Operating an airline is both capital- and labor-intensive. The
airplanes, maintenance, fuel, regulatory fees, pilots, crew, agents,
baggage handlers and other key components of airline operations aren't
With such high expenses, airlines typically earn profit margins
of just 1 to 2%. Keeping costs down is essential to maintaining those
profits and staying afloat in a bankruptcy-ridden industry.
Learn how discount airlines are able to make a profit while charging
airfares consumers can afford in my Financial Edge article for
Investopedia, The Economics of Discount Airlines.