Taking off years ahead of their Japanese peers, U.S. budget airlines appear to have outgrown their strategy of undercutting competitors on fares and shifted attention to boosting profit margins by offering such options as luxurious seats and expanding overseas.
While it remains to be seen whether these U.S. examples portend what will happen in Japan, Japan's low-cost carriers still rely on fare competition as their main tool for drawing passengers from rivals and traditional carriers in the still-growing market.
U.S. airlines can afford to raise ticket prices now that the market is getting a lift from the steadily recovering economy. This buoyant state of business is allowing budget carriers to provide increased value-added services and shore up fares, albeit at levels lower than what full-service airlines offer.