How airlines make cheap flights tickets possible?

What makes it possible for the airlines to offer the cheap flights? Assuming that the oft quoted reasons for cheap flight tickets is the off-season discount being provided by the airlines is true, still how is it possible for the airlines to bring down the prices of tickets? As it may sound even more interesting, the airlines which are not able to record profits also offer the cheap flights? The question is not of why but of how? It is quite clear that if low cost flight tickets are not offered when the same are also being offered by the competitors, it could spell the death knell of the airlines whereas reducing the prices would still not keep the airline in contention for long.

Airlines hope, and this might be the most elusive hope for many airlines to come true, that in the long run they would be able to meet cut down their losses and turn these into profits when the situation turns favorable. Their practice of resorting to yield management and charging passengers more when the demand is high is one of the main ways to cross-subsidize air travel during different seasons. Similarly, this cross-subsidization is also done in different classes of seats. The economy class seating is cheaper than the other categories of seats. So, the airlines might be willing to take losses for one quarter and hope to make profits in the others using these cross-subsidization methods.

At times the airlines reward the agencies for the business which they have given them. They might provide certain special, discounted tickets to the agencies to be sold to the exclusive clients. The agency might decided to reduce the prices of flight tickets further and still make profit by selling these discounted tickets. This is another way in which the agencies or the airlines would be able to offer cheap flights.

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