Spirit's troubles highlight a broader market trend where budget-conscious consumers cut back while the wealthy splurge on luxury. This pattern, once confined to goods, is now evident in services like travel, signaling a potential risk for other budget-focused businesses and an opportunity for luxury brands.

Ryanair's success didn't just win market share; it fundamentally reshaped the entire European airline industry. Its model of unbundling every service to achieve the lowest base fare forced legacy carriers like British Airways to adopt similar 'low-cost tricks' to compete on short-haul routes. This has led to an industry-wide degradation of the passenger experience, where once-standard amenities are now paid add-ons.

When a large competitor matched Southwest's $13 discounted fare, Southwest countered by offering customers a choice: the $13 fare, or the original $26 fare with a complimentary bottle of liquor. Most business travelers chose the higher fare, turning a potential loss into a profitable marketing coup.

To win as a low-cost service provider, every decision must be optimized for operational efficiency from day one, like offshoring talent and using heavy automation. Simply lowering prices because a premium model failed is a losing strategy, as the underlying cost structure is fundamentally different.

Despite attractive growth, new airlines struggle to enter the Mexican market due to the incumbents' scale. Volaris and Viva, controlling a large portion of domestic capacity, can strategically add flights and slash prices on any route a new entrant attempts to serve. This pricing power ensures any startup would be driven to bankruptcy within months.

Beyond low fares, Ryanair's long-term dominance stems from its financial strategy of investing when the industry is weak. The airline uses its large cash reserves to place massive, discounted aircraft orders with manufacturers like Boeing during slumps and opportunistically seizes market share when legacy carriers falter. This turns competitors' crises into major growth opportunities.

For the first time, Delta's premium cabin sales, from just 30% of its seats, have surpassed coach sales. This shift provides tangible evidence of a "K-shaped" economic recovery, where a growing wealthy consumer base spends more on luxury while the mass market cuts back, forcing brands to cater to the profitable high end.

Unlike the consolidated US, Europe's fragmented airline market and abundance of secondary airports are key to Ryanair's success. Ryanair leverages its high passenger volume to negotiate extremely low landing fees with smaller, competing airports, creating a sustainable cost advantage that larger legacy carriers tied to primary hubs cannot replicate.

Airlines are increasingly devaluing elite status by offering last-minute cash upgrades to non-status members via mobile check-in. This practice allows them to monetize empty premium seats, often leaving their most loyal, high-status flyers stuck at the top of the upgrade list in economy.