The budget airline model is struggling under a perfect storm of soaring fuel costs, fierce competition from mainline carriers (like Delta and United), and a post-pandemic shift where travelers increasingly favor premium cabins over ultra-low fares, reports CNBC.

Several budget airlines recently asked the federal government for a lifeline, and low-cost carrier Spirit Airlines went out of business on May 2, liquidated following the failure of a proposed $500 million federal bailout from the Trump administration and a crippling spike in jet fuel costs.

Industry analysts warn that the decline of budget airlines could ultimately mean higher ticket prices for consumers. Ultra-low-cost carriers have long pressured larger airlines to match or lower fares on competitive routes, and their retreat could reduce pricing competition in some markets, particularly for price-sensitive travelers.

Kyle Potter, editor of Thrifty Traveler, a travel website and flight deal aggregator, told CNBC that Americans “for decades … have been voting with their wallets, showing that what they care about above all else is a cheaper fare.

"I think Spirit's demise last month signals the start of a new era — maybe, a return to the so-called 'Golden Age' of travel ... and one that many everyday flyers may not like.”

Major legacy airlines also borrowed tactics from budget carriers to win back customers — then gained an edge by beefing up their loyalty programs.

One economist told NPR recently that those programs have evolved into a powerful tool that can give large airlines a competitive advantage over smaller rivals.

"And what that means is that they've had to partner up" with other airlines and try to make their loyalty programs more valuable and worth using, Severin Borenstein, an economist at the UC Berkeley Haas School of Business, told the news outlet.

"And partnering up is expensive for a small carrier. And in some cases, such as Spirit, they have a hard time because other airlines don't want associations with them."