Cheap airlines make more money from fees than tickets
Budget carriers function more like digital retail shops than transportation companies, often collecting half their total revenue from carry-on bags and seat selections.
When you board a budget flight, the seat itself is actually a loss leader designed to get you through the door. This business model, pioneered by Spirit Airlines in 1983 and perfected by Europe's Ryanair, relies on unbundling every possible service to keep the base fare artificially low. By charging separately for everything from a bottle of water to a printed boarding pass, these carriers generate up to 50 percent of their revenue from ancillary fees. This strategy allows them to undercut traditional airlines by nearly 60 percent, effectively acting as a price anchor that drags down fares across the entire industry.
There's more to this story — open the app to keep reading.