How do ultra low-cost carriers like Frontier typically generate additional revenue?

Ultra low-cost carriers (ULCCs) like Frontier typically generate additional revenue through ancillary fees, which include charging for seat selection and baggage. This model allows them to keep base ticket prices low while still maximizing revenue from travelers who choose to pay for extra services.

Seat selection fees give passengers the option to choose their preferred seating arrangement, often for an additional cost, which can significantly enhance the overall earnings beyond the initial ticket price. Similarly, charging for checked and sometimes even carry-on luggage further supplements their income, as many passengers are willing to pay these fees for convenience.

This revenue generation strategy is fundamental to the business model of ULCCs, as it enables them to attract price-sensitive customers by advertising lower fares while simultaneously capitalizing on the willingness of some passengers to pay for added comfort and convenience. The other options, such as offering unlimited free beverages, including all passengers in a loyalty program, and providing free upgrades to premium classes, do not align with the typical practices of ultra low-cost carriers, which focus on minimizing costs and maximizing revenue from optional services.