2026. The company has not posted a profit since 2019.

Perhaps most significantly, Spirit is now in discussions to merge with Frontier Group Holdings. This represents a remarkable turnaround after Spirit rejected an 11th-hour Frontier offer in January, calling the $2.2 billion proposal “inadequate and unactionable.”

Frontier Airlines: Aggressive Expansion Mode

While Spirit struggles, Frontier Airlines has embarked on its most ambitious expansion in years. The Denver-based carrier announced 22 new routes launching in November and December 2025, spanning destinations across the United States, Caribbean, and Latin America.

Atlanta has emerged as a major focus for Frontier’s growth strategy. The airline launched six new routes from Hartsfield-Jackson Atlanta International Airport in December, including service to St. Maarten, The Bahamas, Turks and Caicos, and Mexico. With these additions, Frontier now serves 61 destinations nonstop from ATL.

Looking ahead to 2026, Frontier announced 23 additional new routes scheduled for late winter and early spring, with four new Las Vegas routes to Minneapolis, Memphis, Indianapolis, and Milwaukee beginning in March.

Frontier is also transforming its product offerings under “The New Frontier” initiative. UpFront Plus seating provides extra leg and elbow room in the first two rows with a guaranteed empty middle seat. Most notably, Frontier will begin offering First Class seating in early 2026, marking a significant departure from its traditional ultra-low-cost model.

The airline operates more than 100 A320 family aircraft and maintains the largest A320 NEO fleet in the United States, giving it one of the youngest and most fuel-efficient fleets in the country. However, leadership transition added uncertainty as President James Dempsey was named interim CEO following the departure of Barry Biffle.

Southwest Airlines: End of an Era

Southwest Airlines is undertaking its most significant transformation since the company’s founding. Beginning January 27, 2026, the airline will abandon its iconic open seating policy in favor of assigned seating, a change that sent shockwaves through the aviation industry.

Seats went on sale July 29, 2025 for travel starting in late January 2026. The new system offers three seating categories: Standard seats located near the back of the cabin, Preferred seats closer to the front, and Extra Legroom seats near exit rows offering 3-5 inches of additional space.

Southwest’s research revealed that 80% of current passengers and 86% of prospective travelers prefer assigned seating. Dissatisfaction with open seating had become a top reason for customers switching to competitors.

The airline also introduced four new fare bundles: Basic, Choice, Choice Preferred, and Choice Extra. A-List Members receive enhanced benefits including free Preferred and Standard seat selection at booking, free Extra Legroom upgrades within 48 hours of departure, and the first checked bag free for up to eight additional passengers on the same reservation.

Strategy Comparison: Three Different Approaches

Each carrier has adopted a distinct strategy for navigating the challenging LCC environment:

Spirit Airlines is focused purely on survival, leveraging bankruptcy protection to shed costly aircraft leases, negotiate labor concessions, and potentially merge with a competitor. The ultra-low-cost model faces existential questions about viability.

Frontier Airlines is betting on growth through network expansion and product enhancement. By adding First Class and improving seat options while maintaining low base fares, Frontier aims to attract a broader customer base willing to pay for upgrades.

Southwest Airlines is abandoning what differentiated it from competitors, embracing industry-standard assigned seating while maintaining its free checked bags policy. The strategy acknowledges that customer preferences have evolved.

What Travelers Should Know

For passengers considering low-cost carriers, several factors merit attention. Spirit Airlines tickets remain valid through bankruptcy, and the airline continues operating its normal schedule. However, travelers should maintain flexibility and consider travel insurance for Spirit bookings given the uncertainty.

Frontier’s aggressive expansion means more route options, particularly from Atlanta and Las Vegas. The upcoming First Class product could offer genuine value for travelers seeking premium service at budget prices.

Southwest travelers booking for late January 2026 and beyond should familiarize themselves with the new seating system. A-List status holders will enjoy significant advantages under the new structure.

Fare Comparison Tips

When comparing fares across these three carriers, travelers should look beyond the base price. Spirit and Frontier’s advertised fares typically exclude seat selection, carry-on bags, and refreshments. Southwest’s fares include two free checked bags, which can represent significant value for family travelers.

Use fare comparison tools that calculate total trip cost including baggage fees. Consider credit cards that offer statement credits for checked bag fees on Spirit and Frontier. Book directly through airline websites for the best policies on changes and cancellations.

Future Outlook

The US low-cost carrier sector faces continued consolidation pressure. A Spirit-Frontier merger would create a more formidable competitor to legacy carriers and Southwest, though regulatory approval remains uncertain. Southwest’s transformation could attract passengers who previously avoided the airline due to its boarding process while potentially alienating longtime loyalists.

Rising operating costs, including fuel and labor, continue challenging the ultra-low-cost model. Airlines that successfully blend low base fares with optional premium products appear best positioned for long-term success. For travelers, the evolving competitive landscape should ultimately deliver more choices and potentially better value as carriers fight for market share.