Ultra Low Cost Carriers Explained: Which Airlines Offer the Cheapest Fares?

Ultra Low Cost Carriers Explained: Which Airlines Offer the Cheapest Fares?

By Egor Karpovich — CEO & Founder, Travel Code · Reviewed: August 2026

TL;DR: Ultra low cost carriers (ULCCs) sell rock-bottom base fares and monetize nearly everything else — bags, seat selection, printed boarding passes — as ancillaries. Globally, the cheapest ULCCs by average base fare are Ryanair (Europe), Wizz Air (Europe/Middle East), Spirit and Frontier (US), Volaris and VivaAerobus (Mexico/Latin America), and AirAsia and IndiGo (Asia), per IATA 2025 yield data and US DOT Air Travel Consumer Reports.

What is an ultra low cost carrier?

An ultra low cost carrier (ULCC) is an airline whose entire commercial and operational model is engineered to sell the lowest possible unbundled base fare. Everything a legacy carrier bakes into the ticket — a checked bag, a carry-on above the free personal item, seat selection, in-flight water, printing a boarding pass at the airport — becomes a separately priced ancillary. The US Department of Transportation formally classifies Spirit, Frontier, Allegiant, and Avelo as ULCCs in its quarterly Air Travel Consumer Reports. In Europe, the model was pioneered by Ryanair in the early 1990s and later scaled by Wizz Air, easyJet (a hybrid low-cost carrier, or LCC), and Volotea.

Drawing from eight-plus years building AI-powered corporate travel platforms, the operational patterns that hold up across every ULCC I've analyzed are the same: single-aircraft-type fleets (typically the Airbus A320 family or Boeing 737 family), high seat-density cabins that cut per-seat costs by 20–30% versus legacy layouts, point-to-point routing that avoids hub complexity, secondary airport preference to dodge slot fees, direct-to-consumer distribution that bypasses GDSs, and rapid aircraft turns (25 minutes at the gate is common at Ryanair, per its 2024 investor deck).

ULCC vs. LCC vs. legacy carrier — the pricing model matters

The three tiers are frequently confused. A legacy carrier (Delta, United, Lufthansa, British Airways) bundles bags, seats, and service into the fare and operates a hub-and-spoke network. A low cost carrier or LCC (Southwest, JetBlue, easyJet) trims the frills but still bundles some benefits — Southwest famously still includes two checked bags. A ULCC unbundles aggressively: the base fare buys a seat and nothing else. According to IATA's 2025 Global Outlook for Air Transport, ULCCs accounted for roughly 35% of global short-haul capacity in 2024, up from 27% in 2019, with the fastest growth in Latin America and Southeast Asia.

Cheapest ULCCs by region — 2026 snapshot

Base fares are averages across the airline's most-flown routes; ancillary revenue often doubles the final ticket price. Bag policies apply to the entry-level fare bucket only.

How ULCCs actually make money — the ancillary revenue engine

The public-facing story is a $19 fare to Las Vegas. The real business is ancillary revenue. IATA's 2024 Airline Business Confidence Index and CarTrawler's Ancillary Revenue Yearbook 2024 report that ULCCs derive between 42% and 57% of total revenue from ancillaries — bags, seat selection, priority boarding, onboard sales, and third-party commissions on hotels, cars, and travel insurance. Spirit Airlines reported $70.60 in ancillary revenue per passenger in FY2024, per its 10-K filing. Ryanair's ancillary revenue per passenger reached €24 in FY2025, per its annual report — roughly equal to its average base fare.

This matters for business travelers because a "cheap" ULCC ticket routinely doubles or triples in true cost once a corporate policy requires a checked bag, seat selection near the front, and a flexible fare class. A Spirit fare that shows as $59 in a shopping engine can land at $180–$220 when bag, seat, and modest flexibility are added, according to US DOT tarmac-price transparency data published in Q1 2025.

The business traveler's ULCC dilemma

Corporate travel policies were largely written before ULCCs became structurally important. In 2005, ULCCs held under 8% of US domestic capacity, per BTS T-100 data; by 2024 that share exceeded 22%. On thousands of city pairs — Denver to Las Vegas, Orlando to Newark, Budapest to Rome, Mexico City to Cancún — a ULCC is now the cheapest, and sometimes the only, direct option. GBTA's 2025 BTI Outlook reports 61% of travel managers now permit ULCC bookings under defined-trip-type rules (typically same-day return, domestic only, no critical business meeting), up from 34% in 2019.

The trade-offs are real, however:

• Duty of care: Fewer daily frequencies means fewer rebooking options during a disruption. Many ULCCs will not endorse tickets onto another carrier during an irregular operation, per DOT Advisory Committee for Aviation Consumer Protection minutes.
• Change and cancellation policies: Historically punitive. The US DOT's 2024 refund rule improved cash refunds for cancelled or significantly changed flights, but voluntary changes still incur $99–$149 fees at most US ULCCs.
• Loyalty program value: Limited or absent. Corporate hotel and airline programs that reward point accrual do not extend meaningful benefits on ULCCs.
• Distribution gaps: Not every ULCC is fully connected to every GDS, which can leave TMCs unable to service the booking end-to-end.

When a ULCC makes sense for business travel

ULCCs work best for same-day or overnight trips where the traveler carries a laptop and no checked luggage, on routes where a ULCC operates a direct flight that a legacy carrier only offers with a connection. They also make sense for internal-team travel to offsites, where flexibility is lower-value and cost sensitivity is higher. They rarely make sense for client-facing travel where a disruption would cost more than the ticket saved, or for multi-leg international itineraries where fare rules and baggage complexity compound. For a full cost-modeling framework, see our guide to the average cost of a business trip by trip type and region.

Where Travel Code fits

Travel Code is a BYOD (Bring Your Own Data) overlay platform that runs alongside your existing TMC or online booking tool — it isn't a TMC itself. For ULCC-heavy portfolios, our RateGuard product continuously re-shops your booked itineraries and captures downstream fare drops without changing where employees book. Pricing is 25% of validated, realized savings — you only pay when we deliver measurable rebooking value. The overlay also unifies reporting across ULCC direct bookings, TMC bookings, and hotel bookings so travel managers see one dataset rather than three. See how the model works for duty of care without changing your OBT.

Frequently Asked Questions

Which airline has the cheapest ultra low cost fares?

Globally, Ryanair posts the lowest average base fare among major ULCCs — €24 in Q4 2024 per its earnings report. In the United States, Spirit Airlines had the lowest average base fare at approximately $54 in Q4 2024, per US DOT Air Travel Consumer Reports. Final ticket price after ancillaries is a separate calculation.

Are ULCCs safe for business travel?

Yes, from a flight-safety standpoint — ULCCs operate under the same FAA, EASA, and ICAO safety regulations as legacy carriers and generally fly newer fleets with an average aircraft age of six to eight years. The bigger corporate concern is operational resilience during disruptions: fewer daily frequencies, limited interline agreements, and stricter change policies, which is what most corporate travel policies gate against.

Can I book a ULCC through my TMC?

Increasingly, yes. Spirit, Frontier, Ryanair (via Amadeus since 2023), Wizz Air, and Volaris are now available in one or more major GDSs. Allegiant and Avelo remain primarily direct-only or with limited third-party distribution. TMCs like American Express Global Business Travel, BCD Travel, and CWT publish current ULCC connectivity lists on request. See our TMC comparison guide for details.

Do ULCCs offer corporate discount programs?

Most do not, in the traditional sense. There are no negotiated global corporate agreements at Spirit, Frontier, or Ryanair equivalent to what United, Delta, or Lufthansa offer. Some ULCCs offer group booking desks and small SME programs — Wizz Air's Corporate Direct and Volaris's V-Club Corporate are examples — but these deliver modest discounts, typically 3–8%, versus 10–20% typical of legacy carrier corporate deals.

Should our corporate travel policy allow ULCCs?

Sixty-one percent of travel programs surveyed by GBTA in 2025 permit ULCCs under conditional rules — typically for domestic same-day trips or team offsites where disruption risk is low. The policy question is not "should we allow them" but "under which trip types" and "how do we handle the ancillary and duty-of-care gaps." For a broader policy framework, see our corporate travel budget guide.

Is Travel Code a TMC?

No. Travel Code is a BYOD overlay platform that runs alongside your existing TMC or booking tool. We do not replace Amex GBT, BCD, CWT, Egencia, or Navan. We add continuous rate re-shopping (RateGuard, 25% of validated savings), real-time duty-of-care visibility, and unified reporting on top of whatever booking channels your travelers already use — including ULCC direct bookings that never touch a TMC.

What's the difference between a ULCC and a low cost carrier?

A low cost carrier (LCC) trims frills but still bundles some services — Southwest includes two checked bags; JetBlue includes seat selection at booking. A ULCC unbundles aggressively: the base fare buys a seat, and every other service is a separately priced ancillary. Ryanair, Spirit, Frontier, Wizz Air, Volaris, and AirAsia are the canonical ULCCs; Southwest and JetBlue are LCCs.

Sources cited

• US Department of Transportation, Air Travel Consumer Reports (Q1–Q4 2024)
• US Bureau of Transportation Statistics, T-100 domestic segment data (2005–2024)
• IATA Global Outlook for Air Transport 2025
• GBTA 2025 Business Travel Index Outlook
• CarTrawler Ancillary Revenue Yearbook 2024
• Spirit Airlines FY2024 10-K filing (SEC)
• Ryanair FY2025 annual report
• Wizz Air FY2025 investor materials
• Capital A Berhad (AirAsia) 2024 filings
• IndiGo Q3 FY25 investor presentation
• DOT Advisory Committee for Aviation Consumer Protection minutes (2024)

Egor Karpovich is CEO and Founder of Travel Code. He has spent eight-plus years building AI-powered corporate travel infrastructure and advises Fortune 500 travel programs on ULCC integration and BYOD architecture.