SERVICE COMPANY INSIGHT Low Fares but Decent Profits During 2008, when other airlines were cutting flight service due to the recession, Allegiant Airlines increased capacity by 21%. Sounds crazy, doesn't it? But it must know something, be- cause while the other airlines were losing money, it was generating profits. Consider also that its average one-way fare is only $83. So how does it make money? As a low-budget airline, it focuses on controlling costs. It purchases used planes for $4 million each rather than new planes for $40 million. It flies out of small towns, so wages are low and competition is nonex- istent. It only flies a route if its 150-passenger planes are nearly full (it averages about 90% of capacity). If a route isn't filling up, it quits flying it as often or cancels it altogether. It adjusts its prices weekly. The bottom line is that it knows its costs to the penny. Knowing what your costs are might not be glamorous, but it sure beats losing money. Source: Susan Carey, "For Allegiant, Getaways Mean Profits," Wall Street Journal Online (February 18, 2009). What are some of the line items that would appear in the cost of services provided schedule of an airline? (See page xx.)