This Is the Worst Airline for Consumer Complaints

Although online ticket platforms might give the impression that all airlines are interchangeable, recent statistics from the U.S. Department of Transportation paint a starkly different picture. The agency's data reveals significant contrasts in customer satisfaction among major U.S. carriers, challenging the notion of uniformity in air travel experience. While the industry as a whole has grappled with increased rates of flight cancellations, delays, and lost baggage in the 2020s, one airline consistently finds itself at the bottom of the pack across several performance metrics.

At the top of this unenviable list is Frontier Airlines (ULCC), a budget carrier that persistently ranks at or near the back of the pack for on-time arrivals, flight cancellations, and even misplaced passenger wheelchairs and scooters. In 2023, Frontier received almost three times the number of complaints per passenger than the industry average.

However, Frontier's status as the most complained-about airline in the U.S. isn't just a story of one carrier's struggles. It's a window into the broader story of a sector grappling with consolidation's effects and the challenges smaller players face in a market dominated by a few giants. Follow below as we take you through this story that shines a broader light on the industry changes behind Frontier's numbers, as well as those of other U.S. airlines.

Is the US Airline Industry an Oligopoly?

While the image of the airlines as cramming more and more passengers into less and less space to squeeze the least bit of extra profits (and any pleasurable experience) is likely as old as the industry, there's data to back up consumer views of the industry today. The incredibly shrinking passenger experience isn't a mirage: seat pitch (the distance between a row of seats) in 1985 was often up to 36 inches, while seat width was up to about 23 inches. Now, many airplane models have a pitch of 28 inches and a width under 17 inches.

In addition, during the last 15 years or so, the airlines have taken amenities that used to be free and slapped charges on them, giving you several pages to wade through after purchasing your tickets or checking in for your seat. While they continue to fly in greater numbers, Americans have nevertheless been letting the industry and regulators know they're fed up. In 2023, customers lodged over 61,000 complaints against U.S. airlines, according to the Department of Transportation. That’s over 20% more than the record set the year before.

The increase in complaints for Frontier and other airlines is occurring against the backdrop of an airline industry that has undergone massive consolidation over the past two decades. In an early 2024 federal district court ruling blocking the merger of Spirit Airlines Inc. (SAVE) and JetBlue Airways Corporation (JBLU), the judge in the case stated what researchers and industry experts have long said: "The airline industry is an oligopoly that has become more concentrated due to a series of mergers in the first decades of the 21st century, with a small group of firms in control of the vast majority of the market,” wrote Massachusetts District Court Judge William Young. The U.S. Department of Justice (DOJ) had sued to block the merger, which would have created the fifth-largest U.S. carrier with a combined domestic market share of 10%.

Four major carriers—American Airlines, Inc. (AAL), Delta Air Lines, Inc. (DAL), Southwest Airlines (LUV), and United Airlines Holdings, Inc. (UAL)—control over two-thirds of the domestic U.S. market. This concentration leaves smaller airlines like Frontier in a precarious situation, often forced to compete on price alone and usually at the expense of customer service and key measures of airline competence.

An oligopolistic market dominated by a small group of companies, the airline industry is well-known for its significant barriers to entry. These include enormous startup costs, such as acquiring aircraft and establishing routes; infrastructure constraints, like limited takeoff and landing slots at major airports; and the substantial economies of scale enjoyed by established carriers. These make it exceptionally challenging for new entrants to gain a foothold in the market and compete effectively with the industry giants—and no major new entrant has appeared in some years.

Delta Air Lines leads the pack with a 17.8% market share, closely followed by American Airlines and Southwest Airlines, each holding approximately 17.4% of the market. United Airlines rounds out the so-called "Big Four" with a 16.0% share. Together, these carriers account for 69% of the domestic U.S. market. In addition, there's a significant gap between the Big Four and the rest of the field, with the next largest carrier, Alaska Air Group Inc. (ALK), holding just 6.1% of the market, less than half the share of the smallest of the top four.

After a historically awful couple of years amid the pandemic and lockdowns, the combined profits of U.S. airlines were $7.8 billion in 2023. Air travel had declined markedly in 2020 amid travel restrictions prompted by the COVID-19 pandemic. U.S. carriers lost a combined total of $35 billion on an after-tax basis that year.

How We Got Here

Let's quickly review the history of deregulation and changes in air travel that have brought us to the present moment.

Deregulation Takes Flight (1978-1990s)

Between 1940 and 1978, the Civil Aeronautics Board (CAB) regulated domestic air travel in the U.S. as a public utility. The CAB's approval was required for changes to schedules, fares, and routes. The agency was notoriously reluctant to approve airlines' requests for new routes, raising the barriers to market entry for potential competitors.

The Airline Deregulation Act became law in 1978. Its effect was to increase competition, with fare prices decreasing in the 20 years following its introduction. Meanwhile, the number of passengers increased from 207.5 million in 1974 to over one billion by 2023. There were significant changes in the aftermath of deregulation:

• A surge of new entrants into the market, including low-cost carriers.
• Increased competition led to lower fares and a boom in air travel.
• Established carriers struggled to adapt, with some, like Pan Am and Eastern, going bankrupt.
• The hub-and-spoke system became prominent as airlines sought efficiency.

Turbulence and Consolidation (1990s-2010s)

The industry soon faced significant challenges that led to a wave of consolidation:

• Economic recessions, fuel price volatility, and the impact of the 9/11 attacks strained airlines financially.
• Low-cost carriers like Southwest gained market share, pressuring legacy carriers.
• A series of mergers reshaped the industry: Delta Air Lines merged with Northwest Airlines (2008), United Airlines merged with Continental Airlines (2010), American Airlines merged with US Airways (2013), and Alaska Airlines acquired Virgin America (2016).

By the mid-2010s, the U.S. airline industry had consolidated into its present structure:

1. American Airlines: Emerged as the world's largest airline after merging with US Airways.
2. Delta Air Lines: Strengthened its position through the merger with Northwest.
3. United Airlines: Expanded its network significantly by joining forces with Continental.
4. Southwest Airlines: Grew organically and through the acquisition of AirTran Airways.

These four carriers now control over two-thirds of the domestic market, creating an oligopolistic structure.

The consolidation has had far-reaching effects:

• Reduced competition on many routes, potentially leading to higher fares on certain corridors.
• Increased barriers to entry for new airlines because of the scale and resources of the major carriers.
• Creation of a challenging environment for smaller carriers like Frontier, forced to compete primarily on price.

The Impact on Competition

Today's airline industry bears little resemblance to the regulated market of the 1970s:

• The "Big Four" dominate the major hubs and the most lucrative routes.
• Ultra-low-cost carriers like Frontier and Spirit operate on the fringes, offering bare-bones service at rock-bottom prices.
• Regional airlines often operate as contractors for the major carriers, serving smaller markets.

This evolution from a regulated industry to a largely consolidated and less regulated market has created the competitive developments we see today, shaping everything from route structures to customer service approaches and ultimately influencing the customer experience, including the high complaint rates we observe for carriers like Frontier.

How Industry Consolidation Helps Shape Frontier's Struggles

Frontier Airlines' position at the top of the customer complaint charts is not merely a result of individual missteps or isolated incidents. Rather, it's a symptom of broader industry developments, particularly the ongoing consolidation that has reshaped the U.S. airline landscape over the past two decades. The U.S. airline industry has evolved into what economists call an oligopoly, with four major carriers controlling over two-thirds of the domestic market. This concentration of power has created a challenging environment for smaller players like Frontier, who are in a race to the bottom to lower their fares and compete for customers. Like other smaller carriers, Frontier has struggled with profitability:

Here's what Frontier and other smaller players in the airline industry face:

1. Route selection pressures: In a consolidated market, major carriers often dominate the most lucrative routes and airport slots. This forces budget airlines like Frontier to focus on secondary markets or less convenient time slots, potentially leading to more connections, delays, and customer frustration.
2. Resources: The "Big Four" airlines benefit from economies of scale, allowing them to invest more in customer service infrastructure, newer aircraft, and employee training. Frontier, operating on thinner margins, may struggle to match these investments, resulting in more service-related complaints.
3. Pricing Dynamics: To compete with the major carriers, Frontier frequently resorts to ultralow base fares, making up revenue through fees for services that other airlines might include in the ticket price. This "unbundling" strategy can lead to customer dissatisfaction when travelers face unexpected costs.

The Cost-Cutting Feedback Loop

Frontier's business model as an ultra-low-cost carrier (ULCC, not coincidentally, its ticker on Wall St.) is a response to industry consolidation:

1. Operational efficiency vs. customer satisfaction: To keep fares low, Frontier must maximize efficiency, often at the expense of customer comfort. This means tighter seating, few amenities, and less flexibility in handling disruptions—all sources of customer complaints.
2. Staff effects: Budget constraints may lead to understaffing or underfunded training programs, potentially resulting in service issues and increased complaints.
3. Technology investments: While major carriers can invest heavily in customer-facing technology to smooth the travel experience, Frontier may lag in these areas, leading to frustrations with booking, check-in, or handling of disruptions.

High complaint rates can create a vicious cycle for airlines like Frontier:

1. Reputation impact: As negative reviews and high complaint rates become public, Frontier may struggle to attract higher-paying customers, further entrenching its position as a bare-bones, budget option.
2. Regulatory scrutiny: High complaint rates invite increased attention from regulators, potentially leading to fines or operational restrictions that further strain the airline's resources.
3. Employee morale: Constant customer dissatisfaction can affect employee morale, potentially leading to higher turnover and further service issues.

The Bottom Line

A handful of U.S. airlines handle the bulk of domestic passenger travel. While no single carrier has a dominant market share, Frontier Airlines consistently ranks low in metrics like customer complaints to the U.S. Department of Transportation and on-time arrival. However, other airlines like Spirit and American Airlines are seldom far behind.

Some airlines operate a large share of the flights from certain airports, and competition on some routes may also be limited. Despite high barriers to entry and persistent complaints of collusion by critics, airfares broadly declined after the airline industry was deregulated in 1978 and again after 2013, following a wave of airline mergers. Since the pandemic, airfares have been on the rise again.